U.S. GOVERNMENT PUBLISHING OFFICE

26–767 PDF WASHINGTON : 2018

S. Hrg. 115–292 

NOMINATION OF HON. J. MICHAEL MULVANEY 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

NOMINATION OF THE HONORABLE J. MICHAEL MULVANEY TO BE 

DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET 

JANUARY 24, 2017 

Available via the World Wide Web: http://www.fdsys.gov/ 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin, Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

JOHN HOEVEN, North Dakota 

STEVE DAINES, Montana 

CLAIRE MCCASKILL, Missouri 

THOMAS R. CARPER, Delaware 

JON TESTER, Montana 

HEIDI HEITKAMP, North Dakota 

GARY C. PETERS, Michigan 

MAGGIE HASSAN, New Hampshire 

KAMALA D. HARRIS, California 

CHRISTOPHER R. HIXON, Staff Director 

GABRIELLE D’ADAMO SINGER, Chief Counsel 

PATRICK J. BAILEY, Chief Counsel for Governmental Affairs 

MARGARET E. DAUM, Minority Staff Director 

ANNA E. LAITIN, Minority Senior Advisor 

LAURA W. KILBRIDE, Chief Clerk 

BONNI E. DINERSTEIN, Hearing Clerk 
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Johnson ............................................................................................... 3 

Senator McCaskill ............................................................................................ 6 

Senator McCain ................................................................................................ 14 

Senator Carper ................................................................................................. 17 

Senator Paul ..................................................................................................... 20 

Senator Tester .................................................................................................. 22 

Senator Lankford .............................................................................................. 25 

Senator Peters .................................................................................................. 28 

Senator Daines ................................................................................................. 32 

Senator Hassan ................................................................................................. 34 

Senator Heitkamp ............................................................................................ 37 

Senator Portman .............................................................................................. 39 

Senator Hoeven ................................................................................................. 48 

Prepared statements: 

Senator Johnson ............................................................................................... 55 

Senator McCaskill ............................................................................................ 56 

WITNESSES 

TUESDAY, JANUARY 24, 2017 

Hon. Lindsey Graham, a U.S. Senator from the State of South Carolina 1 

Hon. Tom Cotton, a U.S. Senator from the State of Arkansas ............................ 2 

Prepared statement .......................................................................................... 61 

Hon. J. Michael ‘‘Mick’’ Mulvaney to be Director, Office of Management and 

Budget 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 62 

Biographical and financial information .......................................................... 66 

Letter from the Office of Government Ethics ................................................. 104 

Responses to pre-hearing questions ................................................................ 108 

Responses to post-hearing questions .............................................................. 169 

APPENDIX 

30-year Projected Deficits chart submitted by Senator Johnson ......................... 254 

Federal Budget FY16 chart submitted by Senator Johnson ................................ 255 

Income statement submitted by Senator Johnson ................................................ 256 

(1) 

NOMINATION OF THE HONORABLE 

J. MICHAEL MULVANEY 

TUESDAY, JANUARY 24, 2017 

U.S. SENATE,

COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:35 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Ron Johnson, Chairman of the Committee, presiding. 

Present: Senators Johnson, McCain, Portman, Paul, Lankford, 

Hoeven, Daines, McCaskill, Carper, Tester, Heitkamp, Peters, Hassan, and Harris. 

Chairman JOHNSON. This hearing of the Senate Committee on 

Homeland Security and Governmental Affairs will come to order. 

We are here to have a confirmation hearing for Congressman Mick 

Mulvaney for the position of the Director of Office of Management 

and Budget (OMB). 

I am going to switch the script around a little bit to be respectful 

of our Senators’ time here who are going to be doing some introductions, so I certainly want to welcome Senator Cotton and Senator 

Graham. Lindsey, you have a whole new calling in life, introducing 

Cabinet appointees. [Laughter.] 

Senator GRAHAM. Yes, I am looking for a fallback plan. 

Chairman JOHNSON. We will go with seniority, and we will have 

Senator Graham start with his introduction of Congressman 

Mulvaney. 

OPENING STATEMENT OF THE HONORABLE LINDSEY 

GRAHAM, A UNITED STATES SENATOR FROM THE STATE 

OF SOUTH CAROLINA 

Senator GRAHAM. Well, thank you, Mr. Chairman. I know you 

were at the Budget Committee hearing today, and I just want to 

tell Mick I thought you did a very good job of answering hard questions and being yourself. 

To the Committee, I am honored to be here. It is a pleasure to 

introduce Congressman Mulvaney. He is from South Carolina. We 

are a small State, so we know each other pretty well. 

President Trump has picked a lot of talented people, some people 

from the private sector without a whole lot of experience in the job 

which they have been nominated for. I think President Obama did 

that also, and that is a good thing. People can learn jobs if they 

have the right skill set. 
2 

1The prepared statement of Senator Cotton appears in the Appendix on page 61. 

The one thing I can tell you about the nominee here is he understands the budget. He is not a guy who is going to need to get 

caught up on how the Federal Government works. He has made it 

sort of his passion in politics to be involved in all things fiscal. 

I have known him personally for many years now—and we all 

say we are friends. And, in the Senate it is very well true because 

it is such a small group. But we play golf together. We actually are 

friends. He beats me all the time. And he is meticulously honest 

on the golf course, which is a good indication of what kind of public 

servant would be. 

I like him. He has a beautiful wife and triplets. Anybody who can 

raise triplets probably can help the government. 

From an academic background, he is very gifted. From his time 

in Congress, he has been a very fiscally conservative person. Sometimes we do not agree about this part of the government versus 

that part of the government. 

I think I voted for every President Obama nominee without exception. Maybe there is one or two I did not. And let me tell you 

why I chose to support President Obama’s nominees as a point of 

personal privilege. Consequences to an election really matter, and 

the people he nominated, I had different views of what they should 

do in their job, but I came to conclude they were qualified. 

The one thing I can say without any hesitation, whether you 

agree with Congressman Mulvaney about a particular issue, I 

think he is extremely capable and qualified. It is up to you how to 

vote. You can use any standard you would like. I have chosen to 

kind of look at the person’s qualifications. 

You will soon hear over the next few hours a man who understands the budget, and it was brought up that he is so different 

than President Trump in terms of entitlements and spending on 

certain areas of the government. I think President Trump sees in 

Congressman Mulvaney somebody that he can trust, that is smart, 

and will speak truth to power. 

I completely disagree with President Trump’s view about entitlements. If we do not reform them, we are going to lose them. And 

you are going to hear a man who will be excruciatingly honest, who 

has the background to go into the job from day one, and understands what the job is all about. Whether you agree with him or 

not, if he disagrees with you, it is not because of anything other 

than he just disagrees. In his own way, he is trying to help the 

country as much as you are. And sincerity goes a long way with 

me, and Congressman Mulvaney is very smart, talented, but incredibly sincere. 

Thank you for having me. 

Chairman JOHNSON. Thank you, Senator Graham. Senator Cotton. 

OPENING STATEMENT OF THE HONORABLE TOM COTTON,1 A 

UNITED STATES SENATOR FROM THE STATE OF ARKANSAS 

Senator COTTON. Mr. Chairman, Ranking Member, thank you for 

allowing me to appear. I want to add your voice in support of confirming Mick Mulvaney as the next Director of the Office of Man-
3 

agement and Budget. Mick and I have known each other for many 

years now. We served together in the House of Representatives. He 

is a good friend and a trusted confidant, so I speak today from personal experience when I say he will serve our President and our 

Nation with distinction, as you may have seen this morning at the 

Budget Committee. 

The way I see it, the Director’s job is to give the President the 

unvarnished truth. He has to tell the President exactly what things 

cost, partly for the President’s agenda, but mostly for the taxpayer. 

The President, of course, sets the agenda, but he deserves a cleareyed view, not rose-colored glasses. 

And for the last 6 years, Mick has been telling many hard truths: 

We are spending too much. Regulations are strangling our small 

businesses. And short-changing our military will only cost us more 

in the long run. 

Mick also understands the hardest truth of all, at least for big 

spenders here in Washington: It is the American people who 

earned this money through their hard work and sacrifice. Mick will 

treat every taxpayer dollar as if it were his own. And trust me, 

that means that he will watch those dollars like a hawk. 

In Arkansas, many people still stop to ask me what we are doing 

about the national debt. It is a huge concern. So with his eagleeyed focus on spending, Mick will be a crucial voice in the President’s Cabinet. He will represent millions of Americans who are 

deeply worried about the burden we are leaving our children. And 

while Mick is deeply principled, he also knows how to work with 

others and make progress wherever we can. 

In short, Mick is a fine choice to run the Office of Management 

and Budget. I urge you not only to advance his nomination, but 

also to do so as soon as possible. Under the law, the President is 

required to submit a budget to Congress early next month, which 

will be very difficult without a new Director. I also hope the full 

Senate will confirm him promptly. 

Thank you for your time today and for your consideration of this 

passionate advocate for the taxpayer, a bold truth teller, and my 

friend, Mick Mulvaney. 

OPENING STATEMENT OF CHAIRMAN JOHNSON 

Chairman JOHNSON. Thank you, Senator Cotton. And, again, 

thank you Senator Graham. 

Congressman Mulvaney, we would like to welcome you, your 

wife, Pam. Did your son James get through the tunnel? 

Mr. MULVANEY. He just barely made it in time. 

Chairman JOHNSON. Well, that is great. Again, we thank you for 

your past service to this country and your willingness to serve 

again. And we certainly thank your family. This will be more than 

a full-time job, so you are also making a sacrifice. 

I was at the Budget Committee hearing, and obviously we focused on the budgetary aspects of this job. But it is the Office of 

Management and Budget. This Committee has a mission statement: to enhance the economic and national security of America. 

Your position is going to be critical in terms of that enhancement. 

And no matter what problem we are dealing with, no matter what 
4 

1The chart referenced by Senator Johnson appears in the Appendix on page 254. 

2The chart referenced by Senator Johnson appears in the Appendix on page 255. 

3The chart referenced by Senator Johnson appears in the Appendix on page 256. 

challenge this Nation faces, from my standpoint the number one 

component of the solution is economic growth. 

But we are not even coming close to realizing the full potential 

of the American economy. Since the Great Depression, our economy 

has grown about 3.2 percent. Since the Great Recession, it has 

been growing right about 2 percent. 

From my standpoint, there are four basic reasons for that. We 

are not utilizing our energy resources to the extent we should; we 

must begin to. We do not have a competitive tax system. But the 

other two main reasons, I would argue, come fully under the jurisdiction of this Committee, but also under the purview of your new 

responsibility if you are confirmed as Office of Management and 

Budget Director, and it is regulation and debt and the deficit. 

I would like to start on a couple charts here. I know in the Budget Committee Senator Whitehouse had a pretty good chart that you 

liked. I have my own. We will start with the 30-year deficit.1 Just 

like a family that is in debt over its head, you could ask that family: How can you grow your personal economy if every cent of income is really devoted to the basic necessities and servicing the 

debt? Well, a nation-state is the exact same way. And not only are 

we almost $20 trillion in debt—in other words, we are in debt over 

our head as a Nation—but over the next 30 years, according to the 

Congressional Budget Office (CBO), the deficit is projected to be 

$103 trillion—$10 trillion the first decade, $20 trillion the second, 

$68 trillion the third. And that compares, by the way, just to show 

you the magnitude of this, to the entire net private asset base of 

America at $116 trillion. Clearly, that is unsustainable. It is something that the Federal Government have to grapple with, or we will 

never achieve the type of economic prosperity that certainly our 

children should expect from our economy. 

That is why I want to just throw up the fiscal year (FY) 2016 

Federal budget as a bar chart.2 Get that up there. You will notice 

on this bar chart there are two colors: there is red and there is 

blue. 

Red represents all the mandatory spending—Social Security, 

Medicare, Medicaid, interest on the debt. So many dollars are spent 

where there is no appropriation. It is on automatic pilot, and it is 

out of control. It is about 70 percent of our budget. 

The blue represents discretionary spending. That is what we 

fight over in terms of the budget. That is what is appropriated. It 

is a little over $1 trillion out of our $3,854 billion current year 

budget. 

This clearly has to be brought under control if we are ever going 

to restrain the growth in debt so we can achieve the type of prosperity we need. 

The components—and everybody has these charts in front of 

them in terms of a piece of paper. I have another piece of paper 

in front of the Senators. I think it might be in front of you, Congressman Mulvaney. I call this the income statement3 of the 

United States, and this is over that same 30-year period, just demonstrating that the component of that $103 trillion deficit is $14 
5 

1The prepared statement of Senator Johnson appears in the Appendix on page 55. 

trillion over the next 30 years of deficit in Social Security, $34 trillion Medicare, and the rest, $54, $55 trillion, is interest on the 

debt. So if we do not want to pay over the next 30 years $55 trillion 

to our creditors, we have to address the unsustainable situation in 

both Social Security, but in particular Medicare. 

So those are just the facts. Those are the realities. That is the 

reality that collectively here in the Federal Government we have 

been denying for far too many years. But at some point in time 

there will be a point of reckoning. So, again, that is the budget reality that we are faced with. 

The other thing we are going to have to grapple with in terms 

of economic growth, the other thing that is really restraining the 

growth of our economy, is overregulation. It is a massive burden. 

We have held a number of hearings in this Committee on it. A 

number of studies show that we are approaching $2 trillion per 

year as the cost of complying with Federal regulations. 

I know in your testimony, Congressman, you talk about the debt 

burden per family. I will not steal your thunder. But the regulatory 

burden is about $14,800 per year per family. 

I was talking to a Chief Executive Officer (CEO) of a Wisconsin 

paper manufacturer. By the way, I cannot tell you who it is because that CEO feared retaliation by his government, which is a 

pretty sad commentary. But he did the cost calculation on just four 

regulations recently issued. The cost was the equivalent of $12,000 

per year per employee. Just four regulations. Now, that is $12,000 

that the Wisconsin paper manufacturer does not have available for 

increasing wages and benefits and investing in the business to 

grow it to create more jobs. It is that regulatory burden that really 

is, I think, the number one reason why our economy is not realizing its full potential. 

One last anecdote on overregulation. For the last 2 years, the 

chancellor of the University of Wisconsin-Madison has come into 

my office complaining about overregulation as it relates to the university system. This last year, she came in with a study commissioned by other research universities. The conclusion of that study 

said that 42 percent of researcher time spent on Federal Government grants was spent complying with Federal regulations. Think 

of the opportunity cost, think of the diseases where we are spending 42 percent of the time filling out paperwork as opposed to trying to determine a cure for those. 

So the overregulation has an enormous cost to our economy, and 

that is something that, as Director of OMB, hopefully you will have 

a great deal of input in terms of cutting back and curbing so we 

can realize our full potential. 

I do have a written statement that I would ask unanimous consent to enter into the record.1

With that, I will turn it over to Senator McCaskill, my Ranking 

Member. 
6 

1The prepared statement of Senator McCaskill appears in the Appendix on page 56. 

OPENING STATEMENT OF SENATOR MCCASKILL1

Senator MCCASKILL. Thank you. Thank you, Congressman 

Mulvaney, for being here, and thank you, Mr. Chairman. I wish I 

did not have to begin my opening talking about process. Mr. 

Mulvaney has submitted all the necessary documents for consideration by the Committee, including 3 years of tax returns, and the 

Office of Government Ethics has completed its review of conflicts. 

And we have a signed letter regarding Congressman Mulvaney’s 

agreement to address potential conflicts of interest. 

However, I am not aware that there has been a precedent for us 

going forward with a hearing when we have not had an opportunity to review the nominee’s Federal Bureau of Investigation 

(FBI) background check. I was told we would see it last week, and 

then it was moved up to yesterday, and then we learned today that 

it is still was not ready. 

I do not fault the nominee for this, but it is evidence of a rushed 

process that we are witnessing. I am disappointed that we are 

holding this hearing without the FBI review being completed. I 

think it is a bad precedent for this Committee to do that, and I 

would like to work with you and the FBI to ensure this does not 

happen with any future nominees. 

I look forward to a commitment from you that we will not hold 

a markup or a vote on moving forward on this nomination to the 

full Senate for confirmation. 

Chairman JOHNSON. You can have that commitment. I want to 

see the FBI file, as you do, too. We will do our due diligence. You 

will have plenty of time, I am sure, Congressman Mulvaney will 

come back in and answer any questions we have based on whatever 

that FBI file tells us. 

Senator MCCASKILL. Since November 9th, Americans have been 

searching to understand what is next for this country. The growth 

of our economy and the jobs of so many Americans depend on our 

country remaining a stable and relatively predictable place to do 

business—where businesses and the Federal Government alike 

have the ability to plan for the future. 

Despite this, to date the Trump Administration’s plan for the 

economy changes with each news cycle, and the strategy appears 

to shift depending on which nominee or which member of the transition team is speaking. 

Just last week at a hearing, Mr. Mnuchin, the nominee for the 

Secretary of the Treasury, said that after the inauguration, the 

Trump Administration would speak with ‘‘a unified voice.’’ 

Four days ago, President Trump was sworn in, and the Trump 

Administration began. Despite the transition of power and the 

start of a new Administration, on issues like Social Security, health 

care, Medicare, and taxes, we are still searching for that unified 

voice. 

The Director of the Office of Management and Budget is charged 

with implementing and articulating the President’s policy agenda. 

If confirmed, Representative Mulvaney, you will hold a post that 

influences policy proposals, budget appropriations, the management of Federal workers, and the safeguarding of our regulatory 
7 

process. Your core job will be to take the President’s ideas and 

make them clear and cohesive policy. 

