Recorded on May 11, 2017
John Michael “Mick” Mulvaney, director of the Office of Budget and Management, sits down with Peter Robinson to discuss the complex process of budget reform by having to blend President Trump's budget proposal with the realities of dealing with Congress. Mulvaney explains the need for bipartisanship in budget negotiations within the Senate to get the budget passed, which means getting at least eight Democrats to vote for the proposed budget (to get to the magic number of sixty votes) and keeping Trump's promises to his base.
Mulvaney talks about the unique opportunity for the Republicans to reform the federal budget five months ahead of schedule as a result of the Obama administration’s inability to get a twelve-month budget passed. Furthermore Republicans have been able to invoke old laws that allow them to undo many policies enacted in the late days of the previous administration. That loophole allowed them to confirm several appointments and to pass the proposed budget without the requisite sixty votes but with fifty votes. But the Republicans need sixty votes in the Senate to pass the appropriations bill. The Democrats wanted a shutdown, but the Republicans were able to move money around to satisfy the Democrats and get the votes necessary to pass the appropriations bill and avoid a shutdown. For example, there was/is no money for new bricks and mortar construction of the “Wall,” but Republicans moved money around and funded their priorities for border security via a virtual wall with money already available for technology and surveillance.
Mulvaney notes that the budgeting/appropriations system is set up so the House and Senate pass twelve appropriations bills every year. Those are the spending bills, which are the end process of the budget. The budget is the start of the process, authorizations go in the middle, and appropriations go on the end, which is how money gets out to be spent. Mulvaney was in Congress for six years, in which time Congress should have approved seventy-two appropriations bills but only approved three. Mulvaney says that the system is broken because of the sixty-vote rule to approve appropriations bills in the Senate. Therefore instead of small manageable appropriation bills that Congress could negotiate and pass, Congress ends up with large unwieldy bills that no one knows what is in them and thus punts with a resolution to continue with what done earlier.
Mulvaney says that the system is not even close to what the Founding Fathers created and/or what is needed for a manageable and functioning government and society.
Mulvaney describes his vision for the future of the American economy, noting that the way to reduce the deficit isn't necessarily cutting spending or raising taxes but creating room in the American economy for growth. He argues that the lack of new businesses and jobs, because of regulations and taxes, has prevented the ideal three percent growth necessary to eliminate the deficit and grow the economy. He also argues that regulatory reform can have twice the impact on economic growth that tax policy can.
Mulvaney ends the interview saying that he loves his job and loves going to work. The eighty-plus-hour workweeks go by in the blink of an eye because the work is engaging and invigorating and because he feels he has a golden opportunity to change things for the better and get the United States, especially the economy, on a better trajectory. Mulvaney said that he is working at the highest levels on complicated but wonderful ideas, ideals, and issues with the leader of the free world and that President Trump is a great boss.
Full Transcript Below
Peter Robinson: The federal budget of the United States, more than $4 trillion. The annual deficit, between 450 and 500 billion. The total federal debt, some $14 trillion. There is one man in the United States whose job it is more than it is that of any other to understand these staggering sums and to carry out President Trump's promise to reform the budget. That would be Mick Mulvaney. With us today, the Director of the Office of Management and the Budget. Uncommon Knowledge now. Welcome to Uncommon Knowledge. I'm Peter Robinson. John Michel Mulvaney was born in Virginia, grew up in North Carolina, and has lived most of his adult life in South Carolina. He holds an undergraduate degree from Georgetown University and a law degree from the University of North Carolina at Chapel Hill. From 2011 until earlier this year, Mr. Mulvaney represented the 5th District of South Carolina in the House of Representatives where, according to The New York Times, he earned a reputation for taking "a hardline on spending." Last December, then-President-elect Donald Trump nominated Mr. Mulvaney as Director of the Office of Management and the Budget, and the Senate confirmed him in February. Mick Mulvaney, welcome.
Mick Mulvaney: Peter, thank you so much for having me.
Peter Robinson: All right.
Mick Mulvaney: That introduction scares me to death. I'm the one who's supposed to understand all that?
Peter Robinson: Yes, you are. Yes, you are. You're the one who's supposed to make me understand all that. I want to find out about you, but first, I want to find out about the budget. May 1st, the House releases a bill to fund discretionary spending for the next seven months of the fiscal year, a bill that you negotiated with Congress including Democrats. Now let me give you a few of the responses. The Atlantic Magazine, "Congress is giving the new president a boost in funding for the military and a little extra for border security, but that's about it." Rush Limbaugh, "If I'm the Democrats, a modest increase in spending is a small price to pay for continuing to fund Planned Parenthood, continuing to fund the EPA, and not building the wall. The Democrats think this is a big win." Ann Coulter, final one, "If this is the budget deal we get when Republicans control the House, the Senate, and the presidency, there's no point in ever voting for a Republican again." Mick Mulvaney-
Mick Mulvaney: I love Ann. She's always so subtle.
