August 10, 2005
My name is Al Hubbard. I am Director of the National Economic Council and Assistant to the President for Economic Policy. The Economic Team visited
Crawford yesterday to brief the President on the current state of the Economy with a special emphasis on how the average American family is doing in
this economy. I am happy to report that we were able to tell the President that the economy is doing extremely well, having created close to 4 million
jobs since May of 2003 with an unemployment rate of 5% which is lower than it was on average during the 70s, 80s or 90s. Accompanying me to Crawford
were Chairman of Council of Economic Advisors Ben Bernanke, Office of Management and Budget Director Josh Bolten, Secretary of the Treasury Snow,
Secretary of Commerce Carlos Gutierriez, Secretary of Agriculture Mike Johanns, United States Trade Representative Rob Portman, Secretary of Labor
Bobbie, from Dallas, TX
Everybody keeps talking about how the economy is growing and so good yet
I have been out of work for 6 12 months now. I am a legal assistant
with 15 years of experience. Law Firms seem to be looking for people
with 2 to 5 years of experience so they can pay them less. I need a job
now, what help is there for me?
As I mentioned in my opening statement, the job situation has improved dramatically over the past 2 years. Just last month the economy created over 200,000 new jobs. My suggestion to you is to remain persistent in your job hunt and I am sure you will find the right job for you.
Gary, from Hoosick Falls, New York
How would you define that the growth may be getting, when gas prices are
sky rocketing along with food. Some of the pay wages are not keeping up
with these two problems.
The President is very concerned about the high price of gasoline because he understands that it impact it has on family budgets and small businesses. That is why his Energy Bill was so important which he signed this week. Although it will not lead to the immediate reduction in prices at the pump, over the long run, it will lead to more energy independence and lower prices.
Josh, from Missoula, Montana
I am starting my senior year in college this fall and want to know,
based on recent trends, what the job market will look like when I
graduate in May 2006. Any projections?
We feel very good about the economy for 2006 and your job prospects should be very good. The economy grew at over 4% in 2004 and is expected to grow at around 3.5% this year. We expect it to grow around 3.25% next year.
James, from Nashua, N.H.
Is the Fed going to raise the interest rate?
The Fed raised the rate again by 25 basis points yesterday. Interest rates still remain low by historic standards. The Federal Reserve Board is an independent body and is does not indicate to us what its plans are with respect to interest rates. Chairman Greenspan and the other Federal Reserve Governors have done a good job of keeping interest rates low while monitoring inflationary pressures and we are confident that they will continue to do so.
Joe, from Georgia writes:
I would like to urge President Bush to support and fight for the
FairTax. Thanks, Joe Daughtery
As you know, the President created a Tax Panel chaired by Former Senator Connie Mack and co-chaired by former Senator John Breaux. The Tax Panel will be reporting on September 30th to the Secretary of Treasury. I am confident they are considering the Fair Tax as well other approaches to Tax Reform.
Joan, from Media, PA
I read in the paper today that the economy is slowing. The article
stated that Labor Dept stats show that work productivity was down to 2.2
What does that mean?
Actually the economy is not slowing. The second quarter was very strong with a growth rate of 3.4% despite a reduction in inventory of 2.2%. Productivity growth of 2.2% continues to be good. That means that Americans are producing more for the same amount of effort which will lead to higher compensation.
Rob, from Cherry Hill, NJ
Mr Hubbard, thanks for taking our questions today. Since I had to drop
out of ECON 101 in college, I need you to sum it up for me. How is the
U.S. economy doing in relation to the rest of the world?
I am happy to report that U.S. economy is doing exceedingly well compared to the rest of the world. Unfortunately, the other developed countries, mainly the EU and Japan, are not doing very well. They are only growing at 1% per year while our economy is growing around 3.5 to 4% per year.
Bill, from Murfreesboro, Tenn. writes:
What is the President's plan to get us out of debt? What is the status
of the deficit today?
The President is committed to reducing the Budget deficit. As you know, in mid-July, OMB Director Josh Bolten announced that the budget deficit is going to be 94 billion less than originally projected because of the strong economy and higher tax revenues.
E., from Dayton writes:
I would like to know, just how the percentages are figured when
calculating unemployment/employment. We have heard there has been
thousnad of jobs obatined through the last year. However, many companies
are folding or lessening the man power by up to the 10"s of thousands.
The oil prices keep going up for one thing and nothing is being done,
and we know that the energy bill is not going to be able to do anything
about this for years to come if even then. It has to have an effect on
our economy and loss of jobs.