Despite your willingness to serve, I cannot help but question how 

you will achieve this when the views that you have expressed for 

so long do not align with those of the President or other members 

of the Cabinet. You are a self-described ‘‘hard-core conservative.’’ 

You support cuts to Medicare and Social Security and drastically 

shrinking the size of government through the elimination of agencies, Federal programs, and Federal workers. You have voted for 

and supported the shutdown of the Federal Government several 

times and have dismissed concerns about failing to lift the debt 

ceiling as ‘‘just posturing.’’ You have said that, ‘‘We have to end 

Medicare as we know it.’’ And you have advocated cuts and fullscale overhauls of the program. Meanwhile, during his campaign 

President Trump said that he would make no changes to Medicare. 

Representative Price, the nominee for Secretary of the Department of Health and Human Services (HHS), who has also advocated for changes in the Medicare system and block granting Medicaid, told a Senate Committee last week that the President’s plan 

remains the same. 

The situation is almost the exact same on Social Security. You 

have advocated changes and cuts and at one point in time actually 

called Social Security like a ‘‘Ponzi scheme,’’ while the President 

said during his campaign he would not alter Social Security at all. 

In voting against emergency funding after Hurricane Sandy, you 

said, ‘‘We have mismanaged our own finances to the point where 

we are now no longer capable of taking care of our own.’’ The President has made clear that he intends to increase spending by initiating massive infrastructure projects, such as the Wall, even if we 

have to pay for it, as promised on Friday during his inaugural address, building ‘‘new roads, highways, bridges, airports, tunnels, 

and railways all across our wonderful Nation.’’ 

After this hearing, we will understand more about your background and beliefs, but we may not have a better understanding 

of how and whether those beliefs will have any impact on the 

Trump Administration. How will we know which policies will be 

implemented when the President and his Cabinet have such different views on such important topics? 

Not only am I worried that we will not have the stability we are 

looking for from the incoming Administration, I am not certain that 

you, a man who has stuck to his principles admirably and has not 

often been forced to compromise, fully grasp the responsibilities of 

the position that you have been nominated to. 

Many of your proposals, like your willingness to allow the Federal Government to default on its obligations, would have far worse 

implications than I believe you are willing to concede. In fact, you 

once said that you had yet to meet someone who could articulate 

the negative consequences of the United States failing to raise the 

debt ceiling. If that is the case, you simply have not been listening 

to the economists, the Treasury Secretary, to the nominee for 

Treasury Secretary of this President, or even former OMB Directors of both parties, who tell a much different story. 

But perhaps there was comfort in being able to say these things 

knowing that cooler heads would prevail and no one would ever 
8 

1The prepared statement of Mr. Mulvaney appears in the Appendix on page 62. 

have to find out the consequences of your rhetoric. But now you are 

seeking confirmation to a Cabinet-level post with great responsibility and power. What will happen if your views and proposals are 

adopted wholesale? If that happens, I fear the American people and 

the global economy are in for a rude awakening. 

Throughout this hearing I will be listening closely to better understand how you will reconcile your beliefs with those of the President and how as Director of the Office of Management and Budget 

you will implement the vision of a Trump Administration that 

speaks with ‘‘a unified voice.’’ I look forward to hearing your answers. Thank you, Congressman. 

Thank you, Mr. Chairman. 

Chairman JOHNSON. Thank you, Senator McCaskill. 

It is the tradition of this Committee to swear in witnesses, so 

please rise and raise your right hand. Do you swear the testimony 

you will give before this Committee will be the truth, the whole 

truth, and nothing but the truth, so help you, God? 

Mr. MULVANEY. I do. 

Chairman JOHNSON. Please be seated. 

Congressman Mick Mulvaney has represented the 5th District of 

South Carolina since 2010 and was a State representative from 

2006 to 2010. In the House of Representatives, Congressman 

Mulvaney has served on the Oversight and Government Reform 

Committee, the Budget Committee, and the Financial Services 

Committee. He is a graduate of Georgetown University and holds 

a law degree from the University of North Carolina and an executive degree from Harvard Business School. If confirmed, Congressman Mulvaney will bring with him to the position, in addition to 

that experience in government, a wealth of knowledge from his experience as a small business owner in the real estate, construction, 

and restaurant industries. Congressman Mulvaney. 

TESTIMONY OF THE HONORABLE J. MICHAEL ‘‘MICK’’ 

MULVANEY1 TO BE DIRECTOR, OFFICE OF MANAGEMENT 

AND BUDGET 

Mr. MULVANEY. Chairman Johnson, Ranking Member McCaskill, 

thank you again for having me. It is an honor and a privilege to 

be here, and I am pleased to offer my qualifications for the position 

of the Director of the Office of Management and Budget. I also 

want to thank the President for the confidence that he has shown 

in me in nominating me for this post. 

I also want to especially thank Senators Graham and Cotton for 

taking the time to introduce me. It is nice to have my friends be 

able to do that. 

I also want to especially thank my family, a few of whom are 

here today. My wife is seated behind me, and you saw one of the 

triplets slip in a little bit late, but at least he put on a tie, which 

is kind of nice. James is here. His siblings Caroline and Finnegan 

are home in South Carolina at school. 

I think as Members of this Committee know as well as anybody, 

the burdens of what we do, the public service we do, falls probably 

most heavily on our families, and we probably do not get a chance 
9 

often enough to say this, and we certainly do not get a chance to 

do it on national television. So with the permission of the Chairman, I am going to say this: I am extraordinarily proud of my family, my children, the young people that they have become, and my 

wife. I was asked during this process one time to sum up who I 

was in one sentence, and all I could think to say was that I love 

my wife, and I am glad that she is here today and in my life. 

Finally, I am grateful to the Members of the Committee for taking the time over the course of the last couple weeks to sit down 

and talk about issues, to talk about your views. And should I be 

confirmed, I look forward to continuing to do that because I think 

anyone who is familiar with the Office of Management and Budget 

knows that you cannot do this job alone. And I think maybe a 

Member of Congress knows that better than most. Several former 

members of the House and the Senate, including Senator Portman, 

Mr. Nussle, and Mr. Panetta, have all served in the Office of OMB 

with distinction. They have set an extraordinarily high bar and 

provided a good example for all of those who follow, set a good example of how the OMB Director should interact with and serve the 

President, the Congress, and the American people. And if confirmed, I will use those as role models. 

You deserve the truth, as do the American public, and it is the 

OMB Director’s responsibility to tell you—and the President—the 

truth, even when that might be hard to hear. 

Part of the thing that is hard to hear is that for the first time 

in our history, there is a chance that the next generation may be 

less prosperous than that that preceded it. To me, and to the people in this room, I know that that is completely unacceptable. We 

can turn this economy around. We can turn this country around. 

But it is going to take difficult decisions today in order to avoid 

taking nearly impossible decisions tomorrow. Our gross national debt is roughly $20 trillion. That number that 

is so large, it is hard for most people, myself included, to grasp. I 

prefer to look at it another way: If you convert that amount of 

money in what we make or take in as a Nation every single year 

to the ordinary American family that makes $55,000 a year as a 

household, that is the equivalent of that family having a credit 

card debt of $260,000. American families know what that would 

mean to them, and it is time for government to figure out that 

same lesson. 

I believe as a matter of principle, that the debt is a problem that 

must be addressed sooner rather than later. I also know that fundamental changes are needed in the way we spend and tax if we 

truly want a healthy economy. This must include changing our 

long-term fiscal path, which is unsustainable. 

Part of fixing our problem also means taking a hard look at government waste and then ending it. American taxpayers deserve a 

government that is efficient, effective, and accountable. American 

families earn their money honestly; they deserve to have us spend 

it in the same fashion. 

But fixing the economy does not mean just taking a green eyeshade approach to the budget. Our government is more than just 

numbers. A strong and healthy economy allows us to take care of 

our most vulnerable. Pam’s mom relied on Social Security in her 
10 

retirement. She relied on Medicare before she passed away from 

cancer. We were glad that that safety net was there for her. We 

would like very much for that safety net to be there for her grandchildren, our triplets. 

All that being said, I know many of the Members of this Committee will want to know what my positions will be as the OMB 

Director. I am, of course, not yet in the position, and I do not presume to know about decisions I might make, much less what the 

decisions of the President will be after consulting his Cabinet and 

other advisors. I do know what I believe, however, and I look forward to discussing whatever topics you consider relevant today. I 

have not exactly been a shy Member of Congress for the last 6 

years, and I do not expect to begin today or, should you confirm 

me, over at the Office of Management and Budget. 

At the same time, I recognize that good public service—whether 

it is the State legislature, the Federal legislature, or in the Executive Branch—takes both courage and wisdom, the courage to lead 

and the wisdom to listen. I have learned that I do not have a 

monopoly of good ideas. Facts—and the cogent arguments of others—matter. And my commitment to you today is to take a factbased approach and to listen to various ideas about how to get our 

financial house in order. 

As you know, OMB also performs other significant functions regarding management, plays a significant role in the regulatory climate, as well as many other duties, as all of you folks know. I look 

forward to talking to you about all of those issues as you see fit. 

And if confirmed, I look forward to working with Congress—and 

serving the President—to address the challenges on behalf of all 

the American people. 

With that, I thank you for your time, Mr. Chairman. 

Chairman JOHNSON. Thank you, Congressman Mulvaney. 

There are three questions the Committee asks of every nominee 

for the record. First, is there anything you are aware of in your 

background that might present a conflict of interest for the duties 

of the office to which you have been nominated? 

Mr. MULVANEY. No, sir. 

Chairman JOHNSON. Do you know of anything, personal or otherwise, that would in any way prevent you from fully and honorably 

discharging the responsibilities of the office to which you have been 

nominated? 

Mr. MULVANEY. No, sir. 

Chairman JOHNSON. Do you agree without reservation to comply 

with any request or summons to appear and testify before any duly 

constituted Committee of Congress if you are confirmed? 

Mr. MULVANEY. I will fully cooperate with all those requests. 

Chairman JOHNSON. Thank you. Let me just ask one question, 

and then I will reserve the balance of my time. I know you are very 

forthright regarding the issue you had with paying back taxes and 

payroll taxes for a babysitter, so I would like to give you this opportunity to start off the hearing to explain the situation with the 

babysitter for your premature triplets? 

Mr. MULVANEY. Sure, and I would be happy to do that, and I 

think we had a chance to talk about it with various Members of 

the Committee. My children were born, the triplets were born in 
11 

2000, and when they came home, we hired someone to help with 

them. And we hired what we considered to be a babysitter. It was 

a young woman who did not live with us, did not teach the children, did not cook or clean. She helped my wife with the children. 

And we did not withhold Federal taxes or State and Federal unemployment taxes on them. And, honestly, I did not think about it 

again until December. 

When you are nominated for one of these positions, you get information from the transition team, and one of them was a checklist 

that says, ‘‘Have you ever had a babysitter, nanny, governess, or 

au pair?’’ And I checked, ‘‘Yes.’’ And they immediately sent me an 

Internal Revenue Service (IRS) circular. And when I looked at it, 

I immediately realized that we had made a mistake and that we 

should have withheld those taxes and should have paid unemployment. 

I did the only thing I know to do under the circumstances, which 

is to simply tell everybody. I told the transition team. They communicated to the President. I told my accountant. And we sat down 

trying to figure out how to make amends, how to redress the situation. 

And so what we have done is we notified the IRS; we paid all 

the taxes that were outstanding. We refiled I think Schedule H for 

the relevant years, and we are waiting to hear back from the Federal Government regarding penalties, late fees, and so forth. 

I recognize the fact that I made a mistake. It was my responsibility. But once it was brought to my attention, I did the only thing 

I know to do, which is simply be straightforward about it, admit 

the problem, and then try and fix it. 

Chairman JOHNSON. Thank you. Again, I will reserve the balance 

of my time. Senator McCaskill. 

Senator MCCASKILL. Thank you. I want to explore a little bit the 

inconsistencies, if I could, and see if we can try to reconcile any of 

them. Let me start first on the debt limit, and I am going to start 

with your quote: 

‘‘I have heard people say that if we do not raise the debt limit, 

it will be the end of the world. I have yet to meet someone who 

can articulate the negative consequences.’’ 

And, in fact, in my office, we had a chance to talk about how you 

would prioritize payments if we did not raise the debt ceiling, who 

would get paid first and who would be at the end of the line, envisioning a potential failure to raise the debt ceiling. 

I was then surprised when we questioned Steve Mnuchin, the 

nominee to be Treasury Secretary, when he said absolutely raising 

the debt ceiling, that is not about spending, that is about paying 

obligations that have already been made. He went on to say that 

he supported raising the debt ceiling 100 percent. He said, ‘‘The 

President-elect has made it perfectly clear’’—I am quoting him 

now—‘‘that honoring the U.S. debt is the most important thing.’’ 

And, finally, he said in the hearing, ‘‘I would like to see us raise 

the debt ceiling sooner rather than later.’’ 

Now, how do you reconcile those two positions, Congressman? 

Mr. MULVANEY. Thank you for that, Senator. A couple different 

things. 
12 

As you will recall, back during, I believe, the last time we had 

a debt ceiling discussion in this country was 2013, and the rhetoric 

was extraordinarily high. My comment that you made was something I believe I said—the statement is accurate—was that I had 

not found anybody yet who could explain to me exactly why that 

rhetoric was so high. And I was surprised to find that at the time 

the Treasury Secretary, who you would expect to be out trying to 

calm markets, was actually doing the exact opposite. 

We did happen to find out after the fact, by the way, that while 

he was publicly saying that we would default, he was privately telling the primary dealers in Federal debt that he would pay the interest on the debt. So I think that goes to the environment at the 

time. 

Senator MCCASKILL. But, Congressman, let me interrupt you 

there just to try to point this out. The discussion about whether or 

not we are going to raise the debt ceiling is a debate on whether 

or not we are going to honor our obligations. That, of course, is 

going to roil the markets. It does not matter who is Secretary 

Treasury. I mean, the whole discussion that it would be considered 

that we would not raise the debt ceiling in order to meet previous 

obligations, with some of the rhetoric, in all due respect, from your 

side of the equation, gave people the impression that raising the 

debt ceiling was allowing more spending. And that is just not true. 

Mr. MULVANEY. That is a true statement. Raising the debt ceiling does not allow more spending. That is appropriations bills that 

do that. But I encourage you to recognize the fact that this is not 

a new discussion. Yes, we had one recently in 2013. But debt ceiling debates go back a long ways. As a matter of fact, there is a 

Government Accountability Office (GAO) letter that was issued in 

1985, which I still believe it is technically not law, but it is still 

effective guidance—that dealt with what would happen in terms of 

prioritization back in 1985 if we bumped up against the debt ceiling. 

So, again, my interest was in lowering the temperature of the 

rhetoric, not in stirring things up. 

Senator MCCASKILL. OK. So you disagree with the would-be Secretary of Treasury, Secretary Mnuchin. Will you try to influence 

him that, in fact, you should withhold support for raising the debt 

ceiling? 

Mr. MULVANEY. No, ma’am. A couple different things. I think the 

quotation you attributed to him was that he thought that paying 

debts was the most important thing we could—— 

Senator MCCASKILL. No. Raising the debt ceiling. 

Mr. MULVANEY. I thought—— 

Senator MCCASKILL. He said sooner rather than later. He said, 

‘‘I would like to raise the debt ceiling sooner rather than later.’’ 

Mr. MULVANEY. Then I believe he went on and said that paying 

the debts was one of the most important things we could do. 

Senator MCCASKILL. I am quoting Mnuchin saying, ‘‘The President-elect has made it perfectly clear that honoring the U.S. debt 

is the most important thing.’’ 

Mr. MULVANEY. I could agree with that. 
13 

Senator MCCASKILL. OK. And what about the Congress raising 

the debt ceiling? Will you be over here lobbying for Congress to 

raise the debt ceiling? 

Mr. MULVANEY. I will be doing whatever the President asks me 

to do. I hope—— 

Senator MCCASKILL. OK. That is what I wanted to hear. 

Mr. MULVANEY. Right. 

Senator MCCASKILL. I also want to point out that in 2013 you 

said, ‘‘We believe the 2013 government shutdown was good policy.’’ 

Do you still believe that? 

Mr. MULVANEY. Yes, ma’am. I think the last bill that the House 

sent over to you—I think the discussion in 2013 turned on something that was counterfactual. It said that we tried to shut the government down over defunding Obamacare, which is wrong at many 

levels. What the House did is send an appropriations bill that 

would delay the implementation of Obamacare’s individual mandate for 1 year. 

Senator MCCASKILL. OK. 

Mr. MULVANEY. We did that for a reason, because the President 

had just recently given that exact accommodation to corporations 

in this country. 

Senator MCCASKILL. You were trying to make a point with it. 

Mr. MULVANEY. That is correct. 

Senator MCCASKILL. I get that. And it was a point that you felt 

very strongly about, which I respect. But I am just wondering if 

you still believe a government shutdown could be good policy if it 

is to make a political point. 

Mr. MULVANEY. A government shutdown is never a desirable 

end. 

Senator MCCASKILL. OK. Defense spending. I hate to cut in my 

friend’s questioning because I have a feeling he might ask about 

this, but I am quoting you now: ‘‘Defense has to be cut. It has to 

be on the table, no question.’’ 

Once again, another quote: ‘‘I am comfortable that the government will continue to exist after the sequester.’’ 

