The Cable

Defense Hawks Headed for Collision with Trump’s Budget Czar

Republican hawks in Congress are already at odds with President Donald Trump’s budget czar, a fiscal conservative who has made clear he will reject spending more on defense if it results in a bigger deficit. As a candidate, President Donald Trump promised to dramatically increase military spending to pay for tens of thousands of troops, ...

WASHINGTON, DC - JANUARY 24: President Donald Trump looks on after signing one of five executive orders related to the oil pipeline industry in the Oval Office of the White House January 24, 2017 in Washington, DC. Also pictured are White House Chief of Staff Reince Priebus (L), White House Communications Director Hope Hicks (3rd R) and Senior Advisor Jared Kushner (R). (Photo by Shawn Thew-Pool/Getty Images)
WASHINGTON, DC - JANUARY 24: President Donald Trump looks on after signing one of five executive orders related to the oil pipeline industry in the Oval Office of the White House January 24, 2017 in Washington, DC. Also pictured are White House Chief of Staff Reince Priebus (L), White House Communications Director Hope Hicks (3rd R) and Senior Advisor Jared Kushner (R). (Photo by Shawn Thew-Pool/Getty Images)

Republican hawks in Congress are already at odds with President Donald Trump’s budget czar, a fiscal conservative who has made clear he will reject spending more on defense if it results in a bigger deficit.

As a candidate, President Donald Trump promised to dramatically increase military spending to pay for tens of thousands of troops, scores of ships, and hundreds of new warplanes. But his pick to oversee the Office of Management and Budget, Mick Mulvaney, is a dyed-in-the-wool budget stickler who as a lawmaker repeatedly voted against defense spending hikes, referring to one Pentagon account as a “slush fund.”

Mulvaney, a former congressman from South Carolina and member of the Tea Party “Freedom Caucus” movement, has a long record of opposing defense spending increases without corresponding cuts elsewhere in the federal budget. And it’s not at all clear how his Tea Party outlook fits in with Trump’s plans to drastically expand the Pentagon’s funding.

The first salvo in the coming budget battle came last week, when Senate Armed Services Chairman John McCain (R-Ariz.) and House Armed Services Chairman Mac Thornberry (R-Texas) launched a proposal to set the defense budget at $640 billion for 2018 fiscal year — a big jump from the $551 billion in base budget funding for 2017 — cash they said would jumpstart Trump’s planned military buildup. Money to fund Washington’s wars and counterterrorism operations would come later.

The pair likely went public with their number to get out in front of the White House and Mulvaney on the issue, Todd Harrison, director of the Aerospace Security Project at the Center for Strategic and International Studies, said. “They want to frame the debate whether we have $640 billion or not,” he said.

Foreign Policy has also learned that if confirmed, Mulvaney is prepared to drop what two sources said is being called a “skinny budget,” early next month, which will set topline budget numbers for non-discretionary federal spending for each federal department, but without specific spending lines included.

Details are scarce, but one source said that the number for the Pentagon might be as high as $640 billion, which would match the number that McCain and Thornberry called for.

But there’s a big difference: Wartime funding for combat operations, like in Iraq and Afghanistan, will now have to come out of the overall kitty. In fiscal year 2017, those operations were funded separately, to the tune of $58 billion. McCain and Thornberry would keep the war funding separate, while Mulvaney, long an opponent of the extra-budgetary measure, is likely to push to move it into the overall request.

In his opening statement before a panel of outside experts on the 2018 defense budget on Tuesday, McCain said there’s no hiding the fact that buying tens of billions of dollars worth of new equipment and adding tens of thousands of servicemembers “will not be cheap.” McCain and Thornberry’s plan calls for defense budgets to grow by an additional $430 billion above what has been planned for the next five years.

Aware that the defense budget is going to face a stiff competition for funds under  a Trump administration that is looking to spend big on a variety of programs, McCain added that “national defense must be a political priority on par with repealing and replacing Obamacare, rebuilding infrastructure, and reforming the tax code — indeed, more so, because national defense is job one for the federal government.”

Mulvaney has long been a particularly fierce critic of the Overseas Contingency Operations (OCO) account, which funds the wars in Iraq, Afghanistan, and Syria and elsewhere, and has often been used by the Pentagon as a budgetary gimmick to modernize its forces and pay for spare parts and training efforts outside of normal budgetary processes.

But in his confirmation hearing on Capitol Hill Tuesday, Mulvaney tried to walk the line between his budget-cutting ideology and some Republican Senators’ desire to spend big on defense.

When Sen. Bob Corker, (R-Tenn.) asked if the Pentagon’s current use of the OCO account was “dishonest,” Mulvaney agreed, saying, “that’s just the word I was going to use.” He has also previously called OCO a “slush fund” to skirt Congressionally-mandated budget caps that have slowed the growth of the defense budget in recent years.

For much of the presidential campaign, Trump promised to undo the Budget Control Act which set the spending caps, but the reality it it would take a change in the law to work around the limits, requiring 60 votes in the Senate. Republicans currently hold 52 seats, requiring several Democrats to buck their party, along with a host of Republican fiscal hawks unlikely to vote to scuttle the law.

And Mulvaney has long made common cause with Democrats on defense budget cuts, especially when it comes to the OCO account. “I will look forward to explaining to the president why I think it’s not a good way to spend taxpayer dollars,” he told Sen. Chris Van Hollen, (D-Md.), a longtime ally on the subject.

Mulvaney said he was encouraged by talks he has already held with Defense Secretary James Mattis, “who I believe shares your, my and apparently the president’s commitment to drive efficiencies into operations the Defense Department.”

Those comments will likely alarm defense hawks, but Mulvaney extended a peace offering to McCain and other Pentagon backers. Asked by Sen. Lindsey Graham (R-S.C.) if he supports Trump’s plans to increase defense spending, Mulvaney said, “I do,” adding he is “absolutely in lockstep” with President Trump’s plans to expand the military. But if he slashes the OCO and puts operational funds into the regular budget, that will greatly shrink the amount of extra money available to pay for all the defense goodies Trump has promised.

Mulvaney has also said that any Pentagon spending increases would have to be offset by cuts to non-military spending. That’s a non-starter for Democrats, who, like Mulvaney and his fellow Freedom Caucus Republicans on the Hill, also have no desire to get rid of budget caps that have been placed on the federal budget, including the Pentagon.

Given this, and Mulvaney’s willingness to ally with Democrats on the Hill to cut defense spending, he’ll likely “tighten the noose on OCO,” according to Mackenzie Eaglen, a budget expert at the American Enterprise Institute.

That sets up a potential collision between Trump and the GOP hawks’ desire to beef up the military, on the one hand, and the administration’s own deficit hounds, on the other. On Tuesday, Republicans managed to paper over differences in defense spending plans, but that won’t be so easy once wrangling begins in earnest over the budget this spring.

Photo Credit: Shawn Thew-Pool/Getty Images

Paul McLeary is Foreign Policy’s senior reporter covering the U.S. Defense Department and national security issues. @paulmcleary

Dan De Luce is Foreign Policy’s chief national security correspondent. @dandeluce

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