Low interest rates gives the White House and Capitol Hill time to shrink the nation's massive federal budget deficit, Congressional Budget Office Director Phillip Swagel said Thursday.
However, Swagel warned, "If we wait longer, then the changes that are needed are more difficult" because spending on entitlements such as Medicare and Social Security needs to be curtailed.
"It's such a challenge that we need all of our society today, the entire political system and everyone together, to take over entitlement," he said. "We have to give people time to adjust."
"It can't be done overnight. It has to be done over time. But with interest rates low, that gives us time," Swagel told CNBC's "Squawk Box," adding he sees rates staying low.
The Federal Reserve last month voted to keep interest rates steady after three cuts last year.
According to the minutes from the Fed's January meeting, central bankers expressed confidence about the state of the U.S. economy and figured rates would likely remain unchanged for a while.
President Donald Trump has repeatedly been critical of Fed Chairman Jerome Powell for not reducing rates even more, while expressing envy about negative rates in Europe and Japan.
On Thursday, the White House issued a vigorous defense of the Trump administration's economic agenda — claiming credit for changing the trajectory of the nation's record expansion, while taking aim at the Obama administration's record.
In its annual report to Congress, the White House highlighted GDP growth that has outpaced expectations and a jobless rate that has hit historic lows under Trump.
Tomas Philipson, acting chairman of the White House Council of Economic Advisors, said, "Three years into the Trump administration, the U.S. economy continues to outperform pre-2016 election expectations and also reverses or improves trends compared to the prior expansion after the Great Recession."
Those comparisons were a veiled swipe at former President Barack Obama.
With economic growth trends stronger, Swagel stressed that now is the time to address the U.S. budget. "The sun is shining, now is time to look at our roof and start to fix it."
Last week, the Trump administration unveiled its fiscal 2021 budget, which showed the economy growing at an average rate of 3% for the next 15 years.
The White House, which projects the deficit hitting $1 trillion this fiscal year and lingering at $200 billion after a decade, has said strong economic growth over time will reduce budget shortfalls.
The budget also includes a plan to extend the tax overhaul that Republicans passed in 2017.
In August, the CBO raised its federal deficit forecast, saying the U.S. will average a whopping $1.2 trillion per year between 2020 and 2029.
The CBO said at the time that its estimates were due to Trump's fiscal 2020 budget deal, which passed the House and Senate and was signed into law by the president in early August.
