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Cut US debt before it's too late: Ex-Gov Daniels

The U.S. economy needs to grow faster than "the limping rate" of the last few years, said Mitch Daniels, former director of the Office of Management and Budget under President George W. Bush.

One of the ways to help address the problem would be to tackle the nation's staggering debt, he said in a "Squawk Box" interview. "One hopes that eventually our decision-makers in both parties will get serious about the debt we're piling up and planning to leave for the next generation."

Read MoreUS debt to hit ceiling again, and this time it could be worse

The two-term governor of Indiana became president of Purdue University in 2013 after leaving office and deciding not to seek the Republican nomination for the White House.

"The explosion in entitlement spending is eating the discretionary part of the budget," Daniels said. "That means less money for investments in education and basic research—things that are really important to our economic future."

His comments come as the debt ceiling debate heats up in Washington, with Congress yet to authorize an increase. The Treasury Department this week started taking "extraordinary measures" to temporarily pay the government's bills—moves the Congressional Budget Office estimates would last until October or November.

Read MoreCNBC Explains: The debt ceiling

Meanwhile, Republicans on Capitol Hill and President Barack Obama are also gearing up for a budget fight.

House Republicans Tuesday unveiled a $3.8 trillion budget plan for next year, which effectively breaks tight budgetary restraints on the Pentagon, while promising a familiar roster of big cuts to social programs, including the repeal of Obamacare. The budget road map by new House Budget Chairman Tom Price of Georgia aims to eliminate the federal deficit within 10 years.

The White House submitted its proposed $3.99 trillion budget last month, with the president saying his blueprint is based on the principles of "middle-class economics" he addressed in this year's State of the Union address.

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—Wire services contributed to this report.