Versus the President, who said, ‘‘As soon as I take office, I will 

ask Congress to fully eliminate the defense sequester and will submit a new budget to rebuild our military.’’ 

Have you changed your mind about military cuts? 

Mr. MULVANEY. No, ma’am. I have voted many times for exactly 

what the President just laid out, which was to increase the top-line 

defense number. And I have had a chance to discuss with General 

Mattis, although we have not talked specifics because I do not want 

to get into that prior to the Senate making its determination. But 

I am absolutely in lockstep with the President in terms of trying 

to figure out ways to increase the top-line defense number. 

Your first statement, which I think harkens back to when I first 

got here, is something that I have been talking about since I arrived here, which is that I think it is incumbent upon my party to 

treat all waste equally. 

Senator MCCASKILL. OK. 

Mr. MULVANEY. That waste in the welfare department and waste 

in the Agriculture Department is waste just like waste in the De-
14 

fense Department, and that if we are not willing to talk about 

those things equally, it undermines our credibility. 

Senator MCCASKILL. OK. On health care, ‘‘I do not believe that 

health care is a fundamental right, because once you declare that 

it is a fundamental right, that means someone has a fundamental 

obligation to pay for it.’’ You said that in 2010. 

Versus the President, who said: ‘‘You know, there are many people talking about many forms of health care where people with no 

money are not covered. We cannot have that.’’ 

Do you agree with the President that we cannot have people with 

no money not having health care? 

Mr. MULVANEY. I think it is important to recognize that in each 

of these examples, what you have done is correctly point out a position that I took as an elected Representative of the 5th District of 

South Carolina, and I have done the very best I could to represent 

those people to the best of my ability. I come from a very conservative part of South Carolina, and I think they are very happy with 

my representation. 

Senator MCCASKILL. You are not telling the people of South 

Carolina you are going to get more liberal now that you are working for President Trump, are you? 

Mr. MULVANEY. No. I will tell you the same thing I tell them, 

which my role is getting ready to change. I would like to think that 

the President has invited me to join his Cabinet in order to bring 

those perspectives to the table. But at the end of the day, when the 

President gets together with all of his advisers and says, ‘‘Here is 

the plan going forward,’’ then it would be my job to enforce those 

policies to the best of my ability. And I am absolutely comfortable 

doing that. 

Senator MCCASKILL. Thank you, Mr. Chairman. I will save the 

rest of mine for next. 

Chairman JOHNSON. Senator McCain. 

OPENING STATEMENT OF SENATOR MCCAIN 

Senator MCCAIN. Mr. Mulvaney, in 2011, did you vote for the immediate withdrawal of U.S. troops from Afghanistan? 

Mr. MULVANEY. You and I talked about that in your office, and 

I believe that I—— 

Senator MCCAIN. Please, I have a short period of time. 

Mr. MULVANEY. Sure. 

Senator MCCAIN. It is a pretty simple question. Did you vote for 

the immediate withdrawal of U.S. troops from Afghanistan? 

Mr. MULVANEY. I believe that I did, sir, yes. 

Senator MCCAIN. In 2012, did you vote to withdraw two brigade 

combat teams from Europe? 

Mr. MULVANEY. That one I do not remember. 

Senator MCCAIN. I think I would remember if I wanted to withdraw troops from Europe. 

In 2013, did you vote to withdraw the 2nd Cavalry Regiment 

from Europe? 

Mr. MULVANEY. Again, I do not remember the specifics. I know 

that I have taken similar votes in the past, yes, sir. 

Senator MCCAIN. In 2011, did you offer an amendment to cut the 

defense top line by $17 billion? 
15 

Mr. MULVANEY. I believe that was an Overseas Contingency Operations (OCO) budget. I do not think it was the top-line defense 

appropriations bill. 

Senator MCCAIN. So you voted against OCO, so we are talking 

semantics here. Did you vote to cut $17 billion from our defense? 

Mr. MULVANEY. From the overseas contingency operation budget, 

yes, sir. 

Senator MCCAIN. I see. Did you offer an amendment in 2013 to 

cut the budget by $3.5 billion? 

Mr. MULVANEY. That I do not remember. 

Senator MCCAIN. Well, I will tell you, I would remember if I 

voted to cut our defenses the way that you did, Congressman. 

Maybe you do not take it with the seriousness that it deserves. 

I am not interested in playing semantic games with you. I am 

interested in what our military needs and whether they are receiving it. It is clear from your record that you have been an impediment to that for years. 

Do you believe we should repeal the Budget Control Act? 

Mr. MULVANEY. I believe that we should repeal it or replace it 

with something that is more efficient. Yes, sir. I voted against the 

Budget Control Act for just that reason. 

Senator MCCAIN. Do you believe that defense increases must be 

conditioned on offsets elsewhere? 

Mr. MULVANEY. I believe that we made a promise in 2011 as part 

of a debt ceiling increase to save money, and I am interested in 

keeping that promise. 

Senator MCCAIN. What is the highest priority—reducing the debt 

or rebuilding the military? 

Mr. MULVANEY. The number one priority of the United States 

Federal Government is to defend the Nation. 

Senator MCCAIN. It is nice to hear that you believe they are important because you have spent your entire congressional career 

pitting the debt against our military, and each time, at least for 

you, our military was less important. 

As OMB Director, you will be advising the President on ongoing 

budget matters. In your response to the Committee, you have stated that government shutdowns ‘‘always contain some element of 

good policy.’’ Will you be advising the President that a government 

shutdown or, as you—and maybe George Orwell—would like to call 

it, as you did in your responses to questions, ‘‘temporary lapse in 

appropriations’’ are an acceptable outcome during budget negotiations? 

Mr. MULVANEY. Actually, the term ‘‘temporary lapse in appropriation’’ is the term that the government used to describe that circumstance up until, I believe, 1994. 

Senator MCCAIN. That is what you believe it is? 

Mr. MULVANEY. To get to your direct point, I do not intend to be 

recommending to the President that we negotiate or govern by crisis. 

Senator MCCAIN. But you supported the government shutdowns? 

Mr. MULVANEY. I voted for an appropriations bill that the Senate 

failed to take up. I think in a system, Senator, where you have to 

have the approval of the House—— 
16 

Senator MCCAIN. Did you make statements in support of the 

shutdown during the shutdown? 

Mr. MULVANEY. I made statements in support of the House bill 

to keep the government open. 

Senator MCCAIN. Which you knew would not succeed because it 

was not going to pass the U.S. Senate. 

Mr. MULVANEY. I do not pretend to know, sir, what the Senate 

chooses to do. 

Senator MCCAIN. Will there be a corresponding increase in the 

defense base budget for every dollar of OCO, which you have opposed, transferred to the base? 

Mr. MULVANEY. I have proposed moving stuff from the OCO to 

the top-line defense budget because I think it is more transparent. 

Senator MCCAIN. So you believe there should be—the President 

has advocated increases in defense spending. Do you believe that 

that should be tied to decreases in spending in other areas of government? 

Mr. MULVANEY. I have voted regularly and hope to continue to 

advise the President that the best possible route forward is to raise 

the top-line defense number and have corresponding reductions in 

the non-defense discretionary. 

Senator MCCAIN. And if you are not able through Congress to reduce the spending, will you still support increases in defense 

spending? 

Mr. MULVANEY. I will make my case to the President. Again, I 

think he is looking for my perspective—— 

Senator MCCAIN. I am asking for your personal opinion before 

this Committee, not what you would advise the President. I want 

to know whether you would support an increase in defense spending without a commensurate cut in non-defense spending? 

Mr. MULVANEY. I would make the argument—again, I recognize 

what you are asking me, Senator, but you also asked me what I 

would do as an elected official, and that is not my job. My job is 

to make the case to the President, and I am trying to answer your 

question to the best of my ability, which is I would lay out to the 

President what the implications of doing that would be. 

Senator MCCAIN. Well, since it is obvious that you and your 

friends supported the shutdown—in fact, I remember it vividly—as 

a ‘‘temporary lapse in appropriations,’’ I would like you to maybe 

go to Arizona and tell the folks up around the Grand Canyon when 

we shut down the Grand Canyon and we had to fly food up to 

them, the concessions around the Grand Canyon. And I remember 

it very well, and I think it is a shameful chapter, and I think it 

is a reason why the people have such a low opinion of us and the 

work we do when we have ‘‘temporary lapses in appropriations,’’ as 

you described them. 

All I can say to you, sir, is that I am deeply concerned about your 

lack of support for our military, about your continued votes of withdrawals from Europe when we see a world on fire, withdrawing 

combat teams. What were you thinking, honestly, when you voted 

for an immediate withdrawal of all U.S. troops from Afghanistan? 

Help me out here. 
17 

Mr. MULVANEY. Senator, if you would give me the time, I will tell 

you the story, because it is a true story. With your indulgence, I 

had—— 

Senator MCCAIN. I have about 50 seconds. Go ahead. 

Mr. MULVANEY. I had a group of Vietnam veterans come into my 

office—a gentleman about 6-foot-5, long gray hair in a ponytail, 

leather vest—to come and talk to me about the Department of Veterans Affairs (VA) issues, which was appropriate at the time. At 

the end of the meeting, walking out in the parking lot, he pulled 

me aside. This giant mountain of a man pulled me aside and started crying and said, ‘‘Look, I have done thus and such for my country. My son has been overseas now four times in 5 years, and it 

is killing his family. You know South Carolina’’—— 

Senator MCCAIN. So the answer to that is withdraw all troops 

from Afghanistan? 

Mr. MULVANEY. I was doing the best—— 

Senator MCCAIN. Congressman, that is crazy. 

Mr. MULVANEY. I was doing the best I could to represent the people in South Carolina. 

Senator MCCAIN. Because one person came up—— 

Mr. MULVANEY. I was doing the best I can—— 

Senator MCCAIN. Because one person came up to you and was 

subject to the sacrifices that the men and women make, then you 

voted to withdraw all troops from Afghanistan? Don’t you know 

where September 11, 2001 (9/11) came from? 

Mr. MULVANEY. Senator, you know as well as any how pro-military South Carolina is, and I could tell you had the full support—— 

Senator MCCAIN. I can tell you that from—I know one thing 

about South Carolina. The majority of them do not support a vote 

in favor of withdrawing all troops from Afghanistan. I can tell you 

that. And I will take a poll anytime, that they do not want to— 

there is too much many sacrifices. That is where 9/11 began. I 

know of no reputable member of the military leadership that would 

say that because of that we should withdraw all troops from Afghanistan. 

My time has expired. 

Chairman JOHNSON. Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Thanks, Mr. Chairman. 

Mr. Mulvaney, welcome. It is good to see you. Thanks for stopping by and visiting with me yesterday. 

Mr. MULVANEY. Yes, sir. 

Senator CARPER. Do you recall when you met with President 

Trump and when he subsequently nominated you for this post? 

Mr. MULVANEY. Yes, sir. I met President Trump the first week 

in December, I believe. 

Senator CARPER. And do you recall the last time you met with 

him? 

Mr. MULVANEY. That is the only time I have met with the President personally. 

Senator CARPER. So since that time you have not met with him? 

Mr. MULVANEY. That is correct, sir. 
18 

Senator CARPER. All right. He has spoken, as I am sure you 

know, in favor of a number of steps or actions that are of interest 

to us, I think to us all. One, he has called for what I would describe 

almost as ‘‘massive tax cuts.’’ Some would suggest that they are 

largely to benefit people in upper-income levels. But that is one of 

the things. And he has also proposed raising defense spending by 

quite a bit. 

Medicare and Social Security, apparently he has said those were 

off limits and we are not going to touch those. 

I understand he has said and continues to say that we ought to 

build a wall. He says that the Mexicans will pay for it. I am not 

sure they are ready to do that. But the cost is anywhere from $15 

to $25 billion. 

He wants to repeal the Affordable Care Act (ACA), but the Committee for a Responsible Budget tells us that the cost of doing so 

in terms of our budget deficit is to increase it by anywhere from 

$150 to $350 billion. 

I think when Senator Cotton talked about you earlier when he 

introduced you, he said something about ‘‘speaking truth to power.’’ 

Somebody needs to speak the truth to our President about how you 

cannot do all those things and reduce our budget deficit. Are you 

that person? 

Mr. MULVANEY. I like to think so, yes, sir. In fact, I am looking 

forward to fulfilling that exact role. I see my role as telling the 

President the facts as I can determine them, giving him options as 

I see fit or as I figure out a way to present him with a range of 

options, and then to try to advise him to the best of my ability, and 

then to follow through on his policies once he establishes them. 

Senator CARPER. We had a couple of people who have been nominated by the President—one, General Kelly, and the other fellow’s 

nickname is ‘‘Mad Dog.’’ And they were asked if they were essentially asked by the President to do something that they felt was 

wrong, they gave him their advice, and they said, ‘‘I think that is 

wrong,’’ and it was not accepted, I believe they both said that they 

would step down just as a matter of principle. 

Let me ask a similar kind of question of you. If you present your 

best judgment to the President that he is literally going down the 

wrong track—and I mentioned some of the very expensive ideas 

that he has put forward. But if he chooses to ignore what you have 

recommended in terms of having a more balanced and responsible 

fiscal policy, what would you do? And that is not an easy question, 

but what would you do? 

Mr. MULVANEY. No, it is not an easy question, but it is not a particularly hard question. I do not think any of us expect—I know I 

do not—to have the President agree with me all of the time. And 

I do expect there will be circumstances where I make the best case 

for what I happen to believe on a particular issue, and that based 

upon other information or the advice of other counselors the President may make a decision that I would not have made myself, but 

I do not think that prompts one to leave the office. 

Senator CARPER. OK. Thank you. 

The last time we had a balanced budget—actually, we had four 

of them in a row, as you will recall—I think it was fiscal years 

1998 to 2001, the last four budgets of the Clinton Administration. 
19 

And those were also part of 8 years where we had the most jobs 

created in the history of the country in an 8-year period. 

During those 4 years when we had balanced budgets, revenues 

as a percentage of gross domestic product (GDP) were just about 

20 percent in each of those years, spending also about 20 percent 

for each of those years. Do you recall what last year revenues were 

as a percentage of GDP and spending as a percentage of GDP? 

Mr. MULVANEY. Ballpark, I think revenues were about 18.5 and 

spending was about 20 or 21. Twenty? 

Senator CARPER. All right. Do you believe that we need just to 

focus on the spending side, or is there some reasonable balance 

where, as they found in the 4 years of the Clinton Administration 

when we actually had four balanced budgets in a row, that there 

is some need for revenues? I shared a story with you yesterday 

from a town hall meeting where a lady at one of my town hall 

meetings when I was a Congressman, she said to me, ‘‘I do not 

mind paying extra taxes. I just do not want you to waste my 

money.’’ But is there a role for both spending and smarter spending 

and revenues? 

Mr. MULVANEY. I think the lady that you reference probably represents a lot of the American public. They do not mind paying their 

taxes as long as they do not think we are wasting it. 

Senator CARPER. OK. 

Mr. MULVANEY. I think the difference between it, Senator, would 

be when some of us talk about looking at the revenue side, they 

talk about looking at the pie as its current size and taking a bigger 

slice of it; whereas, I look at the revenue side looking at a bigger 

pie but taking a smaller slice. 

Senator CARPER. The regulatory process has been mentioned. 

Earlier we had something—I think the name of the law under 

which we develop regulations is the Administrative Procedures Act 

(APA), if I am not mistaken. 

Mr. MULVANEY. Part of it is. 

Senator CARPER. And it calls for, when a Federal agency is interested in thinking about promulgating regulation, they put out a notice and say, ‘‘We are thinking about promulgating a regulation in 

a particular area.’’ Then folks who are interested in that, business 

groups or others who are interested in that, individuals, those of 

us who are interested in it as legislators, we can make some comments and say, ‘‘Well, that is a good idea. You do need to do something.’’ Or, ‘‘That is a crazy idea.’’ And the agency can then act on 

that or choose not to. They can do nothing, or they can actually 

propose draft regulations. They are generally taking comments 

throughout the drafting period of time, and ultimately, when they 

finish their drafting, eventually they may or may not promulgate 

a final regulation. 

But between the time they promulgate the draft until they promulgate the final regulation, we again have the opportunity to 

weigh in, all of us, if we want to, and to say that we think that 

is a good idea or not. 

At the end of the day, if they promulgate something that we 

think is crazy, people can sue, and they do all the time, as you 

know. 

What is wrong with that process? 
20 

Mr. MULVANEY. The first thing that comes to mind, Senator, with 

the process is the role of the cost-benefit analysis that is done as 

part of that process and to the type of data that is used. Sometimes 

I think we use extraordinarily good data; other times I think you 

could raise a question as to whether or not the data is defensible. 

And I think that we could probably do a good job, and I hope at 

OMB, which has a role in that process as you just laid out, one of 

the things I hope to be able to do, should I be confirmed, is to make 

sure that we are using data not just from one source but from a 

variety of sources so we can try and get the best information we 

possibly can. 

Senator CARPER. In conclusion, I would just say that one of the 

things you said is we can turn this economy around. Well, that is 

what happened 8 years ago, and over the last 8 years we have 

turned the economy around. You remember where we were 8 years 

ago, and we are just coming off the end of the longest, continuously 

running economic expansion in the history of the country, 16 million new jobs have been created, and we are covering a lot of people 

for health care. We can do better than that. But I remember where 

we were 8 years ago, and I know where we are today as we shift 

the baton to a new leadership team. I would be careful about turning it around because I remember what it was 8 years ago. 

