District of south carolina, a beautiful district in the northcentral part of the state but also had been a part of the Freedom Caucus and incredibly well connected and a part of house leadership and administration which needs and a bit short of great congressional leadership and guidance. Of course im talking about director of the office of management and budget, mick mulvaney. If you could come out and be interviewed by kristen silverberg, my colleague. [applause] im wondering what socks i wore today. They look good, they look good. Colorful. [laughing] well, thank you for being you. You pin point 1000 miles an hour since yo he took office so were incredibly grateful you are here. I wanted to start and just ask you come he been in washington for about a decade, sort of these fights before. But you switched hats. Whats the Biggest Surprise about going from congress to your current position . We worked a lot more. 16 hour days at the white house is not at all unusual. Sometimes i joke with my friend 16 hours a week on the hill were heavyduty. In all seriousness it is a lot more work. We interview people to come to talk to omb who come from theyll come the first to tell that is what this real job. I think i worked seven consecutive weekends when i first got here. So i know the Public Sector gets a bad rap sometimes are not working private sector hours but i can show you omb and in all of the white house we do and thats one of the big changes. The suit are a lot nicer, as you can probably imagine. But generally its the same subject matter trickier still work on Health Care Comes to working with trying to fund the government, working on migratory reform. The subject matter is think the department is very, very different. To a Founding Member of the Freedom Caucus to your credentials are very wellestablished. But what can you tell us about the president s he on deficit . Thats a great conversation about deficits. The president understands, theres a lot of really neat things about having a businessman in chief which is what the price it really is. Its the first time we had a true businessperson in the office in a long, long time. During my lifetime. He understands for example, that the one thing that can put a completely wellrun, wellfinanced company in dire straits in a very short period of time is being into one place of longtime with the wrong interestrate exposure too much debt. He completely understands that the challenges and risks that having too much debt can take on. On. At the same time he also understands that spending is not the only way to solve our deficit problems. Hes very focused and h think yu should be unEconomic Growth. I know steve talked about that, gary talked about the day. That is every thing is really, my world turns around, spending and Economic Growth. His is driven for syphilis for Economic Growth. Everything we do almost is looked out to that lens, that perspective. How can we get people back to work . Advocate job participation in the workforce participation back up . Advocate people paying back into tax system . How do we get people paying back into the social speedy system . That really drives about everything he talks about which is the consistency is quite refreshing. There seems to be concern into submission asi about the Economic Growth agenda but on the budget side. All those hotly contested . You have the fiscal hawks, moderates, selfdescribed economic nationalists. When you get into them to settle on for example, the skinny budget, how hard are you fighting with your colleagues . When i was offered the job i asked the question. I said, look, the president and i may disagree from time to time on things. Are you looking for a yesman indisposition or any position . Are you looking for some intellectual about recent dissent . I was told not only was to send welcome, it was encouraged. The president wants to find itself with really, really smart people who dont agree on everything and sort of lettuce hash it out. I think as a result of a policy of been some of, look at the skinny budget for example. The skinny budget is certainly a budget that part of it reflects me. When you look at the fact it doesnt add to the deficit that you come that something might expect from a member of the Freedom Caucus. At the same time theres a huge increase in defense spending. That is the president first and foremost a thats when he ran on and thats what he wanted to do. Theres more money in the skinny budget, for example, for border enforcement for the wall along the southern border. That is entirely the president. You have more money in there, for example, for school choice. Thats come up those are variety of folks with different background from different perspectives, together and in result i think is a really excellent articulation of the administrations policies. One of those issues where there is a potential divide between that thank you very much the Freedom Caucus and the president is on infrastructure spending. Gary was here and he gave us a little hint about what you might find out. Can you tell us we are currently on an infrastructure package . Sure. I saw gary. I said i had a secret plan to 77 . I let him know about that when they get back to the office. The infrastructure is in its early discussions, we were talking about since the election. We sort of sense that they the president came to office have looked at things in a particular order. We thought healthcare would go first, then tax reform, then infrastructure. Theres a variety of reasons for that fix some of which would bore you to tears regarding very Arcane Senate rules about reconciliation and what needs 60 votes in the senate versus 50. 