Mick Mulvaney isn't a recent convert to fiscal sanity. He pushed it in Congress, and he's pushing it now as OMB director in the Trump Administration.
But he is new to the experience of coming at it from the executive branch, and he couldn't have been surprised when Congress responded to pleas for taxing/spending common sense as Congress usually does.
I would have expected that one reason for Mulvaney's appointment was that he would be expecting Congress's resistance to fiscal sanity, and would be uniquely positioned because of his experience there to successfully push back against it. Apparently that is not the plan at the White House: