Larry Kudlow, a top White House economic adviser, said President Trump’s “tough” 2020 budget blueprint, due out Monday, could trigger a new fight over the his desired U.S.-Mexico border wall.
The 2020 budget blueprint will include at least $8.6 billion in border wall money, a senior administration official said Sunday. About $5 billion is slated to come from the Department of Homeland Security, with $3.6 billion coming from military construction funds.
“I suppose there will be” another budget fight over the wall, Mr. Kudlow said on “Fox News Sunday.”
“I would just say that the whole issue of the wall and border security is of paramount importance,” Mr. Kudlow said. “We have a crisis down there. I think the president has made that case very effectively.”
A standoff over border wall money helped precipitate the recent five-week government shutdown, and Mr. Trump recently declared a national emergency on the southern border the administration says will open up more funding for wall construction.
The administration recently outlined roughly $8.1 billion in other immediate funding for the wall, which includes nearly $1.4 billion in a recent spending bill, as well as $600 million from asset forfeitures, $2.5 billion from Defense Department counter-narcotics funds, and $3.6 billion from military construction money.
The House recently passed a resolution disapproving of the president’s emergency declaration, which would affect the military construction money, though the resolution is unlikely to survive a presidential veto if the Senate follows suit.
The president is proposing a 5 percent cut for domestic discretionary spending, while at the same time calling for a boost for the Defense Department, to $750 billion next year.
On the defense side, the president plans to park about $174 billion in a special overseas fund that isn’t subject to strict spending caps that Congress has lived under since 2011 — a move that congressional Democrats have rejected as a gimmick.
“It will be a tough budget,” Mr. Kudlow said. “Some of these recent budgets have not been favorable toward spending.”
The budget is projected to balance over 15 years and projects that the economy will grow on average by about 3 percent over the next decade, the senior administration official said.
White House and congressional budget blueprints typically look to get to balance over 10 years. But the country’s fiscal picture is getting worse, with the national debt recently surpassing $22 trillion for the first time ever.
The Treasury Department recently reported that the federal government ran a $310 billion budget deficit for the first four months of fiscal 2019 — a 77 percent increase from a year earlier.
Mr. Kudlow said he’s not terribly concerned about budget deficits at the moment as long as the administration can keep public debt-to-GDP ratios at a reasonable level.
“I don’t think good growth policies have to obsess necessarily about the budget deficits and so forth,” Mr. Kudlow said. “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.”
He said if the markets were overly concerned about deficits, there would be more of an effect on interest rates.
“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.”
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