Thank you. 

Mr. MULVANEY. Thank you, sir. 

Chairman JOHNSON. Thank you, Senator Carper. 

I am going to use a minute of my time here just to lay out a couple facts on economic growth. Since the Great Depression, the economy has grown about 3.2 percent on average. Since the Great Recession, it has grown about 2 percent. That is a tremendous difference. If you go from 2 to 3 percent growth, that is $14 trillion 

of added economic activity just in a 10-year period; 2 to 4 percent 

is $29 trillion. Even with the 2-percent growth we have had since 

2009, revenue has increased to the Federal Government by $1.1 

trillion. So that is why I think regulatory reform, having a competitive tax system, using energy resources is just crucial. 

The other point I want to make is we have heard now a couple 

times talking about the government shutdown. I just want to quick 

ask Congressman Mulvaney, do you have a handle on how much 

the government actually shut down? I know they shut down the 

painful parts, like, concessions at the Grand Canyon. But do you 

have any sense of that? I cannot get a real figure on it, but I—— 

Mr. MULVANEY. It depends on how you want to measure it. The 

number that I have used is that about 15 percent of the government shut down. I think that number has been confirmed, if you 

look at it in terms of the amount of dollars that still flowed out the 

door. 

Chairman JOHNSON. OK. Thank you. Senator Paul. 

OPENING STATEMENT OF SENATOR PAUL 

Senator PAUL. Congratulations, Congressman Mulvaney, on your 

nomination. You said in your testimony that the number one priority, either yours or of the Federal Government, is to defend the 

country. Is that correct? 
21 

Mr. MULVANEY. I think it is one of the few things that are actually affirmatively stated in the Constitution. 

Senator PAUL. Admiral Michael Mullen is a career military guy. 

Nobody would question his honor or whether he served honorably. 

Are you familiar with his statement when he said that the greatest 

risk to our national security is our debt? 

Mr. MULVANEY. It was raised at my very first Budget Committee 

hearing in 2011, and it put the fear of God in me as soon as I got 

to Washington, D.C. 

Senator PAUL. Do you think it is fair, people can characterize you 

or your positions in any way, but do you think it is fair maybe to 

characterize your concern for debt as being also a concern for national defense, that maybe we cannot be a strong Nation if we are 

indebted or if we borrow $1 million a minute, maybe we will not 

be able to afford, and there might be a day that there is a calamitous economic crisis concerning our debt and that would make us 

vulnerable to invasion? 

Mr. MULVANEY. I think history would teach us—and I think perhaps Admiral Mullen was considering this—that great nations 

throughout history have traditionally failed from within, they have 

rotted from within because of their inability to manage their finances. 

Senator PAUL. I think sometimes in partisan politics people tend 

to question the motives of their opponents, and I think that is a 

mistake. We have many disagreements, Republican and Democrat, 

on how we fix things. Even among our own party we have some 

disagreement on how to fix things. But, I think that understanding 

that your motives are for your country, for defending the country, 

and that your concern over the debt is not over numbers but over 

a concern for the future of your country. 

When we talked about raising the debt ceiling—and much has 

been made about, oh, you are advocating for shutdown. I remember 

those debates. I had just gotten here, and I think you had just gotten here. And the debates in 2011 were not over advocates for shutdown. They were over whether or not we should reform the process 

at the same time we raise the debt ceiling. So there was a bill at 

that time that I believe you supported, Cut, Cap, and Balance, and 

this was a bill that said basically we will agree to raise the debt 

ceiling. It is going to have to go up at some time. But when we had 

this big, calamitous debate, we should try to fix things instead of 

doing the same-old, same-old. 

Some of the discussion has been over waste. I am all for getting 

rid of waste and fraud. You know why it has been here forever? I 

remember as a kid in high school seeing the Golden Fleece report. 

Senator William Proxmire would talk about this waste. The reason 

it is here is we do not do our job. Our job is to pass the individual 

appropriations bill. And what do we do? We lump them all together 

in one enormous bill called a ‘‘continuing resolution (CR),’’ which 

I am sure you voted against a few, as I have, because we do not 

fix the problem. But it does not mean we are against all the spending in government. We want to fix the problems, do our job, pass 

the individual appropriations bills. 

But I think the thing is that it is a mischaracterization, I think, 

of your position and many conservatives that we are for shutting 
22 

the government down. No, we are for not keeping it open without 

reforming it. We want to reform it. And when we have these debates and we come to a head, should it be easy to raise the debt 

ceiling? Some on the other side want to have the debt ceiling just 

go up automatically. In fact, the last time we raised the debt ceiling, they raised it without a dollar amount. They just said, oh, let 

it go up as much as it can for a year and a half. 

With regard to entitlements, I saw the care and, I believe, the 

emotion in your voice about taking care of your mother-in-law and 

stuff. What are your motives? Are your goals to try to preserve Social Security and preserve Medicare? Are your motives to destroy 

the entitlements? What are your motives? 

Mr. MULVANEY. I think I have said many times that the real risk 

we run is doing nothing, and by doing nothing, we will ruin those 

programs. We will make sure that when you and I retire there will 

be a 22-percent across-the-board reduction. 

Senator PAUL. And these statistics are coming from the Social 

Security trustees saying that this is going to happen. Within about 

a decade or so, we would have a massive across-the-board cut. 

And so, really, the debate should not be, oh, these people do not 

care about the elderly. We all have parents, we all have grandparents. We all care about the elderly. It is about how we fix it. 

But I think what is really inexcusable are those who berate one 

side and say, oh, you do not care, when in reality I think doing 

nothing shows a lack of caring. If you do nothing to fix Medicare, 

if you do nothing to fix Social Security—and, sure, we can attach 

emotions to this and attach false motives, but I think we should 

listen to what our candidates say, listen to what the electorate 

said, and really try to judge people on whether or not you think 

they are honest and sincere. 

He went above and beyond the law to pay taxes on something 

that was well beyond what the law would have said. He did it because he was honest in answering his questionnaire. 

So I wish you the best of luck in your position. I hope people on 

the other side will not question your motives, will look at that it 

is a sincerely held belief that the debt is hurting the country, that 

the debt hurts our national defense; that if you could expand national defense and not add to the debt, that should be a commendable position, not something that we should denigrate. 

So I wish you the best of luck going forward, and I think there 

needs to be a balance of concern for debt and expenditure. And I 

thank you for your service. 

Mr. MULVANEY. Thank you, Senator. 

Chairman JOHNSON. Thank you, Senator Paul. Senator Tester. 

OPENING STATEMENT OF SENATOR TESTER 

Senator TESTER. Thank you, Mr. Chairman, Ranking Member, 

for this hearing. And thank you for being here, Congressman 

Mulvaney. I am going to call you ‘‘Mick,’’ if that is OK. 

We had a good meeting in my office, and I appreciate you coming 

in. There is an issue that came up, and I am sorry I was not here 

for the opening statement because I understand that you did talk 

about it some. But it deals with the nanny. 

Mr. MULVANEY. Sure. 
23 

Senator TESTER. How many hours a week did she work for you? 

Mr. MULVANEY. She was with us roughly full-time. 

Senator TESTER. OK, so 40 hours a week. And then for how long? 

Mr. MULVANEY. Up until the time the kids left for school. 

Senator TESTER. So how many years was that? 

Mr. MULVANEY. We could not remember if it was three or four, 

so we filed for five. 

Senator TESTER. All right. Well, OK, sounds good. So there were 

3 or 4 years that you paid back taxes on her? 

Mr. MULVANEY. No, we paid back taxes on all five. 

Senator TESTER. OK. All right. Sounds good. Thank you. 

The President announced a hiring freeze today. There was some 

question on who it applied to. I just came out of a VA hearing, and 

it applies to the entirety of the VA, is what I was told. I am sure 

you are familiar with the VA and its job. Do you believe its mission 

is for the VA to provide timely care to the folks who serve this 

country? 

Mr. MULVANEY. I do, yes, sir. 

Senator TESTER. Do you believe that the veterans of this country 

are having trouble accessing care? 

Mr. MULVANEY. I have seen it firsthand. I know it to be the case. 

Senator TESTER. All right. 

Mr. MULVANEY. By the way, Senator, the story I hear from my 

veterans is that the quality of care they get is actually excellent, 

once they get it. 

Senator TESTER. You hear the same story I hear. 

Mr. MULVANEY. It is just difficult getting it. 

Senator TESTER. To get through the door. And so I would assume, with your answer to the previous two, that you would agree 

that there is a medical workforce shortage within the VA? You do 

not have to. Do not let me put words in—— 

Mr. MULVANEY. That I do not have any information on. 

Senator TESTER. OK. USA Today reported 41,500 medical professional vacancies within the VA. 

So the question becomes—and you are in a very important position that nobody knows about on the street. The question becomes: 

How do we address the backlog in the VA with this hiring freeze? 

Yes, go ahead. 

Mr. MULVANEY. Well, a couple of different things, Senator, off 

the top of my head. I am having a difficult time automatically coming to the conclusion that the best way to make the VA more efficient is to hire more people. I would certainly be willing to consider, as I think I filled out either the questionnaire for this Committee or another Committee, that there may be circumstances 

where you can actually provide a more cost-effective and efficient 

government by adding people in certain areas. That might be limited examples, but they could certainly exist. But I would be more 

than willing to work with you and your office on trying to figure 

out a way to do that because I am just as interested as you are 

in taking care of our vets. 

Senator TESTER. Let me give you an example. In eastern Montana, east of Billings, it is about 200 miles to the North Dakota 

border, and at the last check, there might be two or three psychologists, psychiatrists, family counselors in that region. How do we ad-
24 

dress mental health issues, post-traumatic stress disorder (PTSD), 

traumatic brain injury (TBI) if we do not hire additional folks? 

Mr. MULVANEY. I think the Veterans Choice Act that Senator 

McCain worked so hard on was part of addressing that, allowing 

them to access the private system, especially in circumstances—— 

Senator TESTER. But those three I am talking about are not people within the VA. That is the private sector and the works. 

Mr. MULVANEY. Oh, I got you. I have not been to Montana. That 

sounds like it is a pretty sparsely populated area. 

Senator TESTER. Well, the problem is we have a ton of veterans 

that live there because it is sparsely populated, and they still need 

to get the benefits. 

I look forward to working with you on these issues. I think they 

are critically important. And oftentimes I agree with you that manpower does not necessarily result in good results. But when you 

have the kind of backlog they have in the VA, manpower does have 

its impacts. 

I want to talk about Medicaid block grants for a second. Do you 

support turning Medicaid into a block grant program? 

Mr. MULVANEY. I have voted for that when given the chance in 

the House. As I have told many Members of this Committee and 

other committees, if there are other ways to find efficiencies and 

savings in Medicaid, I am more than willing to talk about that. I 

think that Medicaid and Medicare probably present bigger challenges to us in terms of their complexity. 

Senator TESTER. So with that previous support for Medicaid 

block grants, would you also support a cap on Medicaid block 

grants? 

Mr. MULVANEY. I believe that was part of the proposal that the 

House made in order to give the States the incentive necessary to 

reform and drive some efficiencies in their programs. 

Senator TESTER. In your previous life—and excuse me for not 

knowing this. I came out of the State legislature. 

Mr. MULVANEY. So did I. 

Senator TESTER. And I can tell you that in Montana the State 

is not exactly flush with dough, and they do have that balanced 

budget amendment that you talked about with the previous Senator. They are not going to be able to absorb, so is their option 

going to be to cut benefits or kick folks off? 

Mr. MULVANEY. Well, I do not know what the options are. You 

would like to think—— 

Senator TESTER. If they do not have the dough, what other options do they have? 

Mr. MULVANEY. Well, this is my experience in the South Carolina 

Legislature. I remember we had a program come down, and it was 

very clear that the program for Medicaid—we were required to use 

it—was aimed toward providing Medicaid care in urban areas. We 

do not have very many of those in South Carolina, and we would 

have very much liked to have come up with our own plan to provide for our most needy because we wanted to do that, despite 

what people said, to Senator Paul’s point. We want to provide for 

those folks as well, but we thought there was a better way to do 

it given the locale of South Carolina. But we did not have that 

flexibility because of the Federal law. 
25 

Senator TESTER. I got you. The problem that I see—and enlighten me if I am looking at this wrong—is, populated areas differ 

on the size of the State. We have two cities of 100,000 people. 

Those are big cities for Montana. We have a lot of other cities that 

are less than 50,000 and a lot of them less than 1,000. And in all 

three of those cases, there are tons of folks that are on Medicaid, 

and my concern is that whether they are in a rural frontier or what 

we would call ‘‘bigger cities,’’ we have folks that are depending on 

it, that if it is block-granted in and the State cannot make up the 

difference, they are going to be without care. 

Mr. MULVANEY. Senator, again, it sounds like we have some of 

the same experiences, and if there are other ideas on how to fix 

Medicaid, I would be more than happy to do it. I would like to give 

the States the flexibility to try. It might be that Montana and 

South Carolina do not solve them, but if Wyoming does, maybe it 

provides a model that other States could follow. 

Senator TESTER. Yes, I mean, I guess my concern is in the meantime, there are a lot of folks that are going to be really in life-anddeath situations. That is my concern. 

Real quickly, and I will put this in for the record, but it deals 

with the National Background Investigation Bureau (NBIB). We 

stood that up last year, I believe, for background checks. You are 

a critical component in bringing the Director of National Intelligence (DNI) and the Office of Personnel Management (OPM) and 

Department of Defense (DOD) together to make sure these work, 

and they were brought about because we were failing miserably on 

our background checks. And I look forward to working, upon confirmation, with you on that. 

Thank you, Mr. Chairman. Oh, by the way, just for a side remark, in 2008 we were losing 800,000 jobs a month, and today, for 

the past year, we gained about 220,000 jobs a month. So I guess 

it depends upon the metric. Thank you very much. 

Chairman JOHNSON. Senator Lankford. 

OPENING STATEMENT OF SENATOR LANKFORD 

Senator LANKFORD. Thank you, Mr. Chairman. 

Congressman Mulvaney, good to see you again. 

Mr. MULVANEY. Senator. 

Senator LANKFORD. You and I came in the same class, in 2011. 

We got to now each other from orientation on and had the opportunity to be able to serve together in the House for 4 years. 

I do have to tell you I was very pleased when I saw the announcement from the Trump Administration of your selection because of what I saw from you in our time serving together in the 

House. You were a serious student. You looked hard at difficult 

issues, understood there were difficult decisions that needed to be 

made, and made proposals to do that. 

You have a fairly decent business background as well and working with businesses before that, in addition to Georgetown University, graduating with honors in international economics, commerce, 

finance as an honors scholar, law school in North Carolina, Chapel 

Hill, and then Harvard Business School. That is not a bad background to be able to walk into this type of role. 
26 

But as you know, every person that enters into the Administration is on the job, and it is on-the-job training. It is an entirely different role. So I would like to get some background from you just 

on some key philosophical perspectives that you and I have talked 

about some as well, when we talk about regulatory issues and regulatory priorities and how we can fix the regulatory State. Senator 

Carper brought it up earlier. I can assure you Senator Heitkamp 

and I would bring it up to you often as we work together on regulatory reform. 

What do you see as key aspects of regulatory reform? 

Mr. MULVANEY. I think a couple of different things, Senator. I 

think it offers us perhaps the best opportunity to have an immediate impact on getting the economy ramped up even further. 

There seems to be, in talking with all the folks on this Committee 

and the other Committee, a good bit of bipartisan support in this 

House—or in this chamber for regulatory reform, and I have seen 

some really good academic data that would suggest that the number one thing we could do to boost GDP, to boost economic activity, 

would be to engage in significant regulatory reform. 

We also have the advantage of being able to do it rather quickly, 

not only because there is some bipartisan support for it, but there 

are certain things the President can do by himself in a perfectly 

legitimate exercise of his Executive authority. 

So the general idea is that regulatory reform offers us probably 

the best option right now to help get the economy doing even better. 

Senator LANKFORD. So the grand challenge of this is I could find 

50-plus of my colleagues easily in regulatory reform for President 

Obama. Now I am going to work with a Republican Administration, 

and I still have the same perspective. We need to do regulatory reform. We need to be able to fix the process of how regulations are 

done. And I think there will be a greater eagerness from my Democratic colleagues to say, yes, this is a great time to reform the process of regulations. For Senator Heitkamp and I, as we walk 

through this, we are looking for a partner in the Administration 

that is not just looking at what controls now but looks toward the 

future and says for every President and how we do regulations, 

there should be a predictable, reliable system of that. 

Mr. MULVANEY. Something broke down, Senator. When I meet 

with a Domino’s Pizza or a Papa John’s pizza franchisee—I used 

to be in a franchise business—and they lay out for me that if they 

followed the regulations regarding disclosures on caloric intake on 

their product, the boards that you see when you walk into a restaurant would be the size of football fields in order to follow the 

law. When that happens, then something has broken down in the 

process. 

Now, granted, we did fix that one, but the simple fact that that 

got beyond all of the process and actually made it into the real 

world before someone caught that means that we do have a regulatory process problem that I will look forward to helping you work 

on. 

Senator LANKFORD. You brought up earlier one of the major key 

reforms would be the cost-benefit analysis. I had mentioned to you 

when we visited in the office that my fear is that the cost-benefit 
27 

analysis from any Administration has become a justification because there is a way to be able to find a benefit large enough to 

be able to say no matter what the cost is on you, I found a benefit 

large enough that you are going to do this, rather than looking for 

what is the least expensive, most effective option that is out there. 