Peter Robinson: Walk me through-
Mick Mulvaney: Sure.
Peter Robinson: First, simply the technical question. I draw up my budget on January 2nd for the rest of the year. Why do we have a seven-month bill? What's going on here?
Mick Mulvaney: It's actually less than that. It's five.
Peter Robinson: Oh, it is? I'm sorry.
Mick Mulvaney: Because here's what's happened. Here's what happened, is that ordinarily we do our budget, now keep in mind, the federal government budget is actually a three-step process, so what everybody else calls a budget is something different. Let's sort of mix our metaphors and pretend it's a household. We would do that in September of every year, and it would fund us from October 1st of a year to September 30th of the following year. That is our 12-month fiscal year. Last year in September when President Obama was still here, he was not able to get a 12-month budget, a 12-month funding bill approved because there was a couple of short terms that took us to the end of the April.
Peter Robinson: Right.
Mick Mulvaney: So the first seven months were funded under the Obama administration, the last five months, we got a chance at. I've heard the list of criticisms, and I could down them one-by-one is you wanted to-
Peter Robinson: I do want to give you a chance to do that, yes.
Mick Mulvaney: But the point of the matter is everything we got here was sort of found money for us and sort of a found opportunity. We should not have even been at the table. If President Obama had been able to pass a 12-month budget in September of 2016, we would be living under those spending rules right now. As things in, we got a little bit for the last five months, which is a big win for us because we shouldn't have had any of it. Now, to the folks, and I've talked to Rush-
Peter Robinson: Right. Right. Rush Limbaugh and Ann ... You're getting beat up by your own people.
Mick Mulvaney: Yeah, but I think the tone of that actually changed after my press conference, which sort of pushed back and laid out the case, a couple different things. So far into this Congress, so much of what we've done has been unusual in that it's only required 50 votes in the Senate to get anything done. All of those Congressional Review Act pieces of legislation, the things that undo the previous administration's regulatory regime, that only takes 50 votes in the Senate.
Peter Robinson: Can you pause on that for just a moment-
Mick Mulvaney: Sure.
Peter Robinson: Because the Congressional Review Act stuff as I read it, it's very important.
Mick Mulvaney: You could do a whole show on just that.
Peter Robinson: Legislation that was on the books but that seldom got used, and now under President Trump, up on the hill they're using it. Can you just explain that for a moment?
Mick Mulvaney: Yeah. Three-sentence explanation. There's a law that says that in the early days of a new administration, they have special abilities to go and undo regulations from the late days of a previous administration. They get privileged treatment in the Senate, so it doesn't take 60 votes like so many things do in the Senate. And, if you can pass that piece of legislation, the administration that originally promulgated that rule is permanently barred from doing the same thing ever again. So not only-
Peter Robinson: It's the agency that-
Mick Mulvaney: The agency. So not only did the 13 or 14 of these that we've passed undo the 13 or 14 of President Obama's rules, we have permanently denied those agencies from making the same type of ruling in any future Democratic administration. Again, a fascinating thing I think was done one time before we got here where we either threw 13 or 14 depending on what passed last night as I was flying out here. So we got that done.
Peter Robinson: So that's taken place.
Mick Mulvaney: Fifty votes for that. Neil Gorsuch, 50 votes for that because they broke the filibuster. My confirmation, 50 votes. All those things used to be 60, now they're 50. Fast forward to where we were on the funding bill, the appropriations bill that we're talking about. That was the first thing where we really needed 60 votes in the Senate. People ask me all the time if the Republicans controlled, and this is to Ann Coulter's point, Republicans control the House and the Senate and the White House, why are they giving the Democrats anything? Because we have to. You have to get at least eight Democrats in the Senate to vote to keep the government running, and in exchange for that, you have to give them something. Now, this is why I was so, not defensive is the right term, but I was surprised at the spin that somehow we got smoked on this because here's what the Democrats got-
Peter Robinson: You were ticked off.
Mick Mulvaney: I was.
Peter Robinson: I saw the news conference. You were ticked off.
Mick Mulvaney: Because I negotiated this thing. Listen, sometimes I lose, and when I lose, I'll be the first one to tell you I lost. I didn't lose on this one.
Peter Robinson: Okay.
Mick Mulvaney: The Democrats wanted a bunch of stuff. The big thing they wanted was the guarantee for these bailout payments for Obamacare, what they call the cost risk sharing, CSR payments, cost-sharing risk payments that Obamacare system has to have to stay alive, and we didn't give them any of that. They wanted a bunch of new bailout money for Puerto Rico. We didn't give them any money for that. They walk around and say how they got $295 million. We found money that was already in Puerto Rico and simply reprogrammed it. I could go down the list again and again and again. The big thing the Democrats wanted, though, Peter, and they didn't get was they wanted to shut down. They wanted to prove to us in light of our inability at that time to have passed a healthcare bill and their sort of narrative that the President can't govern and she doesn't know what he's doing, they were desperate for a shutdown, and we didn't give it to them. We proved to people in both parties, in fact, folks who don't care about politics that President Trump can be the president, can govern, and at the same time, can get his priorities funded, and that's when we come back to what you mentioned about more money for defense, more money for the wall, more money for school choice, same things I'm been talking about since I got the job. So, no, I was very pleased with it. So was he. We hope that every negotiation goes so well.