Unemployment continues to drift down and is now at 5% which is lower on average than it was in the 70s, 80s or 90s. Almost 4 million jobs have been created since of May 2003.
Jerry, from Arlington, VA
I'm thinking about buying a house but the news is saying that the
housing bubble might burst soon. What's your take on the housing
House prices have been strong for a number of important economic reasons. American are getting richer, interest rates are very low and demographics trends have increased the number of potential home buyers.
John, from Texas writes:
Should rigorous enforecment of Labor and Immigration laws play a part in
economic policy? What's being done about it?
Labor and Immigration laws are very important to economic policy. As you know, in America, except for Native Americans, we are all immigrants. Immigrants have had a huge impact on economic growth and will continue to do so in the future. At the same time, the President is committed to legal immigration and stopping illegal immigrants at the border.
Liz, from Texas writes:
With the devastating effects of NAFTA, why would the President approve
CAFTA? What about the upcoming FTAA? That will truly mark the end of
Free trade and open markets have been good for America. Economists have determined that incomes for the average American family are $9,000 higher than they would have been without free and open trade. Free and open trade provides markets for our businesses and workers while providing lower priced goods for the American consumer.
Jen, from Winston-Salem writes:
Is President Bush still supporting his original supply side plan with
low marginal tax rates and benefits for entrepreneures?
The President is very much committed to low taxes and promoting the entrepreneurial spirit in America. He believes very strongly that the American people know better than government how to spend their hard earned dollars.
Steve, from New Albany, Indiana
I am a small business owner with 68 employees, two daughters in college
and working very hard to make a living. Why doesn't the President invite
common small business owners like myself to these "Summits" on the
economy? We have a lot of great ideas, but it seems that the ones that
are running the small businesses, the "engine" that is driving the
economy, have no path to share what has made us a success. I would jump
at the chance to share my thoughts and help my fellow Americans achieve
the same successes I have enjoyed with the tax-cuts. Respectfully,
The President believes very strongly that small business is the engine that provides the vast majority of economic growth in America. He is committed to the entrepreneurial spirit and believes that companies like your own and are critical to our future economic success. Yesterdays meeting was a meeting with his economic advisors. He has held economic summits in the past where small business men and woman and entrepreneurs have participated and provided valuable insight and advice.
John, from Savannah, GA
Mr. Hubbard, We know that the economy works in a cyclical manner where
we will have periods of recession and growth. Since President Bush's tax
cuts we have seen a growth effect. What will or can the administration
do to continue this trend and keep the next recession as far in the
future as possible?
The President is committed to economic growth. To ensure continued economic growth, he is committed to making his tax cuts permanent so more of Americans hard earned dollars remain with them so they can determine how that money should be spent and invested. We believe very strongly that the fast growing economy will continue for the foreseeable future.
Daniel, from Los Angeles, CA
What's "afta" CAFTA? Now that Congress has approved free trade agreement
with 5 Central American countries and the Dominican Republic, which
similar trade deals with other countries will be finalized next? How
will these free trade deals help provide more jobs for Americans? Thanks
The major trade agreement we are focusing on now is the Doha Round for the World Trade Organization.
Editor's note: More information about the Central AmericanDominican Republic Free Trade Agreement (CAFTA-DR) may be found in the In Focus: CAFTA-DR section of the White House website. The President signed the CAFTA Implementation Act on August 2, 2005.
Kathy, from Seattle writes:
Mr. Hubbard, given our continued dependence on oil, and the potential
for fuel shortages in the near-term, does the White House have a
contingency plan ready to keep our economy rolling in case of an energy
As you know, the strategic petroleum reserve has now over 700 million barrels of oil which exist for a energy crisis.
Jonathon, from Washington DC
What do you say to those who charge that GSE's have gotten out of
control in their portfolio sizes, and that combined with fraudulent
accounting and a potential housing slowdown could have traumatic impact
on the US economy?
Also, how do you respond to the fear that with the Chinese holding so
much of our debt that their influence will be exerted in trade?
This Administration supports reform of the laws and regulations of governing GSEs to encourage them to focus on their original mission and not have huge portfolios of mortgages which we believe creates systemic risk for the financial system in America.
With respect to the Chinese, a number of countries and their investors choose to put their money in the U.S. because we are the most successful developed country in the world. This is healthy for the world economy and for the U.S. economy.
Thank you very much for all of these very interesting and perceptive
questions. It has been a pleasure visiting with you. Again, we are very
pleased with the U.S. Economy and expect it to continue to grow on a