Every family knows that if they handled their household budgets the same way the U.S. government does, they’d be ruined, Mick Mulvaney, President Donald Trump’s budget chief nominee, said during his Senate confirmation hearing this week.
So what does that mean to the South Carolina Republican congressman’s family? After all, his financial disclosure statements indicate that he hardly shies away from debt in his private life. And by all accounts, he’s not ruined.
Mulvaney was clear when he testified before the Senate Budget Committee.
“Our gross national debt has increased to almost $20 trillion,” Mulvaney said. “That number is so large as to defy description. I choose to look at it another way: To an ordinary American family, that translates to a credit card bill of $260,000. Families know what that would mean for them. It is time for government to learn the same lesson.”
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Sometimes it’s impossible to run a household without debt. It’s impossible to run a government without debt at times, as well.
Alice Rivlin, who served as the director of the Office of Management and Budget under President Bill Clinton
Yet his disclosure statements indicate that he carries as much as $10.35 million in debt, while reporting an annual household income that might be as high as $440,000.
The disclosure statement gave only ranges for debt and income, so it’s possible his debt is as low as $2.15 million, and his family income as low as $292,000. The only certain number is his House of Representatives salary of $174,000.
Mulvaney did not respond to requests for comment.
His debt history is hardly new. Go back through his House disclosures – he’s in his fourth two-year term – and he’s been consistent in his private finances. He’s even used new loans to pay off old loans on a couple of occasions, and at least once to pay off old campaign debt.
That doesn’t make him unusual. As Stan Collender, a veteran Washington budget analyst and longtime critic of Republicans, put it, “The average American is more in debt as a percent of income than the U.S. government. Saying we would never run a household like we run the government is a good sound bite, but it’s meaningless.”
Beyond that, while the United States has about $20 trillion in debt, if it were a family looking at its financial situation the government would note that it also has almost incalculable assets, with everything from national parks to federal buildings to intellectual property to the value of providing security around the world and the U.S. economy. Mulvaney’s assets are listed at between $2.5 million and $4.6 million.
Mulvaney’s congressional website indicates that he got his business training at Georgetown and Harvard universities and experience in “the family real estate business, then started a small homebuilding company. He was also a minority shareholder in a restaurant franchise company, and even owned and operated his own restaurant.”
There is nothing illegal in the way that Mulvaney handles his finances. There are no allegations that he uses debt in his personal life in an unethical manner. But some do find irony in the fact that while Mulvaney is so intensely anti-debt in public life, he sees it as a financial tool in private life.
Robert Bixby, executive director of The Concord Coalition, a nonpartisan fiscal watchdog group, pointed out that the United States is highly unlikely to sell off Yosemite National Park to pay the bills, while Mulvaney could sell off his assets.
“I think it’s a bigger problem that we’re looking at a (budget) director . . . who didn’t pay taxes on his nanny,” he said, referring to $15,000 in payroll taxes that Mulvaney said he only realized he owed and paid 15 years late, after being nominated.
Alice Rivlin, who served as the budget director under President Bill Clinton – who presided over budget surpluses in his final years in office – said she had no doubt that Mulvaney was a highly principled person, and that he was right to be worried about the trajectory of the U.S. debt. Rivlin, now at the Washington-based Brookings Institution, said Mulvaney’s obvious concern about the rising cost of Social Security and Medicare was well placed as the baby boomers retire. She said he was correct that the long-term fiscal path of the United States was unsustainable.
“I don’t agree with his solutions,” she said. “He wants to focus on the spending side. When we balanced the budget, we focused on both spending and revenue. We also had a great economy, and that helped.”
She said she would never comment on Mulvaney’s private finances but that she did understand a simple rule about life for many Americans.
“Sometimes it’s impossible to run a household without debt,” she said. “It’s impossible to run a government without debt at times, as well.”
Budget expert Collender said it was not unfair to note the hypocrisy of a public-deficit hawk “doing what the average family does regarding debt at home.”
Beyond that, he said it raised a concern. Mulvaney won’t be making policy but responding to the wishes of Trump. Trump disclosed five loans of more than $50 million each in his financial disclosure statements.
“Looking at Trump’s plans, I think it’s clear we’re going to see more deficit and debts,” Collender said. “I think it’s fair to ask whether he (Mulvaney) will go back on everything he’s said in Congress for these past years and stay in his new job, or whether he’ll get frustrated and be the first person out of the door of the Trump administration.”