White House economic adviser Larry Kudlow told CNN’s Jake Tapper Sunday that the administration plans to lower the deficit, despite recent upward projections that suggest otherwise.
“The effects of this economic growth boom are going to be a major important factor to this, very important,” Kudlow said on CNN’s “State of the Union.” He then cast the deficit as a byproduct of economic stimulus that would bring in more tax revenue over time.
“Sometimes in the short run, in order to invest in the economy, lower tax rates do yield lower revenues, I reckon it’ll take us a year — maybe 18 months — to start turning that around. It’s not unusual. Look at it as a good investment in America’s future prosperity and healthy economy,” Kudlow said.
Citing “some of the numbers I’ve seen” as well as undefined CBO estimates, Kudlow said some numbers show “we’ve already paid for two-thirds of the corporate tax cut.”
He then made this prediction: “I think that by the end of this fiscal year, I’m sorry, fiscal year ’19, the corporate tax cut will be paid for by 2020, it will be more than paid for.”
Kudlow gave one clue as to how these numbers were possible in a prediction he gave Tapper.
“We are going to be tougher and tougher on spending, OK? Tougher and tougher on spending. That’s part of the deficit calculation as you well know. So I believe a combination, of faster economic growth over the next bunch of years, Jake, as well as much tougher on spending, [will] still get that deficit on down,” Kudlow said.
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