By Kate Davidson and Richard Rubin 

White House budget director Mick Mulvaney said Wednesday the administration is open to extending the 10-year budget scoring window for its tax plan to get around congressional rules that forbid bigger deficits after a decade.

That move might help Republicans get their tax and fiscal policies to comply with congressional budgeting rules that would otherwise limit them.

Sen. Pat Toomey (R., Pa.) floated the idea last month to overcome obstacles posed by the process known as reconciliation, which lets a tax cut pass on a majority Senate vote but prevents additions to long-run deficits.

Mr. Mulvaney told a House panel that Congress should be able to extend the window without changing the law. "We are exploring the possibility of also looking a little further out, especially when you start to talk about changes in mandatory spending," he told lawmakers at a House Budget Committee meeting.

The benefits of changes to mandatory spending often don't show up within the first decade, he said. "I think it's a more reasonable way to look at the budget window," he said.

Mandatory spending, including programs such as Medicare, Medicaid and food stamps, aren't subject to annual appropriation. A longer budget window could let Republicans get fiscal credit for proposals that are enacted now and then are phased in and don't take effect for many years in the future.

Mr. Mulvaney also insisted the administration isn't double-counting the revenue that it is claiming from faster economic growth. He said the tax plan itself would be revenue-neutral because the administration would limit tax breaks.

That represents a significant shift for the administration, which has repeatedly said that it is backing huge tax cuts and that growth caused by the tax cuts would offset some of the fiscal cost of the tax plan. The administration hasn't specific enough limits on tax breaks to offset its tax rate cuts.

The budget director also defended the administration's decision to leave Social Security and Medicare largely untouched in a budget proposal released this week, but said even he was skeptical officials could balance the budget.

"It's probably the last time," he said. "It would be very difficult in the future to do that because of the role those programs do play in our future spending."

The White House spending blueprint released Tuesday imposes deep cuts to mandatory spending programs such as Medicaid, food stamps, disability insurance and student loans. The proposal also projects tax cuts will help generate significant economic growth and enough revenue to help eliminate the deficit over the next 10 years.

Mr. Mulvaney said this week the budget was designed around President Donald Trump's campaign-trail promises, including his commitment to boost spending for the military and his pledge not to cut Social Security and Medicare.

But deficit hawks have already criticized the plan for refusing to tackle the two biggest drivers of government spending, Medicare and Social Security, which are projected to continue growing rapidly in the years ahead.

"That means in 10 years we are going to have to look at Social Security, Medicare, again look at Medicaid perhaps, to be responsible and sustainable again because those three programs are eating up so much of our budget," Rep. Todd Rokita (R., Ind.) said.

Rep. Tom Cole (R., Okla.) added, "That math can't be sustained, and it will crowd out eventually defense and other important areas."

Mr. Mulvaney acknowledged lawmakers would be "hard-pressed" to address the country's long-term debt problem without also tackling mandatory spending programs.

Republican lawmakers praised the administration's efforts to balance the budget, but also raised concerns about cuts to regional economic development programs and medical research, and a plan to overhaul the air-traffic control system.

Mr. Cole said proposed cuts to the National Institutes of Health and Centers for Disease Control and Prevention were "penny-wise and pound-foolish."

"Sometime in the president's term you will have a pandemic," he said. "Cutting the CDC I think leaves you very vulnerable and the American people very vulnerable."

He also defended the budget's rosy economic projections, which assume sustained economic 3% growth starting in 2021, a much faster pace than the Congressional Budget Office has forecast.

Write to Kate Davidson at kate.davidson@wsj.com and Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

May 24, 2017 12:20 ET (16:20 GMT)

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