Peter Robinson: A couple specific matters here.
Mick Mulvaney: Yeah.
Peter Robinson: Again, I guess what I'm asking-
Mick Mulvaney: I covered a whole bunch of them, I know, I'm sorry.
Peter Robinson: No, no, no. What I'm asking you to do, I guess, is to talk back to your fellow conservatives here. So you just mentioned more money for the wall, but it's actually more money ... The big gripe was that there isn't money for construction. It's money for border control. Is the people simply misunderstanding that?
Mick Mulvaney: No, that's ... Yeah. We're splitting hairs here.
Peter Robinson: Okay.
Mick Mulvaney: Technically, there's no money for new bricks and mortar construction.
Peter Robinson: Got it.
Mick Mulvaney: But along the border right now, we have hundreds of miles of places where the fence is this tall. We have pictures of people climbing over the fence. We have pictures of people actually putting up ramps and driving over the fence. We have places where they used to be fenced, but it's fallen into disarray, and people can just walk right through it. We get $347 million to fix that. We get another couple hundred million dollars in order to update our technology. In many places, having a camera, having sensors actually covers more of the border more effectively than just the physical structure was. So what we got was what the President promised, which was border security, and we were really excited about that. If the Democrats want to take credit for no bricks and mortar, that's fine. We'll take credit for securing the border because it's what we wanted to do.
Peter Robinson: Okay. Then one other specific item. One of the most impressive facts during the campaign was that Donald Trump, who had been on other sides of this issue at various points, was from the beginning of that campaign until he took the oath of office, and to this day in every one of his public remarks, pro-life.
Mick Mulvaney: Mm-hmm (affirmative).
Peter Robinson: This bill gives full funding to the Planned Parenthood.
Mick Mulvaney: Fair enough. We had already done a couple things. We had, believe me, this exact conversation. This bill will fund Planned Parenthood. Why are we comfortable with that? Are we comfortable with that? When we sat down, it was look, first of all, the bill had all of the pro-life riders in it on limiting federal money for abortion.
Peter Robinson: So the Hyde Amendment lives.
Mick Mulvaney: The Hyde Amendment complete protected. By the way, so is all the Second Amendment, but that's not your question. We had just done one of the CRAs that we talked about on Title X funding, on allowing states to withhold Medicaid funding from Planned Parenthood if they believe that Planned Parenthood was somehow using the money to support their abortion services. It was a huge win for the pro-life movement, and, and this is the big one, sitting on the table on the same day was the health care bill. The health care bill fully and completely defunds Planned Parenthood. So, our point to Republicans on the Hill, our point to our base was, look, first of all, you can't doubt our commitment to the pro-life movement, number one. And number two, if you want to see your lawmakers vote for it, tell them to vote for the health care bill, which they did the very next day. So you look at it as a package deal, and not only did we fund our priorities, as I mentioned before, but we passed a piece of legislation out of the House at least that completely defunds Planned Parenthood. So, again, another promise kept by the President. Little bit messy, but that's the way the sausage gets made in legislation.
Peter Robinson: That's the way it works. Okay. You've explained there's certain kinds of legislation, and appropriations legislation is one of them, where you have to get 60 votes in the Senate for the following reason. The opposition has the right to filibuster. Republicans only have ... You need 60 votes to shut down a filibuster.
Mick Mulvaney: Yeah.
Peter Robinson: Republicans only have 52 members of the Senate. Therefore, you must get eight Democrats, and the need to get eight Democrats gives the other side a lot of leverage. Okay. As you are well aware, there is one other option. The other option is to push through the legislation, and when the Democrats refuse to vote for it in the Senate, appropriations, when they've refused to vote for it in the Senate, let the money under the current appropriation run out and shut down the federal government. That is an option, and here's what you said in a press conference just a few days ago. Quote-
Mick Mulvaney: I liked this line. I thought this was a good one.
Peter Robinson: You know where I'm going. "I've been through a couple of shutdowns. If we get to September, and it's business as usual, and it takes a shutdown to change it, I have no problem with that."
Mick Mulvaney: Yeah.
Peter Robinson: Explain that.