What are some ideas that you have on the cost-benefit side of 

things to be able to help reform that process? 

Mr. MULVANEY. As I sit here and I contemplate what it would 

be like at the OMB should you all confirm me, it would be to go 

to the President and say, look, here is data, here is real hard data. 

It may be from this source; it may be from that source; it may be 

from a variety of sources. In fact, I think we can do a better job 

of getting information from a variety of sources as we drive these 

cost-benefit analyses. And then explain to the President what the 

real-world implication of these regulations would be, not in a justification standpoint, not in terms of shoe-horning a regulation that 

we say we want into—a square peg into a round hole, so to speak, 

but to actually look at the facts and the circumstances of these regulations. And the President to say, you know what, that one makes 

sense and those four do not. 

One of the things I am very excited about coming in with this 

Administration is that everything the President has talked about 

on the campaign trail has included regulatory reform. He has I 

think, in his second day full-time in office, today or yesterday, he 

talked about regulatory reform. He made a very high profile hiring 

of Carl Icahn to help deal with regulatory reform. You read his 

books, and you will actually see chapters about how government 

regulation is an impediment to growth. 

So say what you want to about the President, he has his critics 

and his supporters, but I am absolutely convinced that his dedication to fixing the regulatory requirement will work hand in hand 

with yours. 

Senator LANKFORD. OK. We will work through that process in 

the days ahead. Obviously, as we work through budget issues—it 

has been a major part of what you worked on in the House as 

well—one of the hardest things to get in Washington, D.C., is the 

real number for anything. How can you help us get the real number coming from the White House and coming from your estimates 

from OMB? 

Mr. MULVANEY. Well, the first step, obviously, is to get them myself, right? Which is why the Digital Accountability and Transparency Act of 2014 (DATA) is so important. It is behind schedule, 

as I understand, as we try and figure out a way to get data that 

we can actually all use. In this age of big data, the government has 

all of this data, but it is incapable of using it because it cannot 

even talk to itself about the numbers. 

So, of course, one of the keys is to try and figure out a way to 

fix the system so that the data that we all have access to is the 

best possible number, and then simply be honest about those numbers with the President and say, look, Mr. President, this is a hard 

number, this is real. And if we do this, then that will happen; if 

we do that, then this will happen. And to try and give him the best 

possible advice I have and the best possible data that I have. But 

the first is trying to figure out a way to allow the government to 
28 

function properly so that every single one of us in decisionmaking 

position has good information. 

Senator LANKFORD. Well, I would hope to get that. I would hope 

that we could also work together on all the budget gimmicks that 

are out there, whether we change the mandatory programs, whether it be multiple other entities that are out there in the budget system that gives us fake numbers rather than real numbers, that we 

can help agree on a set of numbers. 

I would tell you as well Senator McCaskill and I have worked for 

the past couple of years on something called the ‘‘Taxpayer’s Right 

to Know.’’ We worked extensively with the previous OMB to be able 

to negotiate a process so that we can deal with duplication and exposing that. I would anticipate that she and I would come back to 

you pretty quickly as well to be able to help finalize this with you 

as OMB Director so we can deal with the duplication in government. We cannot deal with duplication if you cannot see it, and it 

is something she and I have worked extensively on, and we hope 

that we can get this finished in the days ahead. 

With that, thank you, Mr. Chairman. 

Mr. MULVANEY. Thank you, Senator. 

Chairman JOHNSON. Senator Peters. 

OPENING STATEMENT OF SENATOR PETERS 

Senator PETERS. Thank you, Mr. Chairman. And, Mr. Mulvaney, 

thank you for being here—and congratulations on your nomination—and taking our questions here today. 

You mentioned you have a fair amount of business experience. 

You had a franchise? 

Mr. MULVANEY. I did, yes, sir. 

Senator PETERS. What sort of franchise? 

Mr. MULVANEY. We were in the fast, fresh Mexican business. I 

was a franchisor and a franchisee. 

Senator PETERS. OK. And you ran a law firm as well? 

Mr. MULVANEY. I have done that as well. I get bored easily, yes, 

sir. 

Senator PETERS. Well, a lot of activities on your plate. 

Well, I know you mentioned the issue of your nanny and how you 

dealt with the payment of back taxes, and I believe from a question 

earlier that she was employed by you for about 4 years or so. Is 

that correct? 

Mr. MULVANEY. Yes, sir. 

Senator PETERS. And I believe you also said that she worked 40 

hours a week? 

Mr. MULVANEY. Roughly, yes, sir. 

Senator PETERS. A full work week, then. 

Mr. MULVANEY. Yes, sir. 

Senator PETERS. How much did she make? 

Mr. MULVANEY. $400 a week. 

Senator PETERS. About $400 a week. 

Mr. MULVANEY. That was our recollection, that the last payments were $400 per week, yes. 

Senator PETERS. OK. So at the same time that you employed 

your nanny, you were then running the law firm. Is that accurate? 
29 

Mr. MULVANEY. No, sir. I am trying to think. I transitioned from 

running the law firm to working for the family real estate business 

about that same time. 

Senator PETERS. So you were involved in another business at 

that time? 

Mr. MULVANEY. Yes, sir. 

Senator PETERS. And you had employees at that time as well? 

Mr. MULVANEY. I did. Yes, sir. 

Senator PETERS. And how many hours a week did those employees work? 

Mr. MULVANEY. They worked full-time. Sometimes that would be 

40; sometimes that would be more. 

Senator PETERS. So they were working the same number of hours 

as your nanny basically? 

Mr. MULVANEY. From time to time, yes, sir. 

Senator PETERS. And did you pay employment taxes for each of 

these employees? 

Mr. MULVANEY. Yes, we did. Yes, sir. 

Senator PETERS. And did you collect and retain I–9s for all of the 

employees that worked in those firms? 

Mr. MULVANEY. I would imagine that we probably did. Yes, sir. 

Senator PETERS. So I guess what I am failing to see here is: 

What is the difference between your nanny, who clearly was working full-time, as you mentioned, over 40 hours, and the employees 

that worked at the law firm or all of these other firms? What was 

the difference there? 

Mr. MULVANEY. It is a fair question, sir, and it is easy now in 

hindsight to look back and say that I was wrong, and we fully 

admit that. I think at the time there was simply a differentiation 

in my mind between someone who came into my house to help with 

the children and the folks who worked at the law firm, worked at 

the restaurant, or worked at the real estate company. 

Senator PETERS. So what is the difference? Is the value of the 

work different? 

Mr. MULVANEY. No, sir. Again, we never considered that a babysitter would fall into that category. I fully admit that—I wish now 

that I had seen the IRS circular at the time, but I did not and was 

not aware of this until December, recognize that I should have 

done it differently, would have done it differently if I had known. 

But again, I have done everything that I know to do to make it 

right. 

Senator PETERS. So you did not consider an employee a household employee. What would you define a household employee—how 

would you define one that you would have paid? You are an experienced business person. You are not someone who has never had a 

deal with collecting taxes and dealing with I–9s. You had to—— 

Mr. MULVANEY. And the reason we did not—— 

Senator PETERS [continuing]. Deal with those regulations that 

you want to eliminate. 

Mr. MULVANEY. True, and I guess the reason that we did not 

consider her a nanny was for some of the reasons I mentioned: she 

did not live with us, and my impression of a nanny is someone who 

stays over; did not do any housekeeping, cleaning. She simply 

helped Pam with the children. We considered here a babysitter. 
30 

Senator PETERS. So simply taking care of your children really is 

not something you thought was that valuable or really an employee. 

Mr. MULVANEY. Oh, no, sir. It was very valuable. I just did not 

think it fell into what the IRS clearly does, in fact, consider to be 

a household employee. 

Senator PETERS. OK. Well, I would like to take a look at some 

of the work that you did in the Congress. In my understanding, you 

were very involved in the Republican Study Committee, a leader in 

that committee. 

Mr. MULVANEY. I was active in it the first two terms, yes, sir. 

I have been a member all three, but was not very active the last 

2 years. 

Senator PETERS. OK. Fair enough. So I think it is important, as 

the OMB Director, you are going to have the President’s ear. You 

are going to be talking about things that you believe that he should 

be doing. He obviously nominated you because he wants to hear 

your advice. He believes that that is good advice and things that 

he will very likely follow, I would expect, or you probably would not 

have taken this job if you did not think you would have the opportunity to have his ear and hopefully be able to convince him. 

So I want to look at the budgets that you have voted for because 

I think the American people should just have an understanding—— 

Mr. MULVANEY. Sure. 

Senator PETERS [continuing]. As you are looking at how we deal 

with the fiscal situation in the country as to what these cuts really 

mean. And I think you may have mentioned this at a previous 

hearing, but you voted in the House to raise the Social Security full 

retirement age to 70. So you believe it should be 70 years old as 

the retirement age? 

Mr. MULVANEY. I did. We did that as—and, again, I have had a 

chance to talk about this at the other Committee and again with 

several members in terms of how to fix the ideas available to fix 

Social Security, the five levers, one of them being—— 

Senator PETERS. So 70 is where you would like to see it, 70 as 

the retirement age? 

Mr. MULVANEY. Given the fact that people live longer, I do not 

think that is inappropriate. I think my children would have enough 

time to adjust. I am not requiring anybody or would not ever think 

to ask anybody who is 65 now to change to 70, but my 17-year-old 

triplets, I have already told them that I do not expect to be able 

to have them retire at 67, and they should make plans now—— 

Senator PETERS. So you are saying not at 65, but if I look at the 

legislation, those who are age 60 and under would now have to 

start to move up toward 70? Is that what you are saying? 

Mr. MULVANEY. Correct. The proposal—— 

Senator PETERS. If you are 60 years old or under, under your 

plan, plan to wait until 70 for full retirement? 

Mr. MULVANEY. I think it was 59 is where we started, Senator, 

and we have done this a couple times, so I apologize if I do not 

have the exact details, because they may have changed slightly 

from year to year. But one of the proposals was that if you were 
31 

59 years old, instead of retiring at 67, you might retire at 67 plus 

2 months. 

Senator PETERS. And the same for Medicare, the eligibility would 

be 67. You would raise it to 67? That is what you will be advising 

the President to do? 

Mr. MULVANEY. Well, there is two different—you did not ask me 

that question the first time. 

Senator PETERS. No. This is Medicare now. I apologize. So Medicare. 

Mr. MULVANEY. You asked me what I voted for. When I come to 

advise the President, my intention, if you all give me the chance 

to do so, is to lay out a list of options for the President, say, ‘‘Mr. 

President, if you want to balance the budget in X number of years, 

here is what you would have to do. If you want to balance it in this 

many years, this is what you would have to do.’’ So I see my job 

at OMB as giving the President a many viable options as possible 

and as good information as possible. I am sorry. I thought you 

asked me about things that I had voted for. 

Senator PETERS. That is true. 

Mr. MULVANEY. The roles are different. 

Senator PETERS. I did. But I assume when you vote for something, it is something that you believe should be the law of the 

land. 

Mr. MULVANEY. It is. 

Senator PETERS. You went back to tell your constituents, ‘‘This 

is how I voted.’’ It was not, ‘‘I just did this for the heck of it, and 

I have a variety of other ideas.’’ 

Mr. MULVANEY. No, absolutely, Senator. I am not trying to 

avoid—I voted for those things, and it gets that seal of approval 

that goes with the vote. But when you are in the policymaking and 

advising position to the President, I do think you get a chance to 

lay out more options. As you know, sometimes we do not get to 

choose what we vote for. We can either vote it up or vote it down. 

And by the time it comes before us, all of that work has already 

happened. I am looking forward to being involved earlier in the 

process to be able to lay out the options for the President. 

Senator PETERS. Very good. I think I am out of time. Thank you. 

Chairman JOHNSON. Thank you, Senator Peters. 

Again, just to reinforce, I will take another minute. Over the 

next 30 years, according to the Social Security trustees, Social Security will pay out about $14 trillion more in benefits than it brings 

in in payroll tax. And I think, Congressman, you testified that if 

we do nothing, when the accounting convention of the trust fund 

with the U.S. Government bonds being brought to the Treasury for 

reimbursement, when that accounting convention runs out, according to law, Social Security benefits will be reduced by 22 percent 

if we do nothing. 

Mr. MULVANEY. That is the current number that I have seen 

from the CBO, yes, sir. 

Chairman JOHNSON. So your attempts in terms of voting—I 

would say courageous votes because people get attacked for trying 

to solve these problems—was just that: you are addressing that reality, a $14 trillion shortfall over the next 30 years, so that hope-
32 

1The chart referenced by Senator Daines appears in the Appendix on page 254. 

fully you do not have a 22-percent cut in benefits somewhere in the 

2030 timeframe. 

Mr. MULVANEY. We have to do something. 

Chairman JOHNSON. OK. Senator Daines. 

OPENING STATEMENT OF SENATOR DAINES 

Senator DAINES. Thank you, Mr. Chairman. And I want to congratulate you on your nomination, Congressman Mulvaney. It was 

an honor to serve with you in the U.S. House as well. I share Senator Lankford’s comments as well on the respect that you had in 

the House. I am grateful that your wife, Pamela, and one of the 

triplets, James, is here today as well. I am the father of four children, and I think sometimes up here in this job we lose sight of 

the forest because the trees get in the way. 

You said in the first question on your questionnaire, it says, ‘‘Did 

the President-elect give you any specific reasons why he nominated 

you to be the next Director of the Office of Management and Budget?’’ And you answered it: ‘‘When President-elect Trump announced 

my nomination, he noted that our Nation is nearly $20 trillion in 

debt.’’ 

If you stop by my office in Hart 320, you will see the debt clock. 

Every Montanan that walks into my office sees that. Every person 

who walks into my office sees that. 

I think what Senator Johnson pointed out earlier is this chart1

that shows what is going to happen here in our debt. We are going 

to add $10 trillion to our debt over the course of the next 10 years, 

and then the 10 years following that, we are going to add another 

$28 trillion. That is $60 trillion all in between now and the year 

2035 of debt. That is staggering when we think about it. 

And as Senator Paul mentioned—in fact, I met Admiral Mullen’s 

son this weekend—Admiral Mullen who was the Chairman of the 

Joint Chief of Staff, did say the most significant threat to our Nation—and I went back and Googled it. He doubled down, he tripled 

down on his statement. He said, ‘‘The most significant threat to our 

national security is our debt,’’ coming from the former Chairman 

of the Joint Chiefs of Staff. 

We spoke in my office, Congressman, in great detail. I know you 

know the importance of balancing a budget. But unlike hardworking families in this country, Congress is not required to pass 

a balanced budget. In my home State of Montana, our legislature 

is meeting as we speak. I did not serve in the legislature. I was 

28 years in the private sector. I know when I am in the private sector, I had to produce a budget that not only balanced but revenues 

need to exceed expenses. That is called profit. But in my State of 

Montana, it is constitutionally required that the State balance its 

budget. 

But year after year up here in Washington, D.C., we continue to 

leverage the future of our children, James’ future, your triplets’ future, with an unsustainable fiscal path. And there will be a day 

when the piper is going to have to be paid. That is why for the 

third Congress in a row I have introduced a simple bill—it is very 

simple. It simply states this: ‘‘If Members of Congress cannot pass 
33 

a balanced budget, then they should not get paid.’’ We need to put 

the pain back on the Members of Congress. It is the way it works 

when you are in business. It is the way it works in the real world. 

It does not work that way up here. 

Congressman, I know we spoke about my bill, and that was referred to this very Committee, in fact. Do you support my bill? 

Mr. MULVANEY. I do, Senator. Thank you for the question. I want 

to make one thing perfectly clear, is that, if I am confirmed, I will 

no longer be a voting member of the legislature. So if I may, I 

would couch it in different terms, which is that if your bill were 

to become law and it comes down to OMB, as all bills do—they go 

to OMB for review before presentation to the President—I would 

give the President the unqualified recommendation that he sign 

that into law. 

Senator DAINES. And you will be presenting the budgets here to 

the Hill once you are confirmed. What are your views of ensuring 

that that budget balances over a 10-year period? 

Mr. MULVANEY. My hope, if I am confirmed, is to get to work 

very quickly because we owe you a budget by the end of February. 

I recognize that deadline sometimes moves during a transition 

year, but there is work to be done immediately. And what I hope 

to be able to do is to go to the President with a range of options 

and say, ‘‘Mr. President, here is one that balances in a year; here 

is one that balances in 8; here is one that balances in 15,’’ and to 

explain to him what it would take to accomplish that and what it 

would mean to choose one over another. 

You and I have both worked very hard to make sure in the past 

that the budgets that our parties have presented here in the Senate and House are balanced within 10 years, and I intend to maintain that attitude if I get the chance to advise the President on 

that issue. 

Senator DAINES. I think you also have a great opportunity to 

help bring clarity to the spending picture. I think up here we are 

oftentimes drowning in data, we are starving for wisdom. I think 

you could bring much needed guidance to that organization. 

As I mentioned, Congressman, I did spend 28 years in the private sector before coming to the Hill. In fact, the last 12 years was 

as an executive of a cloud computing company, which was eventually acquired by Oracle. In 28 years, I never received a letter when 

I was in the private sector that my own personal information had 

been compromised, that I had been hacked. It was not until I became a Federal employee that I received a letter from the OPM. 

