Concerned about potential security risks, the U.S. government is taking a close look at the sale of New York's iconic hotel to a Chinese insurance company.
U.S. officials said Monday they are reviewing the deal to sell the Waldorf to which is buying the hotel from Hilton Worldwide for $1.95 billion.
Terms of the sale allow Hilton to run the hotel for the next 100 years and call for "a major renovation" that officials say has raised eyebrows in Washington, where fears of Chinese eavesdropping and cyber-espionage run high.
CNBC contributor and former congressman Barney Frank felt somewhat differently. He thinks allowing the Chinese to buy the Waldorf could have an upside—it could benefit the U.S. economy.
"If they put money here, I don't know how that punishes us," said Frank, also on "Closing Bell."
However, Frank went on to say he also believes the U.S. isn't committing the resources needed to address cybersecurity concerns, broadly. "I want to take resources that are currently being used unwisely so we can focus on this (problem)," he said.
Kudlow, however, believes economic sanctions may be warranted. He thinks drastic actions are necessary, now, to prevent Chinese cybercrime from spiraling out of control.
How the U.S. government proceeds remains unclear.
For more than 50 years, the State Department has leased a residence for the U.S. ambassador to the U.N. on the 42nd floor of the hotel's Waldorf Towers.
Ending the government's relationship with the Waldorf could be problematic and expensive, according to officials who note that numerous studies conducted during both Republican and Democratic administrations have concluded that it is cost effective and convenient.
—The Associated Press contributed to this report.