Mick Mulvaney: Yeah, and I think it was the President that same day tweeted how frustrated he was with the process and that maybe it took a good shutdown in September to change things. That was the context of my comment. Here's what we talk about when we say frustration and the city is broken. I could give you a long list of things that is wrong with Washington, D.C., but for the folks who sort of live it and breathe it like you, you get down in the weeds, and you understand the process, here's one of the root causes of the difficulties. The system is set up so that the House and the Senate are supposed to pass 12 appropriations bills every single year. Those are the spending bills. That's the end process of the budget. The budget is the start of the pipeline, authorizations go in the middle, appropriations go on the end, and that's how the money gets out to be spent. They're supposed to do 12 of those every single year. I was in Congress for six years. I can do the math on that that we should have done 72. We did three. That system has completely broken down in large part because of that 60 vote filibuster rule in the Senate. So what you do is instead of governing the way that the Founding Fathers wanted you to with taking a relatively small bill, you and I can negotiate it, we'll look at it, we can read it, we know what's in it, we end up with these monstrosities, 1,600 page bills. Or worse, you end up with a continuing resolution, which say we don't have any idea how we're going to spend money this year, so let's just spend it the same way that we did last year. The power of the purse is broken. This Constitutional system doesn't function, and it's a really, really lousy way to run the government. Shutdowns. There were 17 government shutdowns between 1976 and 1994. It used to happen all the time. They just didn't happen with the whole government. By the way, they happened five times in the four years that Jimmy Carter was president, and the Democrats controlled all the pieces of government at that time. It wasn't that big a deal because in those shutdowns, only one or two or three of those twelve funding bills didn't get passed. The rest of the government was operating because the process worked. That is broken down, and that's now why we have this constant brinksmanship. It's always all or nothing. It's always "Vote for this or the government's going to shut down" or "You're going to get blamed for this or that." That's not the way the system is supposed to work. It's a tremendously inefficient. It's tremendously frustrating to a businessman like Donald Trump who comes in and says "Why can't we just budget?" And if it doesn't change ... Well, let's do it this way. It will change, and either Congress will change itself or the President will help them.
Peter Robinson: Okay. Mick, one sort of historical fact, and then a quotation, and last question on shutdown here.
Mick Mulvaney: Yeah.
Peter Robinson: The history, which you know very well of course, is that what we think of today as the classic shutdowns took place when Newt Gingrich was speaker and Bill Clinton was president.
Mick Mulvaney: Correct.
Peter Robinson: It was the calculation of Speaker Gingrich that, by refusing to pass a budget that he thought was outrageous, he put heat on the President. There were a couple of shutdowns. This takes place in '94 and then takes place in '94 to '95. A couple big shutdowns. The Republicans were the people who got blamed by ordinary American citizens. The polls showed it was the Republicans' fault. Now, here's a quotation. Again, I'm quoting from this article on your appropriations bill from The Atlantic Magazine. "Republicans on Capitol Hill were in no mood to chance a government shutdown," that's this time around, "by fighting for the President's priorities." So, you've got this ... Your former colleagues in the House thinking, "The last time Newt tried this, we were the ones who got blamed." Why do you think they'd be likely to be in a different mood in September?
Mick Mulvaney: A couple different reasons, if they are, some of them might not be just because it's asking them to do something different. As awful as that appropriation CR process is, that brokered appropriation process is, at least they continue-
Peter Robinson: They're used to it.
Mick Mulvaney: Yeah, they're used to it. It's become sort of the new de facto way they run the Senate. But at some point, you have to ask yourself "Why did you go to the Senate? Why did you run for Senate? Did you want to change outcomes? Did you want to impact the way that we spend that $4 trillion budget that you set at the outside of the show?" Tim Scott's a dear friend of mine. I got a lot of friends in the Senate, and I think at some point, they might wake up one morning and go, "You know what? It might actually be nice to be a Senator, and to perform the function of a Senator and do more than just confirm judges and fight over filibusters, and maybe impact the power of the purse of the largest economy in the world, the largest government in the world." You got to hope that maybe they look around and say, "Things have to change as well." I hope that we get on the same page. I think there's a chance that we'd probably do that. There's no reason to get into an adversarial position when it comes to a shutdown, and hopefully everybody will come around to the plans of the idea that things that do need to change.
Peter Robinson: Okay. I'm a Democrat. I'm listening very carefully, and it sounds to me as though you and Donald Trump, his tweets and your comments right now are a threat, probably an empty threat.
Mick Mulvaney: Oh, I don't know. I've been through a shutdown or two before.
Peter Robinson: All right.
Mick Mulvaney: Keep in mind this ...
Peter Robinson: I'm just trying to think ... This is gamesmanship here.
Mick Mulvaney: No. No. I went through a shutdown. You haven't mentioned the shutdown of, it was 2011 or '13, I lose track of the odd number years. There was a shutdown, I believe it was in '13. We called it the Obamacare shutdown. It wasn't, but that's what people called the shutdown for about 13, 14 days, I think. That was where the Obama administration closed down the World War II Memorial so that the World War II vets couldn't go to a memorial that's open, by the way. You could just walk up to it. It's like closing the Washington Monument. Somehow they're going to put a shroud over it so you can't see it. They closed an outdoor monument, and they put signs up, “Due to the government shutdown, you can't come see this today.” There are ways to manage a shutdown to make them look bad, and there's also ways to manage a shutdown to point out to people that 87, no, 83, 83% of the money that the federal government spends still flows during a government shutdown.