50. The fact of the matter is we have and work on infrastructure since the very beginning, and i dont think you will actually start to see specific things to be able to vote on until the fall. That said, you ask gary a question but that the deficit or i get this the time. As the resident budget hawk, people ask me which mullaney, how you come you add one twin dollars to pay for this trying time for the infrastructure. I think the answer is no. We will spend the money. I give gary and stephen tremendous credit for understanding leverage, and when you see details on our budget what u. S. He is 200 billion number or infrastructure with the understanding it would be a five to one leverage ratio. Thats something that the folks in the private sector brought ideas to the table that, regarding a structure specifically that i doubt have been in the white house before. And that truly invigorating to folks who have done these types of deals, these large deals on a global scale into the white house and say look, heres how we can get a five to one return on our money. Thats very exciting from a stent but if someone looking for Economic Growth. But when you look at the impact of the deficits, i personally have always looked at spending in different categories. Spending on wealth transfer payments is horribly inefficient and leads to a tremendous this allocation of resources we do it. We choose to do we do for social reasons but when it comes to creating Economic Growth, sometimes they can even be counterproductive because of the inefficiency in wealth transfer payments, typical social spending. At that middle level of sort of maybe it sometimes can be even good spending is infrastructure. Even if you do have a government miss allocate resources to a certain extent you still something to show for it and likely to Economic Development and then probably can dramatically increase Economic Growth. At the third level which is the best spinner you could have simply letting people keep more of their own money. Thats the most efficient allocation of resources. Does that mean taxes and add to the deficit . Maybe. But at the end of the day with everything youre doing is driven by this interest in having a healthy and growing economy, you sort of look at those three things through three different perspectives. When youre thinking about a trillion dollars which expected quite rated toy relief or is the trillion the combination of Government Spending plus leverage by spanish i think the president is putting one twin dollars worth of work on the ground. The regulatory relief comes from the bank for the buck. Even that if the State Government wants to build a new road they have to deal with some of the same like all of the same apartment of a galatians that a private developer does when they built something. If we can forget way to fix that we get even more bang for that trillion dollars. You may see and it impact if he did apples to apples. We spend 1 trillion on infrastructure with Regulatory Reform you might get as much real hard for such improvements as the Previous Administration might get with 1. 1. 6 trillion worth of spending. Some no, we dont come its not come we dont fudge that number. The president wants 1 trillion worth of work on the ground and we expect to give it to spur use im wondering whether there are also in entitlement programs on the table either this budget for Going Forward on medicare, medicaid or Social Security would you expect to put some cuts to those programs on the table . Certainly lets deal with each of those, lets do medicaid first really when you talk about medicaid reform its wrapped up in the discussion where having about the Health Care Bill, the American Healthcare act, the repeal and replace for obamaca obamacare. Deals with reforming medicaid and such with a try tremendous savings. Does doing so in a way that makes complete sense. I was in the state legislature for a brief time before washington d. C. And o and we uso cringe every single year of at the size of the line item in our state budget for medicaid. No one talked to governors and ask them whether popping up when line item is and its most likely in all states medicaid. It was one of these one size fits all would come and say look yet either use plan a brc to provide healthcare to your need is citizens. Are like that looks really great if you live in new york or chicago or los angeles but we have a rural more population in south carolina. We got other ways that we think we can provide for our neediest citizens and do it in a much more efficient fashion that can cost the state less money. Better results for less expenditure. The federal government told us to go pound sand. They told us would welcome to do whatever we wanted to but if we wanted the federal matching money w where to do it their wa. One of the biggest things that doesnt get any attention in the American Health care act is we get rid of that in large part of the give commence amount of control to the states over how to run a medicaid plan, the options are available. That drives tremendous longterm savings. Right now in many cases states at apsley no financial interest, no physical interest in keeping medicaid costs down because they figure out a way to game the system where the federal current pace for 100 of of the cost. We talk about matching and state matching but they figure out a way around it by doing provider taxes and so forth. In essence the government takes up one of of the cost. Theres no incentive at the state level to reduce costs and you can imagine what does to total medicaid spending. We fixed that any American Healthcare act. The extended questions with a willing to talk about reforming medicaid, yes. Talk about Social Security and medicare. I laid out a list of potential mandatory reforms to the president on a piece of