Mnuchin in the Middle: Between Trump and Democrats

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It was hopeless, and he knew it, even before he started talking.

The junior senator from Kentucky walked to the floor to deliver a melodramatic eulogy. “Can you hear it? Can you hear the somber notes, the feet shuffling, the solemn tones?” Rand Paul asked his colleagues last July 31 as they prepared to vote on a $2.7 trillion spending deal. “It’s a dirge, a funeral march; it’s the death of a movement.”

“Today’s vote will be the last nail in the coffin,” he continued. “The Tea Party is no more.” And then, the Senate voted, 67-28, to suspend the debt ceiling and advance the spending package, which Paul had warned would further explode the nation’s $22 trillion debt.  

If anyone was hammering nails into the coffin of the grand old claim that the Grand Old Party was the one of fiscal responsibility, it was the secretary of the Treasury Department. More specifically, the Republican Treasury secretary.

When the White House wants to win over Democrats, President Trump sends in Steve Mnuchin. He has suspended a debt ceiling and quarterbacked a trade negotiation and most recently guided the $2.2 trillion Coronavirus Aid, Relief and Economic Security  package through Congress. With more aid coming, some conservatives in the White House and on the Hill quietly complain that Mnuchin is the fox guarding the fiscal hen house.

They don’t go on the record, and for good reason.

While the life of other Cabinet secretaries can be brutish and short, Mnuchin enjoys rare job security. Many of his colleagues have been forced to resign. Others have been publicly humiliated, fired over the phone while on the toilet or left behind on the tarmac. Not him. There were some slight scandals — the expensive flights on military jets and that egregiously out-of-touch photo shoot with his wife and the sheets of freshly printed dollar bills. But neither stuck, and it’s easy to understand why.

“Despite the concerns of conservatives,” a senior House aide told RealClearPolitics, “it is clear that he has the trust of the president, which makes him a unique figure in the Cabinet.”

Complaining about Mnuchin might mean jeopardizing access to the White House or, worse, endangering a clear line to the Treasury Department as the secretary doles out aid. And so, Republicans complain about the product without publicly mentioning the man who guides the process. 

A spokesman for Sen. Paul declined to comment, but he isn’t alone.

“I’m not interested in any more of Speaker’s Pelosi’s spending porn — or any other member of Congress for that matter,” Sen. John Kennedy said on “Fox & Friends” shortly after the relief packaged passed. “Unless you were throwing the Frisbee in the quad during Econ 101,” he continued, “deficits matter.”

A spokesman for Kennedy did not return a request for comment on the record.

But if anyone is playing Frisbee, as Kennedy suggested, it would be Mnuchin and Pelosi. Drew Hammill, deputy chief of staff to the speaker, documented their correspondence in real-time. While Trump and Pelosi are not talking due to their feud, Mnuchin and the speaker talked on no fewer  than 10 different occasions as House Democrats held up the stimulus bill.

The result of those negotiations: $2.2 trillion in relief that included cash for the National Endowment for of the Arts ($75 million), a fat bailout for the Kennedy Center, which still furloughed hundreds of staff ($25 million), and hefty payment to NASA ($60 million).

And there was more than money. As RCP first reported, a union provision was tucked into the bill that had nothing to do with combating coronavirus. Businesses with 500 to 10,000 employees that accept a government relief loan are now required to remain neutral if their workers try to organize.

Trump left the ugly business of sausage-making to Mnuchin and overlooks spending his conservative base would find unseemly. Anything he finds objectionable in the bill, the president insists, is just the price of doing business. “This is the Democrats -- that’s the way they play,” he said on “Fox & Friends.” “We need their votes. They have the House. We had to take care of people.”

No one doubted the need for immediate relief, and the pandemic package advanced out of the House by voice vote. But some conservatives note this isn’t the first trillion-dollar piece of legislation that Mnuchin has delivered, and they point to the July 2019 bill that suspended spending limits that Paul blamed for burying the Tea Party. These two examples, one prominent House Republican representative told RCP, have brought him to an unavoidable conclusion: “I think that he is out of his lane.”

Mnuchin made his money in banking at Goldman Sachs before turning his interest to film producing. He handled the money partnering with 20th Century Fox and Warner Bros to produce dozens of films. Some were more successful than others. “Mad Max: Fury Road,” a story of post-apocalyptic survival starring Tom Hardy, was a hit. Others, like Sandra Bullock’s “Our Brand is Crisis,” about an American political consultant trying to fix the Bolivian presidential election, flopped. Aside from brief mentions in rolling credits, Mnuchin was little-known and his civic involvement was limited to cutting checks to prominent politicos such as Hillary Clinton and Mitt Romney.

It wasn't until after a last-minute invitation to a Trump primary victory party in 2015 that Mnuchin switched to politics full time. He became national finance chairman of the Trump campaign and, later, secretary of the Treasury.