Peter Robinson: Okay. Now you have my attention, if I'm a Democrat.
Mick Mulvaney: That's not a threat. That's just a fact that the shutdown looks different during a Republican administration than it would during a Democrat.
Peter Robinson: Okay. Mick Mulvaney, Congressman from South Carolina, as best I can tell looking over your record, you're a thorough conservative. This is not-
Mick Mulvaney: I've been called worse.
Peter Robinson: Yes, okay. From a conservative district, personally conservative, a conservative by conviction. What are you doing working for Donald Trump?
Mick Mulvaney: You forgot a little streak of libertarianism. I got that, too. I was with Rand Paul in 2016. I have no idea how I got here. I have some indication. I knew Mike Pence when Mike was in the House. Excuse me. I knew the Vice President. Not supposed to do that. When you're in the House, we don't call each other by names. It's sort of hard to get out of that habit. I knew the Vice President when he was in the House, and we liked each other, and I think he liked some of the work I had done that he followed after he left to go to Indiana. Somehow, I got an interview for this job, which is the job that I've wanted since I got to Congress. I remember I worked with Rick Perry in 2012, and he said, "What do you want if I win." I said, "I want to be director." I said the same thing to Rand Paul in 2016. Here I was in New York interviewing with Donald Trump for the position that I wanted. Absolutely fascinating. It was about a 15-minute interview. We talked about the entire panoply of things that the OMB dealt with. His grasp, by the way, of OMB surprised me in a really good way. Most people don't know what OMB is. There was a saying at the agency that if you live outside the Beltway, you've never heard of it, and if you've lived inside the Beltway, you don't know what it does. But we went through, and he was actually weighing the various merits of taking an "insider," someone who had been in government before, versus a Wall Street private sector person and came up with, I think to the conclusion that he wanted somebody who ... This is so arcane. The budget process, the spending process, the regulatory process, which we also handle at OMB, is so unique that you have to have somebody who's been inside government at least a little bit to understand, if nothing else, the language. So he offered me the job. I was talking to a friend of mine who was on the transition team as I was contemplating to take it or not. I said, "Look, you all know me. I'm not like I'm some wallflower in Congress. I'm fairly public about where I stand on things, and he and I may not agree on everything. Is there going to be room in this administration for dissent? Because if you're looking for a yes-man, you came to the wrong place." And the guys said, "No, no, no, no, no. No, no. Not only are we looking for it and is welcome, we are actively seeking it out." He wants to find the very smartest people in the very best areas of policy, of politics, of everything that we're going to deal with even though they disagree because they disagree, put them into a room together, and that's how he's going to manage. That he will sit back and let the other people make the cases for various sides of the arguments, and whatever sort of good ideas filter through that process are the ones he's going to take and go with. That-
Peter Robinson That's happening?
Mick Mulvaney: That is happening now. Listen, Gary Cohn and I ... Gary Cohn is a-
Peter Robinson: Gary Cohn is the National-
Mick Mulvaney: Economic Council director-
Peter Robinson: Council director.
Mick Mulvaney: From New York. Former Goldman president. Certainly identifies more as a Democrat than I do. Some of the best and most intellectual academic conversations about policy I've had with that gentleman in the last couple of weeks. Better than any I've on the Hill in my six years there. When you sit down with him and Steven Mnuchin and Wilbur Ross and Rick Perry and Betsy DeVos and Scott Pruitt, really good ideas come from that. It's really kind of a neat process to watch. We've only been there 110 days or something like that, so we're still in sort of the beginning of that pipeline, but I'm very excited about the team he's put together because we don't always agree with each other.
Peter Robinson: Again, you're a conservative, and some of your fellow conservatives, Bill Kristol, George Will, Jonah Goldberg, all decided during the campaign that Donald Trump was just fundamentally unfit for office. Unprepared, but also temperamentally unsuited. Too unpredictable, too irascible, too rash. How do you answer those Never Trumpers, your fellow conservatives?
Mick Mulvaney: Yeah. One of their fears were that it would have dramatic long-term negative geopolitical consequences.
Peter Robinson: Yes.
Mick Mulvaney: I think what they're seeing is this is a realpolitik kind of president, that the eight years of the Obama administration, what do they describe it as now, strategic patience or something like that, I think is the name they've given to it.
Peter Robinson: Yes. Yes, that's right.
Mick Mulvaney: Against the eight years of the neo-conservative approach to President Bush that you're seeing a gentleman who recognizes that there are some aspects of the geopolitical world that are a lot closer to the business world than people realize. Say what you want to about how he handled the Syrian situation, by the way. I happen to support it. I thought it was the appropriate reaction at the appropriate time and the appropriate circumstances. A very measured response.
Peter Robinson: How he handled the use of chemical weapons.
Mick Mulvaney: Correct.
Peter Robinson: Within 72 hours, the United States of America had launched 59 cruise missiles on the Syrian government's air base.
