White House economic adviser Larry Kudlow said that President Donald Trump will call for a 5 percent “across the board” cut in domestic government spending in 2020 when he proposes his new budget on Monday, March 11.
“It will be a tough budget,” Kudlow told the Fox News Sunday show. “We’re going to do our own caps this year and I think it’s long overdue.”
Kudlow said, “Some of these recent budget deals have not been favorable toward spending. So, I think it’s exactly the right prescription.”
The president’s third budget proposal during his presidency, for the year starting in October, is expected to draw wide opposition from Democratic lawmakers and some Republicans, setting off months of debate .
The recent dispute centered on President Trump’s demand for more than $5 billion for construction of a wall along the U.S.-Mexican border to thwart illegal immigration. When Congress rejected the president’s request, he declared a national emergency to bypass congressional authorization to tap money allocated for other projects to build the wall. Congress is now considering whether to revoke the emergency declaration and 16 states have sued to overturn it.
U.S. news outlets reported he will seek at least another $8.6 billion in new wall funding in the 2020 budget. The reports said the budget cuts will not affect popular programs providing health care funding and pensions for older Americans, but will pare other funding for domestic programs while boosting defense outlays.
Kudlow said he expects a new fight over border wall funding.
But he contended that the president has justified his call for the wall’s construction.
“I would just say that the whole issue of the wall and border security is of paramount importance,” Kudlow said. “We have a crisis down there. I think the president has made that case effectively. It’s a crisis of economics, it’s a crisis of crime and drugs, it’s a crisis of just of humanity.”
For years, U.S. presidents and Congress have squabbled over the budgets, what to spend taxpayer dollars on and the size of the annual deficits, often hundreds of billions of dollars that add to the country’s long-term debt of more than $22 trillion. The current budget is more than $4.4 trillion, with a deficit of about $1 trillion expected.
There are signs the U.S. economy, which grew at a rate of 2.9 percent last year, is slowing, but Kudlow said he was not worried by some predictions that said the American economy, the world’s largest, will only advance between 1 and 2 percent in the first three months of the year and that the overall advance for 2019 will be just above 2 percent.
“I’m not going to score it just yet,” Kudlow said. “I’ll take the over on that forecast. As long as we keep our policies intact, low tax rates for individuals and businesses, across the board deregulation, lighten the paperwork, let small businesses breathe and get a good rate of return. The president has ended the war on business. The president has provided incentives for economic growth. We’ve opened up the energy sector. Our policies are strong and I think the growth rate this coming year will exceed these estimates just as they have last year.”
He added, “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. Long run, we do want to reduce the burden of spending and borrowing, absolutely.”
The United States added 20,000 new jobs in February.
Kudlow said the United States is “making good progress” in ongoing trade talks with China although an agreement has not yet been reached.
“As the president said, across the board, the deal has to be good for the United States, for our workers and our farmers and our manufacturers, got to be good,” Kudlow said. “It’s got be fair and reciprocal. It has to be enforceable. That’s an important point.”