This past October, OMB launched cyber.gov where agencies can 

now find the best practices in cybersecurity. And, by the way, I was 

the very first Senator to call for the resignation of the Director of 

OPM when over 20 million American Federal employees’ information was compromised where we had our Personal Identifiable Information (PII) in the hands of potential adversaries. 

But I was glad to see the cyber.gov site come up. It is a long 

overdue website. It was meant to guard against hacks like we saw 

at OPM. 

Tell me that you are going to continue to strengthen these efforts 

and protect Americans’ cybersecurity. 
34 

Mr. MULVANEY. I hope to be able to do just that, Senator. We actually saw something similar to the OPM hack—not similar. We 

did a hearing on the risks that are out there today, and I think one 

of the things we learned is that the Defense Department actually 

does a pretty good job in defending against cyber attacks, and that 

is in large part because of the culture that exists within the defense community, that they know they are under attack all the 

time. 

But for some reason, that culture does not extend to many of the 

other non-defense agencies, and that is where the weaknesses 

should be—which really should worry us, because there is a great 

deal of information about you, me, Senator Hassan’s children at the 

Department of Education (DOE), at the Internal Revenue Service. 

There is real information out there that we need to protect. So I 

can give you the commitment to continue to try and improve the 

defenses in those areas. 

Senator DAINES. I think you will have a great opportunity, when 

confirmed, to not only change the outcomes and the results, but 

also change the culture of that entire organization, which I look 

forward to working with you in doing so. 

Mr. MULVANEY. Thank you. 

Senator DAINES. Thank you. 

Chairman JOHNSON. Senator Hassan. 

OPENING STATEMENT OF SENATOR HASSAN 

Senator HASSAN. Well, thank you, Mr. Chairman and Ranking 

Member McCaskill. Thanks for being here, Congressman 

Mulvaney, and I did enjoy our meeting in my office, and you and 

I found some common ground on the importance of fiscal responsibility. We are both firmly committed to good government. And we 

agreed on some steps we could take to improve the Federal budget 

process. For instance, biennial budgeting is something we do in my 

home State of New Hampshire. 

But I did want to take a minute to reiterate a couple of things 

that we have touched on here today. I was Governor of New Hampshire when the 2013 Federal Government shutdown occurred, and 

I can tell you it had a major impact in my State. It shut down facilities in the White Mountain National Forest over Columbus Day 

weekend, which is the height of our leaf peeping season and one 

of our biggest tourism weekends of the year. Hundreds of New 

Hampshire National Guard employees were furloughed. Other furloughs happened at the State level. Not only did that impact those 

families, but obviously businesses throughout my State were impacted. When people do not have their paychecks, they do not engage in consumer activity. 

So I would ask you, in light of your earlier comments that have 

been highlighted here already, about the shutdown being good policy, just to understand that when people actually live through it, 

it is not an abstract concept or idea. It really hurts. It hurt our 

economy, and it hurt a lot of people. When I furlough National 

Guard employees, it compromises my State. 

So do you still really think it was good policy? 

Mr. MULVANEY. I appreciate that, Senator. I appreciated having 

the chance to talk about it in your office, and I do hear your criti-
35 

cisms of what happened. And let me put it to you this way: I do 

not believe that shutdown is a strategy. I do not believe that shutdown is desirable. What I do believe is that sometimes it is an unfortunate result of us not being able to agree. People say, ‘‘You 

voted for the shutdown.’’ That is not true. There was no such thing 

as a vote for a shutdown. I voted for an appropriations bill that did 

not pass. 

So I look forward to being able to encourage the President not 

to use that as a tool because it is not an effective tool. 

Senator HASSAN. It is not an ineffective tool; it hurts people. And 

I think our job here is not to just refer to it as ‘‘unfortunate,’’ but 

to acknowledge that it impacts real people. 

I wanted to talk a little bit, too, about the impact and importance 

of Medicaid, especially to the substance abuse epidemic that my 

State and many others are facing. 

Drug overdose deaths now kill more than 50,000 people per year 

in our country. That is more than other leading causes of death 

such as car crashes. My State of New Hampshire has the second 

highest rate of drug overdose deaths in the country. And as Governor, I worked with Republicans in my State as well as the business community to expand Medicaid to cover over 50,000 hardworking Granite Staters. Thousands in New Hampshire are now 

getting coverage for substance use disorder treatment, and experts 

have said it is an absolutely critical tool for addressing this epidemic. And Medicaid expansion is now under attack from this Administration, as we talk about—this Administration talks about repealing the Affordable Care Act. 

And then there is this discussion of block-granting Medicaid 

which would likely result in a 20-to 30-percent cut in Medicaid 

funding to States within just a few years, which has raised concern 

from Republican as well as Democratic Governors. Republicans 

Governors like John Kasich, Rick Snyder, and Charlie Baker have 

been speaking out against block grants and Medicaid cuts that 

would hurt their States. So you have supported Medicaid cuts, such 

as the ones that are being suggested, in the past. So can you agree 

that substance use experts say that Medicaid is critical for combating the crisis? And you do not think that removing Federal assistance for treatment will harm people suffering from substance 

use disorders? 

Mr. MULVANEY. I can say this, Senator, which is that I know the 

President talked about those exact same things on the campaign 

trail. In fact, I think he may have talked about it in your State or 

certainly in your part of the country, and I know it is important 

to him. So I see my role, if he sets out the policy, our policy of the 

Trump Administration is going to be X on opioid abuse, then my 

goal is to try to figure out a way how to pay for that, how to implement that as efficiently as possible, work with whatever other Federal agencies are involved so that we can satisfy and meet the 

President’s policy. 

You have asked me again, as many people here have today, how 

I voted in the past, and I defend those votes. Again, I was voting 

on behalf of the people I represent in South Carolina. But I do see 

my role changing to an adviser and then an implementer of the 

Presidential policy. 
36 

Senator HASSAN. Well, and I thank you for that, and I do appreciate it. I will just ask you all to consider as you advise the President that we have Medicaid expansion in place. In my State it was 

a bipartisan plan. It has helped us begin to build the kind of treatment infrastructure we need, and to repeal it and destabilize it, 

even if you replace it with something else, seems to me to be less 

than wise. So I hope you will take that back. 

Toward that end, I just wanted to touch on one other area where 

your new role may be perhaps at odds with past votes. One of the 

most trusted family planning and reproductive health providers in 

the country is Planned Parenthood. In your potential role at OMB, 

the goal is to assess the quality of agency programs and procedures. So I am troubled with your record that indicates a bias in 

opposition to programs that impact women’s health. Programs like 

the Title X family planning program help provide essential family 

planning and preventive health services to women nationwide. 

As a steward of good government, I believe that when we award 

grants to organizations, we need to take an account which organizations are best able to provide the services. I think funds should 

be awarded based on a provider’s ability to serve patients and not 

based on an ideological or politically motivated agenda. Do you 

agree? 

Mr. MULVANEY. Senator, I do believe that money should be allocated based upon an ability to serve patients. I would point out 

that the President has said very complimentary things about 

Planned Parenthood during the campaign, except as it comes to the 

providing of abortion. Where I think he and I are probably on the 

same page as to what I have supported in the past, what I might 

recommend to him in the future is that moving money to the federally qualified health care clinics could be an even more effective 

way to provide those services. 

Senator HASSAN. And I am going to interrupt you just because 

my time is almost up. 

Mr. MULVANEY. Yes, ma’am. 

Senator HASSAN. My federally qualified health centers say they 

cannot absorb the thousands of women in New Hampshire who use 

Planned Parenthood. A lot of those women do not have geographical proximity to those centers. I will let you know that when 

I was at Planned Parenthood in New Hampshire, one of the centers 

there just a couple of weeks ago, most of what they do is family 

planning and reproductive health services for women who cannot 

get their care otherwise. There were women there who, once they 

got private insurance, still went to Planned Parenthood because 

they said the care was so superb. And Planned Parenthood also 

takes care of women during their pregnancies when women want 

to continue their pregnancies, and do a superb job of that as well. 

It is a really important resource, and it is a very cost-effective one 

from all the data. 

So I hope that we can get to making data-driven decisions 

around settled law and recognize the importance of this particular 

provider nationwide to the women of our country. Thank you. 

Mr. MULVANEY. Thank you, Senator. 

Chairman JOHNSON. Senator Heitkamp. 
37 

OPENING STATEMENT OF SENATOR HEITKAMP 

Senator HEITKAMP. Thank you, Mr. Chairman. 

Not for reply, but I find it ironic almost that the mantra on the 

Affordable Care Act is the concern about if you like your doctor, 

you can keep your doctor, except if your doctor is employed by 

Planned Parenthood. There is a certain amount of hypocrisy to that 

statement. So I move beyond. 

One of the things I want to examine is your position on Social 

Security. You have said that you would not affect anyone who is 

60 or over, right? So it would not require that they wait until they 

are 70 in order to basically access the Social Security program. 

That means the 59-year-old oil rig worker would now have to work 

until they are 70. That is hard work. I can tell you that, and lots 

of problems in terms of health care and maintaining. But yet my 

husband, who is a physician, who maxes out on the cap, he is not 

asked to sacrifice anything. And he can clearly work until he is 70 

because he is not working outside in the elements. 

I am not sure I understand how that philosophy could ever be 

consistent with the President who has really, I think, spoken to 

that oil rig worker saying, ‘‘We are on your team. We are on your 

side.’’ 

So I just ask you to be really careful when you look at broad generalities, especially as it relates to Social Security, and especially 

when every person here gets a tax break every year when they 

reach the cap. So if we are looking at solving the problem of Social 

Security—and we recognize you all took a pledge, but that pledge 

is not necessarily good public policy. From my standpoint, we have 

to solve the problem. But we have to be intellectually honest about 

the other side of solving this budget crisis. 

And so I am going to ask in response to Senator McCain’s discussion, you said, look, we are going to cut domestic programs to basically plus-up on the defense side. Obviously, OCO, you and I can 

share an opinion about whether that is real money or not. But let 

us examine on that domestic-side, non-defense domestic. Where are 

you cutting? Because programs like funding for flood control programs are critically important to my State and important to those 

same folks who live in housing where they are going to see huge 

increases in their flood insurance without a flood program. 

We have to be really careful about how we do this and how we 

respond to the needs of the American people. So right off the bat, 

not looking at so-called entitlement programs, where would you see 

an opportunity to cut domestic spending? 

Mr. MULVANEY. Senator, thank you, and I have read, as I believe 

I may have mentioned earlier—the two hearings are starting to 

run together—that I have read some of the same things you did 

about the early versions of the budget. But I have not been involved with those, so I have no idea what the proposals are or even 

if the reports have been accurate. I think the rules are that I am 

supposed to be excluded from that, which I agree with. So I am not 

familiar with the proposals that the President has made. 

Senator HEITKAMP. I am really concerned, and I think we can 

take a look at Medicaid funding, and we can say if we stop research on Alzheimer’s and Parkinson’s—you think you have a Med-
38 

icaid funding problem right now? You are going to have a bigger 

Medicaid funding problem going forward. 

And so let us not be so quick to criticize things like flood control 

and the domestic programs because those are investments that 

could, in fact, in the long run save our budget and really, I think, 

make investments. 

I do not have a lot of time. I want to get to the Export-Import 

(Ex-Im) Bank. I am probably a one-note person here frequently, but 

for the life of me, I do not understand, other than kowtowing to 

maybe folks who write things like ‘‘Crony Capitalism,’’ why there 

would ever be opposition to the Ex-Im Bank. We have billions of 

dollars of export financing in the pipeline right now that could 

mean American jobs. In fact, in your own State, we have lost thousands of jobs in South Carolina because we have not had a quorum 

on the Ex-Im Bank. This should be a no-brainer. 

Explain to me your opposition to the Ex-Im Bank and why you 

took the position that you took. 

Mr. MULVANEY. Sure, and, again, you are asking about something that I did when I was an elected official. 

Senator HEITKAMP. Right. 

Mr. MULVANEY. I am hoping to change that, but if the President 

came to me and said, ‘‘Mulvaney, what do you think about the ExIm Bank?’’ I would try and lay out for him some of the impacts it 

has on the market about favoring exporters over domestic producers. The example is fairly easy to give to the President: Mr. 

President, if Senator Heitkamp and I are both in the business of 

making glasses and she happens to export some of hers and I do 

not, we compete domestically but she also exports, she has advantages that are available to her—low interest financing, can buy 

equipment cheaper—that she can use to compete against me that 

actually come from the government. And I think that warps the 

marketplace and puts our purely domestic producers at risk. 

To the larger point about is there a better way to do it, I did participate in and would be happy to talk to the President about some 

of the ideas that came out of it—not a bipartisan group but a Republican group that included people who were opposed to the ExIm Bank and those who supported it. I think one of the things that 

there was a rally of support for was using the Bank as a true lender of last resort. 

Senator HEITKAMP. Well, I would be curious about all that because, obviously, I was heavily involved in negotiation of the reauthorization and very concerned about what is happening right now 

with export finance. I did have a chance to talk to then-Presidentelect Trump who I believe has some varying opinions about the ExIm Bank than what you do. 

Finally, I want to extend the opportunity to work on reg reform. 

Senator Portman and I are in discussions, along with Senator 

Lankford. We think that there is a real opportunity here. We want 

to make sure that reg reform gets done sooner rather than later 

and that we have a process that provides a real opportunity for 

Americans to participate and a real cost-benefit analysis that we 

can evaluate. I think it is critically important. 

The last point I want to make is carried interest, and we have 

talked so much about the expenditure side, but I like to make this 
39 

point: That same rig worker pays a higher percentage in tax than 

someone who has the good fortune to be born into a family with 

a trust fund. There are some real problems with that as well. I 

would ask you to at least consider the other side of this and eliminate what I consider the inequities to the working people in this 

country. 

Mr. MULVANEY. Thank you, Senator. 

Senator HEITKAMP. Thank you. 

Chairman JOHNSON. Senator Portman. 

OPENING STATEMENT OF SENATOR PORTMAN 

Senator PORTMAN. Thank you, Chairman. And let me follow up 

on regulations, but first to welcome you to the Committee, tell you 

you are about to join the ranks of the OMB where you have a number of just incredibly qualified career people, as I talked to you 

about in our meeting. 

Mr. MULVANEY. I also said nice things about you before you came 

here. 

Senator PORTMAN. Ok. 

Senator MCCASKILL. He did. I will testify. 

Senator PORTMAN. Did he? OK. I guess I should not say this: It 

is also the worst job in Washington—unless you like saying no to 

people, then it is really fun, because you are in a position of telling 

Cabinet members as they come to you with all their grand ideas 

and new spending programs. We have to keep this thing under control. We have a budget that is now approaching over the next 10 

years, we were just told by CBO today with their new baseline, 

$1.4 trillion a year deficits in 10 years. We are looking at another 

$8 trillion roughly on top of the almost $20 trillion of debt. So it 

is a tough job, and I know based on your background that you are 

willing to make tough decisions. So I know wish you luck and look 

forward to working with you. 

On regulatory reform, Senator Heitkamp is right. We have a 

great opportunity here. And it has been bipartisan, typically. Over 

here on this side of the Capitol, we have been able to get some 

things done. In fact, Senator McCaskill and I did a permitting bill 

together that is really making a difference. It is to streamline construction projects. And what better time to do that when we are 

talking about infrastructure. We actually slipped it into the highway bill in 2015. It requires accountability, one agency in charge. 

It requires more transparency, a dashboard where anybody can go 

online and find out where a project is. It reduces the statute of limitations from 6 years to 2 years, which is really important. It also 

sets up a new council over at OMB. OMB was not really wild about 

having this council, but we knew it was the right place to put it 

because OMB is such a powerful job. And the council is called the 

‘‘Federal Permitting Improvement Steering Council,’’ and we have 

been concerned that the previous Administration was not moving 

quickly enough in terms of getting an executive director in place, 

getting this moving. And I will say I have been concerned about 

that. 

I would want you to work with us on that. I wonder if you would 

make a commitment to me today to ensure that we find a strong 

executive director for this council and that we fully implement this 
40 

legislation to ensure we can ensure that this money that is going 

toward infrastructure and other projects is better spent. 

Mr. MULVANEY. I can commit to that and also commit to you to 

encourage the President to give us whatever tools we need necessary for OMB to do that. 

Senator PORTMAN. Excellent. 

With regard to regulations, there is legislation called the ‘‘Regulatory Accountability Act.’’ Senator Johnson is very interested in 

this bill, and Senator McCaskill. Senator Heitkamp just mentioned 

Senator Lankford. It has always been bipartisan. We have introduced it in each of the Congresses over the past 6 years. It is the 

first major reform to the APA that you talked about with Senator 

Carper earlier, the Administrative Procedures Act, in almost 70 

years, and it basically says cost-benefit analysis for everybody, it 

has to be more rigorous. You also have to go through a much more 

transparent process as you make rules, and including for major 

rules, having a separate hearing. 

It also talks about your issue you talked earlier about, which is 

information. I would ask you this question: Do you agree that agencies should be required to use the best available scientific, technical, and economic data when writing rules? 

Mr. MULVANEY. Absolutely. In fact, I was a little surprised to 

find out they were not already required to do that. 

Senator PORTMAN. That is the legislation because they are not. 

It also codified, as you know, the famous Executive Order 12866 

that President Reagan initially issued and then President Clinton 

after him and every President since. So it puts into statute what 

is required in terms of cost-benefit. 

Do you agree that independent agencies that have more and 

more authority out there should be required to go through a costbenefit analysis much like the executive branch agencies are? 

