By Peter Nicholas and Nick Timiraos 

WASHINGTON -- When health-care reform collapsed in Congress last month, President Donald Trump's budget director, Mick Mulvaney, says he felt he deserved much of the blame.

He apologized to the president for failing to grasp the divisions inside a Republican caucus in the House of Representatives that he had been part of for six years as a Congressman. The depth of mistrust between conservative and moderate factions within the GOP was nothing he had foreseen, he says, and hampered his role as a White House emissary on one of the administration's top priorities.

"I told the president that I feel like I let him down on the first run through at health care," said Mr. Mulvaney in an interview in his office across from the White House. "I completely misunderstood and misread the tensions in the House....So, I think one of the biggest people to blame for the failure of the health care bill was me."

The collapse of the health-care push appears to have done little to diminish Mr. Mulvaney's standing in an administration known for its intramural fractiousness. White House chief strategist Steve Bannon calls him a "rising star" who "knows the math and the Hill."

And it is Mr. Mulvaney who is taking the lead role in negotiations with Congress over a spending measure that would avert a partial government shutdown at the end of this week, coinciding with the president's 100th day in office.

He made a late push to include in the spending bill funds to start construction of a wall along the border with Mexico -- a central campaign promise of the president. Facing resistance from lawmakers, however, Mr. Trump on Monday night said he could wait until later in the year for money to build the wall. Lawmakers and the White House continue to wrangle but few expect the government shutdown to take effect this weekend.

After that, Mr. Mulvaney's ability to navigate Capitol Hill will again be put to the test. It will be up to him to present Mr. Trump's initial budget proposal for the fiscal year that starts in September. That blueprint could form the basis of a congressional budget resolution that Republican leaders want to use to advance a sweeping tax overhaul through Congress by year's end, a feat that would fulfill another of Mr. Trump's key campaign pledges.

Mr. Mulvaney, 49, was first elected to a South Carolina House seat in 2010 as part of the Tea Party wave. He was a founding member of the sharply conservative House Freedom Caucus, a faction that helped scuttle Mr. Trump's health-care reform effort.

While serving in Congress, he embraced spending cuts and voted against keeping the government funded and raising the debt limit, putting him at odds with party leaders. In his new role, he has clashed with his former Freedom Caucus colleagues as he implements the agenda of a president who is much less wedded to conservative economic doctrine.

Rep. Mark Sanford, a fellow South Carolina lawmaker and Freedom Caucus member, told The Post and Courier in Charleston, S.C., that Mr. Mulvaney had threatened to help unseat him as payback for refusing to support the health-care overhaul.

Mr. Sanford said Mr. Mulvaney told him, "'The president asked me to look you square in the eyes and to say that he hoped you voted no on this bill so he could run [a primary challenger] against you in 2018.'"

A spokesman for Mr. Mulvaney said Mr. Sanford's characterization of their conversation wasn't "entirely accurate," but added, "It is true that the president at that time was not entirely pleased with the congressman's unwillingness to work with him on the health-care bill."

Mr. Trump hired Mr. Mulvaney after a 20-minute talk on their first meeting during the presidential transition, according to a person familiar with the matter. Mr. Mulvaney plays down differences with the president, with whom he meets several times a week.

"I was talking to some of my Freedom Caucus guys and they were like, 'Oh, you're getting your ass kicked over there,'" Mr. Mulvaney recalled. "And I'm like, 'Guys, I've got some news for you. I got my ass kicked when we were in the House together.'"

While he may still lose arguments, he added, "At least now I'm in a position to make them to the president of the United States."

Three weeks ago, Mr. Mulvaney presented a list of entitlement spending changes for the president to review for the release of next month's budget proposal to Congress, complete with columns showing how much various cuts would save.

Mr. Trump went down the list, agreeing to some while resisting others, he said. "'Yes. Yes. No, no no -- that's Social Security, I promised people I wouldn't touch that. Yes. Yes. No -- that's Medicare, I'm not touching that one,'" Mr. Mulvaney recalled the president saying.

A few weeks before, Mr. Mulvaney had briefed the president on a list of politically sensitive cuts in a preliminary budget blueprint to offset the higher cost of increased Pentagon funding.

The proposal cut funds for the Corporation for Public Broadcasting and the National Endowment for the Arts. "I said, 'Mr. President, the next page is a little tough. I know you've got a lot of friends who are in the arts world,'" he recalled. After explaining his rationale for the cuts, he said, Mr. Trump agreed.

Mr. Mulvaney has dropped 12 pounds since he became director of the Office of Management and Budget -- not, he says, because of stress but because he enjoys the job so much he forgets to eat. He relies on Skippy peanut butter and jelly sandwiches he makes in a kitchenette in his office suite. In the cupboard is a glass he grabbed from the Oval Office one day -- and promises to return.

Earlier this month, Mr. Trump invited Mr. Mulvaney to golf with him at his course in Northern Virginia. Mr. Mulvaney says the president beat him fair and square. But it was Mr. Trump's playing partner, Sen. Rand Paul (R., Ky.), that Mr. Mulvaney told the president he had his sights on.

"I made it very clear to him on the first tee when he picked Rand Paul as his partner that all friendliness was set aside," Mr. Mulvaney said jokingly. "I'm not going to let Rand Paul beat me at anything. I crushed Paul by the way. I beat him by 15 shots. He was terrible."

Mr. Paul recalled it differently: He told reporters after the game that he and the president were ahead of Mr. Mulvaney and his partner but gradually lost their lead and it ended in a tie.

--Kristina Peterson contributed to this article.

Write to Peter Nicholas at peter.nicholas@wsj.com and Nick Timiraos at nick.timiraos@wsj.com

(END) Dow Jones Newswires

April 26, 2017 05:44 ET (09:44 GMT)

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