It is remarkable start for a political rookie. Some worry it’s not enough to go against an ace like Pelosi.

“He's probably pretty terrific on the technicalities of high finance,” the Republican said. But stepping to the plate against a seasoned negotiator like the speaker, the representative continued, requires discipline. “She may have lost some of her fastball, but she certainly still has a curveball and a slider.”

Mnuchin places a premium on winning Democratic approval for legislation. The 2019 debt deal that the secretary negotiated, for instance, passed the House on back of Pelosi’s caucus, while a majority of Republicans opposed it. He wants to make a deal just like his boss promised to do during the campaign, and Mnuchin, despite his ideological naysayers, has delivered. Unlike Trump, though, he can sit down with Pelosi. They even have their own way of talking.

“We listen to each other. And we kind of speak shorthand to each other because we don’t waste each other’s time on niceties or anything like that,” Pelosi told reporters as the relief package was being negotiated. Why not just speak to Trump directly? “There was no need for that,” Pelosi said of negotiating with the man she has been more than cool toward for months. It has left conservatives on the Hill feeling overlooked and taken for granted. “When you are negotiating a big deal you never start by handing the other side their preferred negotiating partner,” a senior House aide told RCP. “Mnuchin starts with more in common with how the Democrats view the world then how Republicans view the world, and that is concerning to conservatives in Congress.”

This is all too familiar to one former White House aide who said Mnuchin was in the habit of bragging about his relationships with Democrats on the Hill while overlooking Republicans. “Sending him to negotiate is like waving the white flag of surrender before the battle has even started,” the former aide told RCP. And according to a White House official with knowledge of the relief package negotiations, Mnuchin has a singular focus: the stock market.

“We are more interested in bipartisanship,” the current aide explained, comparing how the current and previous administrations dealt with the Hill, “but Mnuchin also isn’t particularly ideological.” And so, the secretary has been willing to turn a blind eye to principled objections “when the financial health of markets seems to be on the line.” A quiet frustration with Mnuchin is simmering in more conservative corners of the administration, and the pandemic has only heightened tensions. A senior administration official wondered whom Mnuchin was “representing in this deal.” There are billions for corporations and corporate lenders, so much so that the official said that whomever Mnuchin was backing “certainly wasn’t small business.”

If Democrats are going to lard up emergency legislation with add-ons, outside conservatives are urging Mnuchin and the Trump administration to make their own asks. They feel the union rule included in the last round of relief was an unfair ambush. They want it overturned, and more.

The Club for Growth has sent a memo to Capitol Hill calling for a number of regulatory relief items, including a temporary suspension of any business regulation that “imposes a burden” on U.S. businesses, charities, educational institutions, and other employers trying to restart and rehire employees. The plan would also require Trump to issue an executive order suspending all civil and criminal penalties for any violation of regulations. Those are their proposed riders, and they wish Mnuchin would give those Republican concerns as much as priority as Democratic asks.

It isn’t like the White House doesn’t have clout on Capitol Hill; conservatives say it is just a matter of will. They have hope in the newly minted chief of staff.

“Mark Meadows is a very good negotiating politician. He is able to do remarkable things, and I’m hopeful that he can basically help Mnuchin begin to understand the ramifications for the conservative cause in these deals,” a House Republican said. “But I’m not sure he’s the one who should be negotiating in the first place.”

Another congressman was more blunt, if also slightly more optimistic.

“I've never been comfortable with a with a Democrat-Wall Street guy negotiating with Nancy Pelosi, who's always more inclined to put Wall Street in front of mainstream interest,” the Republican representative explained. “That being said, it's clear that he has the president’s respect.”

Perhaps if Trump is reelected, the representative said, Mnuchin could leverage his relationships with Democrats to tackle the national debt.

But if the Tea Party is dead, suffocated by the ballooning deficits of a Republican administration, fiscal renewal seems unlikely in the next four years. Another phase of relief now sits before Congress, and according to Hill sources, Mnuchin has been signaling different things to either side.

Chuck Schumer spoke with Mnuchin Friday morning, and the Senate minority leader announced that he and the Treasury secretary had “agreed to pursue bipartisan talks with the leadership of House and Senate Democrats.” Pelosi also announced that she had talked to her new friend, recommending publicly that talks “proceed on a bipartisan basis.”

Republicans have been pushing for additional funding for small business loans, and Democrats are amenable. They just want more sweeteners on top — aid for hospitals and local government and underserved communities. Mitch McConnell has said publicly that those funds can be included in a subsequent funding package.

The delay, the majority leader concluded, was pure politics. “Nobody except Washington Democrats seems to be unclear on this fact or confused about the urgency,” McConnell said in a statement. “Republicans reject Democrats’ reckless threat.”

Mnuchin remains in the middle, Trump’s point man for negotiations. Some worry again about what additional sacrifice he will make to get another deal.

Susan Crabtree contributed to this report.

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