President Donald Trump. Photo: Eric Baradat/AFP/Getty Images

Both parties hate the automatic budget cuts known as sequestration. But in a closed-door Hill meeting last week, White House legislative affairs official Paul Teller said the president is fine with it.

"The president does not want a caps deal" to keep sequestration from kicking in, he told Hill staff last week. That's a direct quote, confirmed by two sources with direct knowledge of his comments.

Why it matters: Congressional sources found it bizarre that the White House isn't interested in making a deal to block sequestration. Instead, the White House says it can offset those cuts to the Pentagon by parking a huge amount of money in a controversial slush fund that sequestration can't touch.

  • Trump wants to spend a ton of money on the military and has called for a $750 billion Pentagon budget.
  • Lawmakers from both parties are outraged, and most think there's no chance Congress would approve of Trump parking more than $100 billion in the slush fund, as his budget proposes.

Behind the scenes: Teller made the comments in a weekly meeting with conservative groups, Republican leadership staff and other conservative Capitol Hill aides. Teller said it in the context of promoting Trump's budget, saying the president "really wants to stick to his numbers and doesn't want a caps deal because that means more domestic spending," said a source familiar with his private remarks.

  • People in the room didn't engage Teller on the point, and nobody encouraged him, according to a source who was there.
  • One source familiar with the comments said they showed a new hard-edged ideological direction for a White House that has never been known for its fiscal discipline. They pointed to the influence of chief of staff Mick Mulvaney — who, unlike his predecessor John Kelly, is a budget hawk. (When Mulvaney was in Congress, he criticized the "slush fund" the White House is now boosting and he was fine with cutting what he saw as unnecessary military spending.)
  • Republican lawmakers are unlikely to let the White House's hawkish position dissuade them from negotiating a spending deal with Democrats.

Context: Trump has not steeped himself in the details of his budget, and his aides wonder how many decisions he'll reverse when he finds out about them. We saw Trump backflip twice over the past week:

  • Trump announced Thursday that he had "overridden my people" and restored funding to the Special Olympics — throwing Education Secretary Betsy DeVos under the bus.
  • And in his Michigan rally on Thursday night, Trump overruled his own budget, which would have cut $270 million in funding for the Great Lakes Restoration Initiative.

"I guarantee you can find all sorts of cuts that he'll turn around and say I'm not cutting this shit," said a source who has been closely involved in the Trump administration's budget deliberations.

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