Mr. MULVANEY. I do, sir. I think it would help add accountability 

to those agencies. 

Senator PORTMAN. That is in the legislation, too, so we look forward to working with you on a number of items, but this is one 

where I actually think we can get it done—again, assuming that 

working with my colleagues on both sides of the aisle we are able 

to get it through the House and the Senate. It has passed the 

House before, as you know. You voted for it. And I think you had 

16 Democrats on board during that time period where you frankly 

had a pretty partisan atmosphere with other reg reform bills that 

were not bipartisan. 

Let me ask you a little about just your view of management. You 

and I talked about the OMB focusing more on ‘‘B’’ and less on ‘‘M’’ 

sometimes and the management function being so important, particularly as you are looking to try to reduce costs and increase efficiency in government. Waste in government is something I know 

you have talked about and the President has talked about. 

We took a full review of the mission effectiveness and efficiency 

of every Federal program when I was there. It was called the Program Assessment Rating Tool (PART) program. It took a lot of 

time. Not everybody loved it. Some of the career people thought it 

was too time-consuming. It was an enormous undertaking. But this 

tool, having this Program Assessment Rating Tool, really helped to 
41 

force us to dig more deeply into every program and determine if 

there was a better way of doing things. 

The result was that in our budget, some programs were increased in their funding that had performed well; others were reduced or reformed. Others were eliminated altogether. And I just 

wondered if you had considered undertaking a similar initiative as 

Director of OMB. 

Mr. MULVANEY. I have. Yes, sir. In fact, I appreciated the opportunity to talk to you about your expert with the PART program, 

and I think we talked about the importance of adding quantitative 

data to OMB’s analysis, that ending the PART program denied us 

that management tool. You cannot manage exclusively by connotative data, it is pretty difficult to manage at all with no quantitative 

data at all. 

So whether or not we reinstitute PART in its old form or do 

something similar, I am looking forward to adding to OMB’s management tools along the same lines you have when you were there. 

Senator PORTMAN. Great. Again, we would love to work with you 

on that, and you are right, there is some controversy about what 

you use as your qualitative and quantitative data. 

Mr. MULVANEY. Yes. 

Senator PORTMAN. But if you do not have any, you do not have 

anything to help direct these agencies and make tough decisions 

because the priorities are going to be difficult in this budget climate. 

Mr. MULVANEY. And it is hard to measure if you do not have a 

yardstick. 

Senator PORTMAN. President Trump just made a lot of promises. 

Rebuilding our military, cutting taxes, while important, they also 

create budgetary challenges, particularly the kind of tax reform 

commitments that he has generally made. We do not know the specifics yet. And even without these policies, as I said, CBO today 

told us the situation is getting worse, not better, in terms of our 

debt and deficit. 

CBO also tells us that Social Security, health care, and interest 

on the national debt are responsible for 84 percent of all projected 

new spending over the next decade and nearly 100 percent of the 

increased budget deficits projected over the next several decades. 

So we know on the mandatory side is where we see the big increases. Simply put, we cannot avert these massive deficits coming 

forward without some sort of reform of these programs. They are 

incredibly important programs. They are safety net programs, but 

they have to be reformed and saved. It is not about green eyeshade 

accounting either, because as you know, we are looking at the Social Security Trust Fund that is going belly up and Medicare going 

bankrupt, 17 years and 11 years, respectively, which could be devastating to millions of seniors. 

So my question to you is: What steps do you plan to take to ensure that saving entitlements remains a priority in this new Administration? 

Mr. MULVANEY. I intend to make it a priority in my discussions 

with the President on fiscal matters. We had a chance to talk here 

earlier today about going to the President with information regarding the ramifications of various decisions: ‘‘Mr. President, if we do 
42 

not do anything on Social Security and Medicare, here is what happens.’’ You have mentioned some of the things, about the trust 

funds going to zero—I do not like to use the term ‘‘going bankrupt’’ 

because that is not an accurate statement. 

Senator PORTMAN. Insolvent. 

Mr. MULVANEY. Exactly. ‘‘Here is what happens if you do not do 

anything. And if you do not do anything, then 11 years from now 

there could be a 22-percent across-the-board cut. Here are some of 

the options available to you to make improvements to the system, 

to not only make sure it will be there for the next generations, but 

also to impact positively the deficit situation that you just laid out.’’ 

So, no, I expect to be having regular conversations with the 

President, with all the rest of the advisers, about the fiscal impacts 

of the entitlement programs. It will ultimately be up to the President what we decide to do because that is his call, but I see it as 

my job to make sure he understands exactly the economic and fiscal ramifications of any of those decisions. 

Senator PORTMAN. Great. Thank you, Mr. Chairman. 

Chairman JOHNSON. Thank you, Senator Portman. 

Congressman Mulvaney, we have talked in the Budget hearing 

and a number of people have brought up just information, and I 

told you in the Budget Committee hearing it drives me nuts as an 

accountant, as a businessperson, it is just so hard to get information out of the government and to really drive the management decisions. 

Certainly, in terms of this Committee, the Government Accountability Office, Inspectors General (IGs), these are sources of really 

good information, and yet we do not utilize the information to the 

full extent. For example, GAO has done their case studies. Agencies and departments have implemented about 41 percent of those 

recommendations saving $56 billion from 2010 to 2015, with the 

projection of another $69 billion potential. 

Senator Grassley and I wrote to the IGs and asked them to report on different recommendations that had been unimplemented; 

over 15,000, with a potential cost saving of $87 billion. 

As head of OMB, what would be your thoughts in terms of how 

do you actually utilize that information, how to put pressure on departments and agencies to utilize them so that we can save literally more than $100 billion? 

Mr. MULVANEY. Yes, and as a numbers guy, you can probably appreciate one of the things that jumped out in the work that you 

and Senator Grassley and various others had done on the IGs’ offices, the return is like 14:1. For every $1 that an Inspector General uses, they end up saving $14 of taxpayer money. That is a 

pretty good return. 

So I do appreciate the work that you all have done. I understand 

that OMB is directly involved in that. I think that the Deputy Director for Management, which is one of the positions within OMB, 

actually sits on that Council of the Inspectors General on Integrity 

and Efficiency (CIGIE). We deal with it over on the Oversight and 

Government Reform (OGR) Committee in the House as well. I 

think we are underutilizing a tool. In fact, certain agencies are simply abusing the Inspector General and do not even pay any attention to them at all. But, generally speaking, the concept of having 
43 

this person in those agencies, resident in those agencies, who can 

give us good information—I cannot tell you—and, again, your experience may be the same here. Most of the data, a lot of times, that 

we have in our Oversight and Government Reform hearings are 

driven by the Inspectors General. We do not have the ability, because of all the things that are on our plate, to do all the oversight 

that we want to, and Congress needs to have those Inspectors General, the President needs to have those Inspectors General doing 

their job and helping us give information, helping us collect information so that we can make good decisions about how to fix and 

reform various institutions. 

So I do look forward to making that a priority at OMB. I have 

learned firsthand, as you have, how frustrating it is when Inspectors General are ignored or when no one can give them data. I 

think I learned today, for example, in a previous hearing from Senator Enzi that the Inspector General at the Consumer Financial 

Protection Bureau (CFPB) actually has no authority at all. That 

was news to me. 

So I do look forward to reinvigorating the Inspector General’s office, giving them the respect and the credibility that they need. 

They are an absolutely critical function of government when it 

comes to trying to make government more accountable and more 

efficient. 

Chairman JOHNSON. There are a number of rules that we impose 

on ourselves that, from my standpoint, prevent us from making 

good policy decisions, whether it is a tax law or whatever. One of 

them is just the difference between dynamic and static scoring. 

Can you give us your thoughts on that, particularly when I will go 

back to the benefit of growth, and if we do not take into account 

the reality of increasing taxes, taxes are going to harm economic 

growth, oftentimes decreasing taxes can produce more revenue 

than you are getting on a static basis? Can you just kind of give 

us your thoughts on that? 

Mr. MULVANEY. Sure. And, of course, the relevance here is that 

OMB does play a process in sort of the executive branch process 

of doing economic analysis, and that the short answer is we live in 

a dynamic world, not a static world. I do believe that there is an 

implicit bias into a static model for tax increases over economic 

growth. It is very difficult to measure future economic growth, for 

example, fairly easy to measure, well, if you had that $16 trillion 

economy last year and you generated $2 trillion worth of revenues, 

if you double taxes, you take in four. Those are the type of misleading results that I think a static model gives. 

Dynamic models are not perfect. It is very difficult to model out 

an economy that is $16, $18, $20 trillion in size. But to completely 

ignore macroeconomic feedback I think is probably shortsighted of 

us, and I look forward to possibly bringing reforms to that area at 

OMB. 

Chairman JOHNSON. One area I want to go back to because you 

have been accused a number of times of voting for a shutdown, and 

I think you very, appropriately said you did not vote for a shutdown. I just want to give you the opportunity to describe that in 

greater detail, because I think that it really is that type of misrepresentation of what you are doing that—as I have talked about, 
44 

too, we never shut down the government, the full government. We 

shut down actually a relatively small portion of it, oftentimes with 

the greatest amount of pain. But just talk a little bit about exactly 

what happened. 

Mr. MULVANEY. I think if you go back in time, what was happening—Obamacare was rolling on. Obamacare, the Affordable 

Care Act, did not turn on at one time. It came in in bits and pieces. 

And we had noticed with great interest that the President had 

issued certain unilateral waivers or delays, specifically, as I mentioned earlier, to corporations. We also know that the Department 

of Health and Human Services had given special privileges to various businesses all across the country but not given them to anybody. That was violative of some principles that many of us—myself—had regarding equal protection under the law. If we are going 

to have the Affordable Care Act, it should affect businesses in 

South Carolina, Wisconsin, and all the way across the Nation the 

same. 

And so what we decided to do was try and make a point there 

by adding to the appropriations language a 1-year delay in the individual mandate under the theory that if it was good enough for 

the President to give to corporations, it was good enough for us to 

give to our individual citizens. That is what we bogged down over. 

The House passed a bill. The Senate did not. We passed individual 

smaller spending bills to open the parks in the various States because we do know, to Senator Hassan’s point, it is real, and we do 

recognize that there were impacts in your State and in my State, 

which is why the House passed a series of smaller bills that would 

open the Federal parks, fund a Planned Parenthood, believe it or 

not, do all of those things while still trying to drive that discussion 

about equal protection and fairness. 

Again, anytime you have a system where the House, the Senate, 

and the White House have to agree on something, if they do not 

agree, that is when you end up in—— 

Chairman JOHNSON. Which, by the way, the way the process 

should work is the House should pass individual appropriation 

bills. You tried to do that. It just was not taken up in the Senate. 

Mr. MULVANEY. Correct. And one of the things I would like to 

say—we did not get a chance to talk about it in this Committee; 

we did get a chance to talk about it in Budget—is the importance, 

and I hope to be able to have the opportunity to drive home for the 

President the importance to both parties, to the Nation, of a properly functioning appropriations process. It is the way the Constitution set it out for us to function, and I think we need to do what 

we can in the Administration, if I am lucky enough to be there, to 

encourage you folks to get back to the properly functioning appropriation process. 

Chairman JOHNSON. Thank you. Senator McCaskill. 

Senator MCCASKILL. Yes, and this is an equal opportunity sin. I 

heard for years, ‘‘Oh, the Democrats have not done a budget.’’ Then 

the Republicans take over and guess what happens? There is no 

budget. So it is really, the partisan back-and-forth sometimes is 

hard, especially around the subject of who is failing when it comes 

to regular order on appropriations and doing budget bills, because 
45 

from where I stand, Democrats have been guilty, but so have Republicans. So I do not know how we get that fixed, Congressman. 

Let me talk to you about something that I think is pretty important, and that is, the hiring freeze as it relates to contractors. Do 

you have any idea what percentage of the workforce is contractors 

as you go into this job? 

Mr. MULVANEY. I do not know, ma’am. 

Senator MCCASKILL. Well, I will tell you. It is way more than you 

think it is. The Department of Energy, for example, is primarily 

contractors. There are not that many full-time employees (FTEs). 

And the thing that is so frustrating to me is that people who lead 

this government sometimes think that by—and, frankly, during the 

Bush Administration, they actually did a pretty good job of limiting 

the growth of FTEs in the Federal Government. But guess what 

happened? They blew up contracting. You go to Homeland Security, 

you go to Energy, you go to the Department of Defense. I cannot 

tell you how many times in this Committee room I have asked people who run giant agencies, ‘‘How much of your workforce is contractors?’’ and they go, ‘‘I do not know. I do not know.’’ 

So there was no freeze on contractors that the President enacted, 

correct? 

Mr. MULVANEY. I am not familiar with the freeze that they imposed yesterday. I am familiar with our discussions about the importance of treating them the same, if you are going to look at 

them in that fashion. 

Senator MCCASKILL. Yes, and, this cost-benefit analysis, that 

door needs to swing both ways. I think there has been analysis of 

the private workers that has been compared to FTEs, and in many 

instances it has not saved us a dime. In fact, it has driven up costs, 

not driven down costs. 

So I think it is really on the backs of Federal employees to say 

that, making sure we freeze them. And you know what is going to 

happen at the VA for those critical medical positions? They are 

going to hire contractors. So it is not like we are stopping the hiring of workers. 

So I would implore you to explain to the President that if you 

are going to do a freeze on employees, maybe you ought to freeze 

contractors first and freeze employees later, because I do not think 

we have had the kind of oversight on contractors that we have on 

employees. 

Mr. MULVANEY. You and I have had a chance to discuss this, and 

I think I agreed with you. This was one of your written questions, 

and I think the response I gave is what I would hope to be able 

to advocate to the President, that painting with a broad brush may 

not be the most effective way to deal with the issue and what 

needs to drive the discussion regarding FTEs versus contractors is 

the economic consideration. And I agreed with you that there may 

be circumstances under which it is actually more cost-effective and 

better for the taxpayer to use an FTE versus a contractor. And I 

welcome further discussions about those specific examples. 

Senator MCCASKILL. Great. I think we can work together on 

that. 

Mr. MULVANEY. Yes, ma’am. 
46 

Senator MCCASKILL. I am worried about data coming out of your 

shop, and I am going to be honest with you. This is an awkward 

and uncomfortable line of questioning for me, but I think it is really important we put it on the record. 

I have been astounded over the last 3 days at what has occurred, 

that the President sent his Press Secretary out to utter falsehoods 

in a press briefing that had been—there was not only photographic 

evidence but numeric evidence to show that they were just simply 

not true. You had one of his advisers go on TV on Sunday and say, 

well, they were ‘‘alternative facts.’’ And then, yesterday, he says he 

was denied the popular vote because of millions of illegal immigrants, and there is not one iota of evidence to back up that claim. 

Now, I get campaigning, I get campaign promises. But I want to 

ask you, Congressman, if the President asks you to not issue real 

data or asks you to alter data according to his narrative, what 

would your reaction be? 

Mr. MULVANEY. Thank you for that, Senator. The credibility that 

I think I bring to this job is that I believe very firmly in real numbers. My job is to tell the President the truth. My job is to tell you 

the truth. 

Senator MCCASKILL. What if he tells you to say something other 

than the truth? Do you resign at that point? 

Mr. MULVANEY. Well, I do not imagine the President of the 

United States would tell me to lie. 

Senator MCCASKILL. I beg your pardon. He told Sean Spicer to 

go out there and say things that were demonstrably untrue. 

Mr. MULVANEY. I am not privy to the conversations between the 

President and Mr. Spicer, so I cannot comment on that. I am not 

sure if that conversation took place or not. 

Senator MCCASKILL. OK. But you get my point. 

Mr. MULVANEY. Yes, ma’am. 

Senator MCCASKILL. And you will not do it. 

Mr. MULVANEY. Like I said, my value in this job is my credibility 

when it comes to numbers. We have had discussions, I think, today 

about the magic asterisk and about making assumptions that are 

completely unreasonable. I have been one of the biggest critics of 

that during this administration. I do not plan on exposing myself 

to claims of hypocrisy. 

Senator MCCASKILL. I think that is great, and I appreciate that 

answer on the record. 

OMB has to review rules. This week we are in new territory also 

with President Trump because he is going to hold onto all of his 

businesses. He is not divesting. And he has made it very clear he 

is going back to his businesses when he leaves office. So whatever 

happens to those businesses in the meantime will directly impact 

how much money he has. So, I mean, he even said, ‘‘If I go back 

to my businesses when I am done being President and my sons 

have not done a good job, I am going to fire them.’’ So we know 

that what happens to the Trump enterprises, international businesses, between now and when he leaves office will impact his fiscal bottom line. So that means every regulation that is changed, 

every regulation that is enacted, could have an impact on the finances of the President of the United States. Will you analyze 

those regulations and be transparent with the public when the 
47 

President is going to make money off the regulations that you 

change? 

Mr. MULVANEY. Senator, I am not familiar with the President’s 

businesses or his plans on divestiture. I thought I saw—— 

Senator MCCASKILL. Well, let us just assume he has licensing 

deals in 22 countries, that he has hotels and golf courses, he has 

loads of employees, he has—I mean, I think you kind of know what 

his business—we do not know because we have not seen any documents, but we kind of know what his businesses are, and obviously 

they are going to be impacted by rule changes. 

