GOP billionaire Ken Langone: US needs to cut debt even if it causes a recession and a stock plunge

Key Points
  • Tax cuts are great, but the only way to really get America's financial house in order is to cut debt, the Home Depot co-founder says.
  • The U.S. should risk a "very significant recession," and even a stock market drop, "to get it done," the GOP donor argues.
  • After weekend Senate passage, lawmakers must now craft and pass a compromise bill before it can go to President Trump.
Ken Langone: Tax reform will unleash good economic forces for many people

While hoping a GOP tax overhaul becomes law, Ken Langone told CNBC on Monday the only way to really get America's financial house in order is to cut the federal debt.

The billionaire co-founder of Home Depot and longtime Republican backer went so far as to say that the U.S. should risk a "very significant recession to get it done."

If that happens, Langone said in a "Squawk Box" interview, "the stock market is going to take a big hit." But he said it would be worth it to reset the spiraling debt and deficit trajectory.

While arguing the GOP tax plan would "unleash economic forces all to the good for a lot of people," Langone also said he would "feel better when we address the debt, when we address the deficit, in a way where we're doing this over a period of time."

The Senate early Saturday passed its approach to cutting taxes for individuals and corporations. The House approved its bill last month. Lawmakers must now craft a compromise bill that would need approval by from both chambers before going to President Donald Trump.

Langone, who supported Trump for president after first backing Chris Christie and then John Kasich, said he and other successful investors will face higher taxes under the GOP reform plan and "have no problem with it."

"My taxes are going to go up. And I think that's wonderful," he said, adding that he supports "anything we can do to enhance" the system in which he found success and was "blessed to be born into."

"Nothing is going to change in my life if I pay more taxes," said Langone, founder and chief of investment bank Invemed Associates, specializing in health-care companies. "I am a New York resident. And I'm staying a New York resident," addressing a question about whether he would change his residency to a lower tax state.

Also on Monday, House Majority Leader Kevin McCarthy told CNBC that Senate passage on schedule proves legislation can be done this year.