paper. He looks at that and says that Social Security, that is a later time it comes that is Medicago Ukip touched it. He said that the post i made when i went and im going to keep my promise. Even for people my age . Even for people make much money as gary cohn does because i was example i used with that. He says i made a promise to people that are not go to touch so secured and medicare, not touch oldage retirement, not quite attached medicare system that folks have become to count on. I respect that. Again not what i would do if i were in charge but im not in charge and had the ability to lay out the option to 87 yes, yes yes, no, no, no. Yes, no. Based upon what he thought the Party Organization to be. Very refreshing to have that level of candor from the president. And have him be that into do what he promised. Look, i promise people i wouldnt do this. Im not going to fit i promise people and we do this and im going to do that. It makes it a lot easier to manage to if you know what the boss stands, it really does make it a lot easier to do your job. Thats been a lot of fun. Running up against a big date on the calendar next friday, the current resolution for funding the government expires. Congress will have to take action. Theres a lot of potential publications including the democratic demand that some of the obamacare subsidies be dealt with. Im wondering how the administration approach that come what is your strategy and what he think the final bill is good conduct . I wont go to the details because were in negotiations right now with the appropriato appropriators, the folks the rent and spending committees in both the house and senate and both republicans and the democrats. I really think what youre going to see is this is the first real test of whether or not the democrats specific in the senate are interested in negotiating, interested in compromise. It was make clear to us in the beginning anything we did on Obamacare Repeal and replace was going to be on our backs entirely. Theres not a democrat who woud take a vote to repeal president obamas signature piece of legislation from his term in office. We knew from the very beginning it had to be a republican all the go and thats what it is perceived as there when you talk about funding the government, theres an opportunity for us to work together. What we are focusing on is we have our list of priorities. Wont surprise anyone want some of them are. We want more money for defense, build affordable, more money for Immigration Law enforcement. The democrats may have some other own priorities. It indicated making some of these payments for the obamacare subsidies is one of their priorities. Okay, thats fine. Were willing to bet that discussion if they want to have it and thats what we telegraph. If they are watching, call a spirit we are ready to talk about this. I will be curious to see how to respond. If they tell us to pound sand, i think thats probably a disappointing indicator of where the next four years is going to go. If they tell us that they recognize President Trump won an election and he should get some of his priorities funded for that reason, elections have consequences as folks who went always like to say, at the same time we understand they have a certain amount of leverage innocent because we do need 60 votes so we need some sort of bipartisan support in the senate. They are entitled under that set of circumstances to get some of their priorities funded. It is ripe for some type of negotiated agreement that gives the president some of his priorities and democrats some of their priorities. We think weve opened the door. I know that we have. And all your former colleagues in the Freedom Caucus prepared to see some of the democratic priorities, youre in such unique position because you know President Donald Trump really well and also your Freedom Caucus colleagues i think my colleagues get a bad name for at least the group that i helped found gets a bad name. People have pointed to the Freedom Caucus as the reason the Health Care Bill failed. I think thats wholly inaccurate. We had a really good with count in our office in the white house over who was supporting the bill and who wasnt. About half of the Freedom Caucus supported the bill. Half of the people did not. At the same time theres some centrist leaning republican groups in the house and some of them support the bill and some of them did not. We had 36 knows where it counted at the last count before additiobefore thedecision was mo the floor and roughly half were in the Freedom Caucus and half were not. I think that narrative the Freedom Caucus is to blame is not entirely accurate. As to whether or not theyre willing to support the spending bill, or willing to support in other piece of legislation, i know what theyre going to do because i was one of them. They will look at each bill on its particular marriage. It also are eager to hope the president get his party responded particular marriage. There are some folks come some of his support of President Donald Trump in the president ial campaign were in the Freedom Caucus. His priorities are their priorities when you talk about funding the wall, talk about funding defense. This is a big deal for some of those numbers. I think that youll see support if we get a chance to bring something to the floor. On this same thing will have a debt ceiling vote sometime in i have heard of that one as well. We asked secretary mnuchin about it, particularly talked about these extraordinary measures hes using to get us up to the fall and at some Point Congress want to book a what is the admission she think about to approach that . Would you like to see a clean debt ceiling increase . Would you expect to attach some provisions to it . Wi