Mr. MULVANEY. Yes, and without that information myself, I am 

not sure how I could do it. My job would be to explain to the President what the general impacts are. I do not foresee a situation 

where I say this company will be impacted this way or that company impacted that way. I will be looking at the macroeconomic 

implications of what decisions we are making. And, again, I am not 

trying to be—— 

Senator MCCASKILL. Do you believe there is a duty that the 

President has to the American people to be transparent about making money off changes of regulations that you would, in fact, push 

for? 

Mr. MULVANEY. I believe in transparency, Senator McCaskill, but 

I do not know if I am in a position to tell the President how to conduct himself. 

Senator MCCASKILL. OK. I would you urge him to be more transparent about when regulations are going to affect his financial status? 

Mr. MULVANEY. Again, I am not sure if that is the role of the 

OMB Director. My job would be to say, ‘‘Look, this is how this particular regulation will affect the economy.’’ Again, I do not know if 

it is the proper role of the OMB Director to do anything more than 

that. 

Senator MCCASKILL. You understand this is completely uncharted territory, we have never had this situation before where a 

government run by a businessman who has not divested could, in 

fact, enrich himself by what his government does. You understand 

that has not occurred before. 

Mr. MULVANEY. I believe it has been a long time, if ever, that 

we have had a person with this business—— 

Senator MCCASKILL. I would love you to tell me in history who 

it was that—— 

Mr. MULVANEY. I cannot—I said it has been a long time. I do not 

remember. 

Senator MCCASKILL. Yes. 

Mr. MULVANEY. I know that the—— 

Senator MCCASKILL. OK. Thank you, Mr. Chairman. 

Chairman JOHNSON. Thank you, Senator McCaskill. 

Just before I turn it over to Senator Hoeven, just for accuracy, 

in fact, when Republicans took over control of the Senate, we did 

pass a budget. We reconciled with the House for fiscal year 2015. 

There was a budget deal that set the top-line figures for fiscal year 

2016—— 

Senator MCCASKILL. Oh, no. I am talking about last year, Ron. 
48 

Chairman JOHNSON. Well, I am just laying out the facts. We did 

pass a budget reconciled, had a budget agreement that set the topline figures. I believe, Senator Hoeven, you are on the Appropriations Committee. We passed all 12 appropriation bills for fiscal 

year 2015. We were blocked from bringing those on the floor of the 

Senate. Passed an awful lot of appropriation bills this year, repeatedly blocked us on defense appropriation bills. 

Senator MCCASKILL. We could go back and forth, Ron, because 

we did the same thing—we passed all the appropriations bills, and 

you guys blocked it. I remember the day it happened. 

Chairman JOHNSON. Just trying to be accurate. 

Senator MCCASKILL. And there was no budget last year. Just to 

be accurate. If you are going to do this, I am going to come back. 

Chairman JOHNSON. We had a top-line number. Senator Hoeven. 

OPENING STATEMENT OF SENATOR HOEVEN 

Senator HOEVEN. Congressman, thanks for being here today. 

Welcome to the Senate. 

Mr. MULVANEY. I am having a good time, Senator. 

Senator HOEVEN. Yes, good to have you here. I want to ask you 

questions in three areas. One is: How do we get on top of the regulatory burden? You have a role, obviously, or will have a role, if 

confirmed, with the Office of Information and Regulatory Affairs 

(OIRA). How do we get on top of that regulatory burden so we can 

get this economy growing and help our small businesses? 

The second area is: How do we get the debt and deficit down and 

under control, get back to fiscal responsibility? And, obviously, that 

is something that you will work with at OMB. 

And then the third area is I just want to ask if you are familiar 

with P3 projects, public-private partnerships, and do you see them 

as a way to both not only get things done like building infrastructure but also helping to cut into the backlog of projects and do it 

in a way where we leverage resources and, again, save money for 

the taxpayer. 

So we can start with the regulatory burden. Do you think a Federal one-size-fits-all is the way to go? Or do you think we ought to 

give States flexibility and more control over what goes on in their 

State? Because there are differences among the 50 States, and they 

are the laboratories of democracy. 

Mr. MULVANEY. Yes, and I think it is always a good idea to look 

at the States for an opportunity for new ideas and being more creative. We talked earlier today about Medicaid, for example, not a 

regulatory issue but there may be ideas out there for how to use 

Medicaid in the Carolinas or the Dakotas or a different way than 

they are used in New Hampshire, Missouri, or California. So that 

is always something that I think we should explore. 

Other things you could do to get on top of the regulatory burden 

would be to actually enforce the laws that exist today regarding 

retroactive analysis of regulations. I do not think we have done a 

very good job with that. We have not cleared old regulations off the 

books after they become no longer pertinent. 

You could improve the cost-benefit analysis process during the 

regulatory process. That involves getting better information. 
49 

So there are many things you can do within the regulatory regime to try and improve the process and end what we have ended 

up with right now, which is this system where somehow we have 

the very best of intentions with regulations at the beginning of the 

pipeline, and at the end of the pipeline a regulation comes out that 

crushes small business and often does not even accomplish what 

the intention was at the beginning. 

So the regulatory process is broken. OMB can play a role in fixing that, and I look forward to doing that with members of both 

parties on both sides of the Hill. 

Senator HOEVEN. Do you believe in the role as OMB Director you 

should help provide legal and regulatory certainty and that you 

should help encourage and empower investment in our economy 

and job growth? 

Mr. MULVANEY. Absolutely, and that goes to your second point, 

which is what is one of the things you can do to get the debt under 

control. I think if we would be perfectly candid with each other, the 

best way for us to reduce the size of the deficit is to grow the economy. And as Chairman Johnson has pointed out several times here 

today, moving from 2-percent growth to 3-percent growth could be 

an extra $16 trillion, I think it was, going to 4 percent an extra 

$29 trillion in terms of the size of the pie. And I can assure you 

if the government continues to take 17 or 18 percent out, it is better from a balanced budget possible to take 17 or 18 percent of $32 

trillion than it is 16. 

Senator HOEVEN. Talk about your role in terms of savings and 

reforms and those kind of things as we work to both grow the economy and then find savings. How do you go about that at OMB? 

Mr. MULVANEY. That is one of the things I am most excited 

about. I think we are in a situation now where so many of 

us—and I imagine the same thing has happened to you in your 

time here on the Hill. The number one complaint of people who 

take time out of their day to come visit me over in the Rayburn 

Office Building is, ‘‘Look, this is how regulation is crushing me.’’ To 

be perfectly candid, I get that a lot more than I get questions about 

taxes. And I think enough members of both parties have finally 

gotten to the point where they realize maybe the regulatory burden 

has gotten out of control. So now you have that critical mass, I 

hope, in the House and the Senate. You have a President for the 

first time since the 1980s who ran explicitly on regulatory reform. 

You have various agency heads who he has nominated, some of 

which the Senate has already confirmed, who have said that driving efficiencies into their departments is one of their priorities. 

Again, I harken back to the conversation I had earlier this week 

with General Mattis where I assured him that he could count on 

me to help look at the top-line defense needs. If I could count on 

him to help look at driving efficiency in the DOD, I look forward 

to being his partner in that. 

So I think we have finally reached a critical mass where all of 

the stars have aligned and we get a chance to actually reform our 

regulatory process and environment. 

Senator HOEVEN. In regard to some of the questions asked by the 

Ranking Member, you do have a reputation in the House as somebody who speaks truth to power pretty directly and have been more 
50 

than willing to get out there in uncomfortable situations and say 

just exactly what you think and be very transparent about it. 

Mr. MULVANEY. That may be the nicest way that anybody has 

ever described it. 

Senator HOEVEN. And then talk about P3. I have spent a lot of 

time working on P3 projects, particular U.S. Army Corps of Engineers. They have a huge backlog. But with P3, we have an opportunity for States and localities that have funding ready to go and 

have private sector companies that want to co-invest in some of 

these innovative infrastructure projects that may be a way to reduce the Federal cost share and cut into that big backlog. And we 

need to build infrastructure in this country very badly. And the 

Trump Administration has made this an absolute priority, and it 

is a priority for us. So talk a little bit about your sense of P3 

projects. 

Mr. MULVANEY. Not only has the President made it a priority, 

from what I know about some of his nominations to key Cabinet 

positions, he is actually seeking to hire people who know a great 

deal about this. So I get every impression, again, that the President is deadly serious about figuring out new and creative ways 

specifically to build infrastructure, and public-private partnerships 

do offer an opportunity to do just that. 

Under the theory of speaking truth to power, I will tell you my 

reservation, but the one thing I will be looking out for at OMB is 

to make sure that when the government does partner with private 

industry, that we do in a way that is entirely transparent so as to 

avoid any appearance of impropriety and giving favors to well-connected corporations over those who have perhaps fewer relationships. 

Senator HOEVEN. Well, transparency is very important, and 

clearly this Administration wants to be creative and move forward 

on infrastructure. At OMB, you will play a key role in making sure 

we can do it, doing it right, doing it in a transparent way. But you 

will have a big role to play there. My understanding is that you 

are supportive of not only the infrastructure development but looking at these innovative ways to make things happen. 

Mr. MULVANEY. Oh, I have told the President—not the President 

because I have not had a chance to talk with him directly, but I 

have told other nominees and folks in all of these committees that 

I would support an infrastructure program. I think it is one of 

those appropriate functions of government in many circumstances. 

I am interested in how it is going to be paid for. I am not interested in seeing us blow a $1 trillion hole in the balance sheet in 

order to accomplish this, but I think I will give the President’s 

transition team some credit. I have seen some very creative ideas 

on how to pay for things, including public-private partnerships. 

Senator HOEVEN. Well, and that is the key, is it not? Finding a 

way to do it and pay for it and get the economy growing. I think 

it all goes together. 

Mr. MULVANEY. Yes, sir. 

Senator HOEVEN. Again, thanks for being here today. 

Mr. MULVANEY. Thank you for having me. 

Chairman JOHNSON. Thank you, Senator Hoeven. 
51 

By the way, I totally agree with you. Over the last 6 years, it 

has been almost universal. The first thing out of anybody I meet 

with, they are talking about what can we do to reduce the regulatory burden. The good news for you is the President has set a 

pretty low bar, only a 75-percent reduction. Actually, I would call 

that a ‘‘stretch budget.’’ Senator Hassan. 

Senator HASSAN. Thank you very much, and, Congressman, 

thank you for putting up with a long stretch of questions. You have 

had a long day, and I appreciate that very much. And I just wanted 

to follow up quickly on a couple of things and then just ask one 

question. 

There has been a lot of discussion about reforming Medicaid and 

flexibility in the program, and should you be confirmed, I would 

like to offer to work with you on that since, in my experience as 

a Governor, there has been a lot of flexibility in the Medicaid program. We are going through an 1115 waiver process right now in 

New Hampshire, which is really allowing us to integrate our behavioral health and primary care in ways that are very promising. 

And so before kind of throwing the baby out with the bath water 

here, you might want to learn from Governors who are currently 

working well with the Federal Government and finding that the 

government is willing to be quite flexible to help us meet the needs 

of our States. 

Mr. MULVANEY. I absolutely welcome the opportunity to do that. 

Senator HASSAN. Well, thank you. 

The question I wanted to ask was on climate change. Earlier 

today, it is my understanding that you had an exchange with Senator Kaine about climate change. I obviously was not there, but my 

understanding is that you told him that you agreed the climate is 

changing, but the science on how much impact humans are having 

is unsettled. 

Mr. MULVANEY. I do not think that is verbatim, but that is a fair 

recalculation, yes, ma’am. 

Senator HASSAN. OK. So I am a little concerned with that because, first of all, the OMB Director does have a significant role to 

play when it comes to climate change. You need to know the 

science in order to allocate the budget effectively. You need to know 

the science in order to run the OIRA process effectively. You just 

had a really good exchange with Senator Portman about the importance of data and evidence-based policymaking. 

So here is what scientists say. They are clear in their understanding of the climate change science. The American Association 

for the Advancement of Science says the scientific evidence is clear. 

Global climate change caused by human activities is occurring now, 

and it is a growing threat to society. 

The American Geophysical Union said humanity is the major influence on the global climate change observed over the past 50 

years. 

The American Meteorological Society says it is clear from extensive scientific evidence that the dominant cause of the rapid change 

in climate of the past half-century is human-induced increases in 

the amount of atmospheric greenhouse gases. 
52 

The Intergovernmental Panel on Climate Change says warming 

of the climate system is unequivocal and human influence on the 

climate system is clear. 

So I would like to understand what you find unclear about this 

science that these scientists have been so clear about and why you 

or I, with our non-scientific backgrounds, would be qualified to disagree with these climate scientists in their area of expertise. 

Mr. MULVANEY. It is fair enough, and, again, every time I have 

a conversation about climate change—I had some very, as you can 

imagine, colorful conversations with Senator Sanders about this in 

his office. I will try and figure out a way to draw it back to OMB, 

and the way I do that is by recognizing the fact that OMB may be 

called upon at some point to give an opinion on some type of regulation regarding carbon, for the sake of this discussion. OK? 

In my role as OMB Director overseeing the Office of Information 

and Regulatory Affairs, it would be my job to look at exactly what 

you have just laid out and also look at those folks who have other 

sides of that opinion and then try and balance that with things 

such as the costs related with the regulation, bearing in mind in 

particular that regulatory costs have been described as some of the 

most regressive costs that we have. It falls on the poor much more 

than it does on the rich. 

So it is a complex dance that the OMB Director has to do before 

giving the President an opinion. Do I bring certain biases to that? 

Yes. Would you? Certainly. That is what we do. It is the nature of 

our business. But my job would be to take that information that 

you just laid out, see if there is other information that may be to 

the contrary, and try and give the very best summary to the President of the United States as I possibly can. 

Senator HASSAN. And I respect that. I would ask you to look at 

peer-reviewed science, not—— 

Mr. MULVANEY. Yes, ma’am. 

Senator HASSAN [continuing]. Industry-based attempts to mask 

the science, which we have seen a fair amount of. And in terms of 

regulatory burden, I have worked as a Governor, we have all 

worked to reduce regulations. But, when you talk about burdens, 

when we have polluted air, more kids get asthma. When more kids 

get asthma, especially if they are low-income and especially if we 

do things like repeal the Affordable Care Act and they cannot get 

access to primary care and health insurance, that costs us money 

in different ways. There is a reason my business community in 

New Hampshire supported Medicaid expansion so strongly, because 

they understand the value of a healthy workforce. 

When we do not have clean water, that costs us enormously, and 

it particularly costs low-income families who do not have the budgets to go out and buy bottled water. Right? 

So I just would ask you to think about the balance in terms of 

regulations, not just with a dollar amount and not just from 

concerns that I understand—I was a business attorney for 25 

years—about how hard it can be to navigate regulations when you 

are running a business and the impact that that can have. 

But there is an impact on families. There is an impact on natural 

resources. There is an impact on the economy. I can tell you, the 

maple sugarers in New Hampshire feel the impact of climate 
53 

1The information submitted by Congressman Mulvaney appears in the Appendix on page 66. 

change, and so does my ski industry. And so it really behooves us 

to listen to the scientists, the predictions they made about climate 

change, and the impact of human behavior on it decades ago is 

playing out in front of us. So we might want to really just start listening to them. 

Mr. MULVANEY. Thank you, Senator. 

Chairman JOHNSON. Thank you, Senator Hassan. 

Congressman Mulvaney, you have had a long day in the witness 

chair, not only in this Committee hearing but also in the Budget 

hearing, so this is a pretty good time to end your day. I want to 

thank you for your testimony, for being willing to subject yourself 

to this process. I want to thank you, your wife, Pam, and your 

three children for your willingness to sacrifice your time and your 

willingness to serve this Nation. So I really do appreciate it. 

The nominee has made financial disclosures and provided responses to biographical and prehearing questions submitted by the 

Committee. Without objection, this information will be made part 

of the hearing record,1 with the exception of the financial data, 

which are on file and available for public inspection in the Committee offices. 

Senator McCaskill, I will again reiterate my commitment that we 

will not hold a markup—— 

Senator MCCASKILL. Thank you so much, Mr. Chairman. 

Chairman JOHNSON [continuing]. Until we get that background 

check. And, Congressman Mulvaney, you will agree to answer any 

questions that might arise from that. 

Mr. MULVANEY. Absolutely. 

Chairman JOHNSON. With that, the hearing record will remain 

open until 5 p.m. tomorrow, January 25th, for the submission of 

statements and questions for the record. 

This hearing is adjourned. 

[Whereupon, at 4:59 p.m., the Committee was adjourned.] 

(55) 

A P P E N D I X 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 
107 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 
119 
120 
121 
122 
123 
124 
125 
126 
127 
128 
129 
130 
131 
132 
133 
134 
135 
136 
137 
138 
139 
140 
141 
142 
143 
144 
145 
146 
147 
148 
149 
150 
151 
152 
153 
154 
155 
156 
157 
158 
159 
160 
161 
162 
163 
164 
165 
166 
167 
168 
169 
170 
171 
172 
173 
174 
175 
176 
177 
178 
179 
180 
181 
182 
183 
184 
185 
186 
187 
188 
189 
190 
191 
192 
193 
194 
195 
196 
197 
198 
199 
200 
201 
202 
203 
204 
205 
206 
207 
208 
209 
210 
211 
212 
213 
214 
215 
216 
217 
218 
219 
220 
221 
222 
223 
224 
225 
226 
227 
228 
229 
230 
231 
232 
233 
234 
235 
236 
237 
238 
239 
240 
241 
242 
243 
244 
245 
246 
247 
248 
249 
250 
251 
252 
253 
254 
255 
256 

Æ