(CNSNews.com) - The White House is calling for a 5 percent cut in discretionary domestic spending in the Fiscal Year 2020 budget plan it will send to Congress on Monday.
Kudlow said it would be a "tough budget," but reports say it wouldn't balance for at least 15 years. What about the ballooning deficits and debt? Chris Wallace, the host of "Fox News Sunday," asked Kudlow.
"Look, I don't think -- I don't think good growth policies have to obsess necessarily about the budget deficits and so forth," Kudlow responded.
"Look, Chris, my view, and I believe the view of the administration, we are going to point a steady glide path towards lower federal spending and federal borrowing as a share of the economy, as a share of GDP... We are going to run, I think, about 4-1/2 to 5 percent of GDP. That's a very modest number compared to even the recent past."
Wallace noted that the "modest" deficit number -- the difference between revenues and spending -- could be close to a trillion dollars in 2020.
"Perhaps so," Kudlow said, "but the economy is $20 trillion; and net worth today, household net worth, is about $100 trillion. So I don't think that's a burden on the economy."
Kudlow noted that ten-year Treasury bonds are now yielding around 2.63 percent. "If the markets were overwhelmingly worried about our budgets and our spending and our deficits, you would see that interest rate rise and be a greater penalty. I don't see it right now," he said.
"And again, long run, we do want to reduce the burden of spending and borrowing, absolutely, but always as a share of GDP...that's the same policies, that's the same approach we had during the Reagan years."
The Congressional Budget Office, in its January update, projected that the federal budget deficit will be about $900 billion in 2019 and exceed $1 trillion beginning in 2022 and each year thereafter.
"Over the coming decade, deficits (after adjustments to exclude shifts in the timing of certain payments) fluctuate between 4.1 percent and 4.7 percent of gross domestic product (GDP), well above the average over the past 50 years," CBO said.
And because of those persistently large deficits, "federal debt held by the public is projected to grow steadily, reaching 93 percent of GDP in 2029 (its highest level since just after World War II) and about 150 percent of GDP in 2049 -- far higher than it has ever been. Moreover, if lawmakers amended current laws to maintain certain policies now in place, even larger increases in debt would ensue."
As CNSNews.com has reported, the recently deposed Republican majority increased the federal debt by $7.9 trillion in the eight years it controlled the House of Representatives.
The national debt is the amount that the government has borrowed to finance accumulated deficits.
According to the Congressional Budget Office, the growing federal debt in coming decades would have the following consequences:
-- Reduce national saving and income in the long term;
-- Increase the government’s interest costs, putting more pressure on the rest of the budget;
-- Limit lawmakers’ ability to respond to unforeseen events; and
-- Increase the likelihood of a fiscal crisis, a situation in which the interest rate on federal debt rises abruptly,dramatically increasing the cost of government borrowing.