Mick Mulvaney: And drew the line. It's because they used chemical weapons, and if we do not take some action, then the underpinnings of international law that prohibit the use of chemical weapons would become eroded, and it could become more commonplace without fear of retribution in the future, so you had to sort of undo the damage that the Obama administration had been done. That worked, and all of those folks who are sitting there saying "Well, he doesn't have the temperament to do the job. He doesn't" ...
Peter Robinson: I see. Okay.
Mick Mulvaney: They might not have liked how he did it, while he was sitting at dinner with the Chinese, but I can assure you one thing, it got the Chinese attention.
Peter Robinson: So you're arguing here that it was a measured response. The argument is he's too rash, but it was actually a measured response. It was neither Obama's inaction nor was it George W. Bush's impulse to go in and rebuild an entire country. This is a limited action with a limited objective. Do not use chemical weapons. Correct?
Mick Mulvaney: Combined with the fact that it coincided with the meeting with the Chinese and certainly put them on notice that maybe there was a new administration in town that would work to our advantage in our other international relations. So to all the critics, especially Mr. Kristol, who has been extraordinarily harsh on the President, I think that the first 120 ... If they went down the lists of successes in the first 120 days, foreign policy, which I know drives a lot of Mr. Kristol's interests, has probably been at the top of the list of successes.
Peter Robinson: Okay. I'm talking to a graduate of Charlotte Catholic High School.
Mick Mulvaney: Yes, you are.
Peter Robinson: And then you went to the Jesuits at Georgetown.
Mick Mulvaney: Yes.
Peter Robinson: And as best I can make it out, you remain a serious and practicing Catholic.
Mick Mulvaney: I try.
Peter Robinson: Okay. You know the bishops have a little trouble with Donald Trump. The American Catholic bishops, they denounced his stance on immigration. I've got here a statement. I looked over the U.S. Council of Catholic Bishops website just yesterday, and you don't have to look very hard at all to find official statements denouncing Donald Trump. They called his executive order on the refugees shameful. The newest statement calls on the Senate to strip out the harmful proposals from the healthcare bill that passed in the House and that the President supported. What do you say to the bishops? What do you say to your fellow Catholics who say this man is simply not with us?
Mick Mulvaney: I've said this to the bishops, said this to my bishop, as a matter of fact, and to my parish priest who is a brilliant man and will end up being a bishop someday soon. First of all, thank you for participating in the process. It had been a long time. I've been a practicing Catholic since I was born. I don't remember the priests going to the pulpit and talking about politics when I was a young man, and they started doing it. They started doing it at a strange time. After the bishops had supported the original Affordable Care Act, what we now know as Obamacare, 10 years ago, I don't remember them talking about that from the pulpit, but I do remember them paying attention after the Obamacare law had become law about the lack of necessary religious protections in the bill. I'm speaking specifically of the Little Sisters of the Poor and those types of things-
Peter Robinson: Exactly. Hold on. The Obama administration supported an interpretation of the legislation that would have forced, indeed they did force the Little Sisters of the Poor, a small order of nuns who take care of old people, to supply contraceptives in their insurance policy.
Mick Mulvaney: Correct.
Peter Robinson: Okay. Go.
Mick Mulvaney: Mandated. In fact, writ large, here's the case that I've made to members of my faith. One of the very dangerous parts, I think, of the Obama administration policies was that they were trying to redefine the practice of religion. By the way, you've heard this sort of percolate through the left's talking points. Whenever they talk about the First Amendment now, it's not freedom of religion. They've tried to change it now to freedom from religion. You'll hear that on television from time to time. But they tried to redefine it so that religious protected activity is just that which happens inside the four walls of the sanctuary so that ... They're okay with the Catholic priests not allowing female priests. That's not discrimination. But when they run a Catholic school, they can't discriminate against, say, homosexuals because that's not really practicing the faith. When there's a Jewish hospital, that's not really the practicing of the faith. That's the Obama interpretation. Once you move outside the four walls of the sanctuary, it's no longer a protected activity. That is extraordinarily dangerous. As I sit and talk to my Catholic friends, Catholic leaders, I point out, look, that speaks to the very heart of what we do. You cannot be a Catholic and only perform your faith inside the four walls, so we will be pushing back against that. We have done that. We did the religious liberty executive order this week. We can talk about that a little bit if you want to. I know that the President is getting ready to go overseas in about two weeks, and on the list of things he's going to be talking about is the treatment of religious minorities. Christians, Jews, other minority faiths in the Middle East. We're getting ready to convene a meeting of leaders from all over the world in Washington, and we're participating in that in about two weeks. So faith is a very important part of this administration, and I would encourage my Catholic friends to focus on that.
Peter Robinson: All right. The big problems. You're still in the first months of the new job of course, and the day-to-day demands are intense. But longer term, let me just ask you about a couple of the big problems.
Mick Mulvaney: Mm-hmm (affirmative).
Peter Robinson: I'll quote the-
Mick Mulvaney: There's only a couple?
Peter Robinson: Yeah. Well, actually, in a certain sense, if you take a long enough view, there are only a couple I think. You correct me. Hoover fellow, colleague of mine here at the Hoover Institution, former chairman of the Council of Economic Advisors Ed Lazear writing in The Wall Street Journal just the other day, "The Congressional Budget Office projects growing deficits exceeding 7% of GDP annually in just two decades." We're a little under 3% GDP now-
Mick Mulvaney: Yup.
Peter Robinson: In annual deficits. Ed continues, "Unless we are willing to accept major tax increases, we will need to reduce government spending significantly, and this means reexamining entitlements, particularly Medicare, and Medicaid, and other health programs." And those are some of the very entitlement programs that President Trump during the campaign said, "I'm not going to touch." So here you are, as I said in the intro, and it is simply the case that you are the man in the entire United States most responsible for the federal budget and for these looming problems-
Mick Mulvaney: So don't screw it up, yeah.
Peter Robinson: So don't screw it ... So what are you going to do?
Mick Mulvaney: I did see Ed's piece.
Peter Robinson: You've got a mounting deficit, entitlements take up 73% of the federal budget as it is, right?
Mick Mulvaney: I'm a tremendous admirer of his. I have not met him. I think I'm speaking with him later on today at a forum at Hoover, which will be fantastic.
Peter Robinson: Yes, yes, yes.
Mick Mulvaney: Here's what I would point out to him. There's the missing piece of that analysis, that that's the binary choice, either we have to tax more or spend less. I would suggest to you that you will never balance the budget looking at it through that binary option. You cannot reduce spending enough to balance the budget. That sounds really harsh for a fiscal conservative like me to say, but I'm simply telling you that we have not paved the way politically, either Democrats or Republicans, to explain to people this is what it would take. This is what the government would not be able to give to you, national defense, research, social security, if you're going to balance the budget only by looking at the spending side.
Peter Robinson: Right.
Mick Mulvaney: At the same time, you cannot tax your way to ... If you tax your way to prosperity, everybody would've done it a long time ago because it's easy. Growth is the missing component to what Ed had commented on, and it's what I'll talk about today. We seem to think, and embedded in those Congressional Budget Office numbers that you mentioned, is this new normal. We seem to think that America is a post-developed economy state, that we could only have I think ... CBO numbers from now until infinity are an annual growth rate of 1.9%.
Peter Robinson: Let me just ... Correct me if-
Mick Mulvaney: I want to come back to that, but yeah.
Peter Robinson: No, no, no. When you say the new normal, the recession's dips and so forth, but overall the growth numbers from the Second World War to about the year 2000, with the exception of recessions, but overall when the economy is growing well, the economy's growing up in the range of 3%, in some cases a little higher during the Reagan years-
Mick Mulvaney: Some place between three and three and a half.
Peter Robinson: Correct.
Mick Mulvaney: Depending on how you want to look at it.
Peter Robinson: Then since 2000, and this is important because it's during both George W. Bush and Barack Obama, and it pre-dates the crash of 2008, since 2000, the overall growth rate has just stepped down.
Mick Mulvaney: Correct.
Peter Robinson: So, we've been through a whole generation, more than 15 years of this lower growth rate. Little over 1%, little over 2%, in that range. And you're arguing we don't have to live with it.
Mick Mulvaney: Here's how I have to make the case-
Peter Robinson: You can get back up. Go ahead.
Mick Mulvaney: Here's how I make the case. If you are 30 years old, never in your adult life have you had a job in a truly healthy American economy. You think this is ordinary. When I was 30 years old, I quit my job because I knew that I could go off and start my own company, and the economy would support that. If I had been fired, I could've easily found another job because the economy had supported that. That freed me up to do the things that Americans have already done. We can have a whole conversation another day about the lack of new business formation.
Peter Robinson: Right.
Mick Mulvaney: Because this new normal, this 1.9% growth, people just think that's the way it is. This is not the way that it needs to be. It does not sound like much, Peter, to say "Well, we've only had 2% growth over the last 10 years. We get a 3% growth, that's not that big a deal." We've got some numbers, and it's very difficult to do this, so I'm painting with a very broad brush. That if you had had growth at 3% from the beginning of the recession to today, just 3% annual growth from 2008, let's call it, to today, the budget would be balanced.
Peter Robinson: Yeah.
Mick Mulvaney: All of that deficit is gone because the economy is so much bigger. It's that power of compounding interesting on an economy that's $18 trillion-
Peter Robinson: So you're making a very powerful and absolutely central point, which is don't get drawn off into worrying about tax increases, trying to figure out how much you ... Don't get drawn off into trying to figure out how to cut the ... Concentrate on growth. Growth, growth, growth. I grant the point. The numbers work if you get a growing economy. How do you get the economy growing again?
