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White House economic adviser Larry Kudlow revealed on Sunday that President Trump wanted an overall 5% cut in all domestic spending as part of his proposed 2020 budget.
"It will be a difficult budget," said Kudlow during an appearance in "Fox News Sunday". "We are going to make our own ceilings this year and I think it should have been done a long time ago."
Kudlow added, "Some of these recent budget offers have not been cost-effective. So, I think that's exactly the right prescription. "
Government report says US budget deficit should reach $ 897 billion
Kudlow said that "there is no reason to be obsessed" with the budget deficit, even if it is approaching a trillion dollars, as long as 39, it remains below 5% of the global economy.
He added that the budget would contain an overall reduction of 5% of domestic spending proposed.
In line with previous spending plans, Trump's plan for fiscal year 2020 will propose cuts in many national programs favored by legislators on both sides, while leaving pension programs aside politically. popular, such as Medicare and Social Security.
Washington will likely spend months removing the last vestiges of a failed budget deal in 2011 that would cut US $ 71 billion from Pentagon base operations and $ 55 billion from national agencies and foreign aid. Leading lawmakers are pushing for a resumption of three previous agreements to use spending or new revenue cuts and support additional spending rather than closing deficits that are close to $ 1 trillion again.
The Trump tax break in 2017 is largely responsible for widening the deficit, as well as the sharp increase in Pentagon spending and national agencies and the rising federal pension costs of the next generation. baby boom. The promises that tax cuts would spur such economic growth that it would be almost fully profitable have unfortunately proved to be false.
TRUMP ASKS CABINET TO REDUCE DEPARTMENT BUDGETS BY 5%
Trump's next budget, however, will not solve any of the major factors behind the growing and insoluble deficits that drove US debt to more than $ 22 trillion. His most striking cuts – to national agency operations – were rejected when Tea Party Republicans controlled the House. They have equally dark prospects now that Democrats are in the majority.
Trump did not suggest that he was interested in the deficit and he rejected any idea of cuts to Medicare or Social Security, the huge federal pension programs whose imbalances are the main contributors to the deficit.
Kudlow – a former analyst and economic commentator on Wall Street – said the 2020 proposal would also maintain the 3% tax cuts implemented in 2018.
"If you want to manage budget deficits, you have a fast growth, which means that tax cuts remain in place," he said. "We believe that tax rates of 3% in 2018 will be maintained in 2019 and beyond 2020, etc."
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One of the areas in which the proposed budget will not be reduced is the funding of the President's Border Wall.
The Washington Post announced Sunday that Trump will seek new funding of at least $ 8.6 billion for the construction of additional sections of a wall along the Mexican border. Trump also wants $ 5 billion in additional funding for the Department of Homeland Security and an additional $ 3.6 billion for military construction.
All this would add to the $ 6.5 billion that Trump promised last month to redirect for the construction of the wall.
"I would just say that the whole issue of wall and border security is of paramount importance," Kudlow said Sunday. "We have a crisis there. I think the president has presented his case well. It is a crisis of the economy, crime and drugs, it is a crisis of humanity. "
Associated Press contributed to this report.
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