Mick Mulvaney: Couple different things. By the way, let's close the book on spending because that is important. One of the reasons that the budget would have been balanced today under that hypothetical is that we have actually had some spending restraint the last couple of years. The non-defense discretionary budget since the Republican took control of the House in 2011 is fairly solid. Not saying we need gargantuan reductions in that but just disciplined to not get ahead of yourself and not sort of spend your way into deeper problems. Try and hold that growth steady while you can ... Excuse me. Hold that spending steady while you work on growth. What do you do? And that's when to turn to what we're doing with the tax policy and the other thing that no one gives us nearly enough credit for, which is regulatory policy. There's some really good academic literature out there that suggests that maybe regulatory reform can have twice the impact on economic growth than tax policy can. But that's where you're seeing all of our policies. That's the beginning of our conversations. When I sit down with the President, oftentimes, the first thing out his mouth are "Does this help us get to 3% growth?" That's what's driving everything in the administration because we know, and I think I've been able to convince him, it's the only way you save the country.
Peter Robinson: Got it. Got it. Regulatory reform is hard for the press to follow because it's this regulation that gets rolled back over at that agency, and it's these couple of regulations that get rolled back ... Okay, so-
Mick Mulvaney: You also have to understand the real world to understand regulatory reform, and no offense intended to present company, a lot of folks in the media don't understand the real world.
Peter Robinson: Okay.
Mick Mulvaney: I used to run a Mexican restaurant. When I ran for Congress, I owned and operated a fast fresh Mexican restaurant. I rolled burritos the day that I announced for Congress. There was a regulation that we just killed during the CRA that would've required us to put nutritional information on my menu board at my restaurant. We did the math. Actually, Pizza Hut, I think, did the math because they were-
Peter Robinson: Right.
Mick Mulvaney: If they had followed the regulation to the letter, their menu board would have the size of a football field. That is where-
Peter Robinson: Because there's so many different options of the way you can order your pizza or your Mexican food. Got it.
Mick Mulvaney: Bingo. That's where the real world and the world of politics and regulations sort of work across purposes.
Peter Robinson: Okay. Last question, Mick. Director of Office of Management and the Budget, I'm guessing it's at least 80 hours a week of work. You and your wife still have three kids at home. You heard the quotations I ... So here you go, you get into this grinder of a job, and your reward for it, I just quoted Rush Limbaugh and Ann Coulter. Your own side, your own side is screaming at you, "Do more. You're selling out." Why did you take this job?
Mick Mulvaney: Friends of mine from the Freedom Caucus asked me one time, they said, they were giving me a hard time. I was a founding member of the Freedom Caucus, so we're talking about something during the funding fight, and they said, "Well, it doesn't look like you're winning very much over there, are you, Mick?" And I said, "No. No, I'm not winning much. I win a little bit, but at least when I lose, I'm losing at the very highest level." I used to lose at the Tortilla Coast, sitting in the basement with my conservative friends, and we'd come up with ideas that we knew would never see the light of day. I'm sitting at the Oval Office with the President of the United States trying to make the case, and I don't convince him all the time to do what I would like to do if I were president, but I do get to move the ball a little bit. I get to do a little ... I'm the conservative voice, the fiscal conservative voice in that White House, and I take that duty very seriously. The President gives me full rein to give full throat to that fiscal conservatism. Again, not going to agree with me all the time, but by bits and pieces, bits and pieces I do feel like I'm making a little bit of a difference, which is why everybody goes into this line of work. I've absolutely loved it. The President has been really just a great boss to work for.
Peter Robinson: Could you tell me about the phone call you got when you were just finishing up an early morning workout?
Mick Mulvaney: Yeah. It was the day of the budget thing had got announced, and he called about 6:30 and said that-
Peter Robinson: 6:30 in the morning.
Mick Mulvaney: It was 6:30 in the morning, yeah. And said that he was watching the news, and it wasn't handled very well, and I needed to fix it. That was it. But that's what he does. He doesn't micromanage you and say "Here's what I want to do this, this, this, and this." He's like, "Look, we have a problem. Go fix it." And I think I've been able to serve that role fairly well for him to time to time. That when they need the message out, I can do it. When we want to push back on some narrative that is working against us and we don't think is accurate, I've been able to do that. It's been a fun team to work on. All of this narrative about how it's a poisonous atmosphere in the White House, I can assure you, I love going to work. It is an 80 hour a work day, and I am away from my family for weeks at a time. My wife called me one time and said I needed to come home, and I said, "Well, sweetie, I just came home last weekend." She said, "Sweetheart, that was five weeks ago." It's not only the kind of job where you think it's 11:30 in the morning and you look up and it's 6:00 at night, it's the kind of job where you think it's Tuesday and it's really Sunday. But that's just because it's a very invigorating place to work. You're operating at the very highest level with the leader of the free world, who is a great boss to work for, and I hope I can stay a little bit longer.
Peter Robinson: Mick Mulvaney, Director of the Office of Management and Budget, thank you.
Mick Mulvaney: Peter, thank you for having me.
Peter Robinson: For Uncommon Knowledge and the Hoover Institution, I'm Peter Robinson.