President  |  Vice President  |  First Lady  |  Mrs. Cheney  |  News & Policies 
History & ToursKids  |  Your Government  |  Appointments  |  JobsContactGraphic version

Email Updates  |  Español  |  Accessibility  |  Search  |  Privacy Policy  |  Help

Printer-Friendly Version   Email this page to a friend

Privacy Policy

Welcome to "Ask the White House" -- an online interactive forum where you can submit questions to Administration officials and friends of the White House. Visit the "Ask the White House" archives to read other discussions with White House officials.

Keith Hennessey
Assistant to the President for Economic Policy and Director of the National Economic Council
January 31, 2008

Keith Hennessey
Good morning from the West Wing of the White House. The President spoke yesterday at Robinson Helicopter Company in Torrance, CA on the economy and trade. The Congress is now considering a short-term economic growth package, spurred by the President's proposal of about two weeks ago. The US economy is growing, albeit more slowly than we would like. And we face drags and risks from the housing sector, financial markets, and oil prices. That's why the President proposed to let you keep more of the money you earn this year, and to give businesses an incentive to invest in 2008. The President reached an agreement last week on a bipartisan growth bill with Speaker Pelosi and Republican Leader Boehner, and that bill passed the House 385-35. We hope that the Senate will soon pass that bill without amendment, so the President can sign it, and we can get the process going on issuing tax refund checks.

randy, from centerville writes:
Is are country heading for another depression? If so how can we avoid this when we import so much of are products, and have been working on are on economy? If it can be fixed how long is it going to take?

Keith Hennessey
It's important to remember three simple but critically important facts about the US economy right now.

1. The single most important indicator of a healthy economy is how many people are working. The unemployment rate is now 5.0%. While that's up quite a bit from 4.7% in the prior month, 5.0% unemployment is still a very good number. Lots of Americans are working, and that's good. Today's unemployment rate is below where it was (on average) in each of the last three decades.

2. The US economy is growing, albeit slowly. We had a strong 3rd quarter last year (GDP +4.9%). We got preliminary data yesterday that the economy grew much more slowly in the fourth quarter of last year, at a rate of +0.6%. That's a significant slowdown, and it's slower than we would like. But it's important to remember that "slowdown" does not equal "recession". Slowdown means slow growth. Recession means negative growth. (The actual definition is a bit technical, I'm oversimplifying a bit here.)

3. The President's economic advisors and most private sector forecasts expect the economy to continue to grow this year, albeit slowly. The most likely scenario is slow growth through the first half of 2008. Most also predict that growth will accelerate somewhat in the second half of the year.

And trade in both directions (imports and exports) is critical to our US economic success. Imports force American firms to be more productive to compete, and this means less expensive and better things for you to buy. And exports help US economic growth, as American workers produce stuff that people in other countries want to buy. 90% of an American's firms potential customers live outside America. That's a lot of potential buyers.

Cliff, from Brimfield, Ohio writes:
Director Hennessey: When the economic stimulus package passes and the President sign's it. How long do you think it will take to get the package to the people and how long do you think it will take to see the results of the package? Are we talking quick results? Or longer slow term results? Thank You

Keith Hennessey
To quote the classic but somewhat cheesy 1986 film "Top Gun": "I feel a need. A need for speed."

The President has emphasized speed. About two weeks ago, he laid out his proposed principles, and one of them was that a growth package should be immediate. That means two things: (1) Congress should pass legislation immediately; and (2) policies with immediate macroeconomic effects are better than those with delayed effects.

We're quite pleased with the bipartisan legislation that passed the House earlier this week. Every provision in that bill would have a near-term effect, and the House acted quite quickly. The President is urging the Senate to take up and pass the House bill without amendment, so that we can get the IRS started on the process that leads to rebate checks.

Our best guess is that these checks could start being delivered some time in mid-May, so long as the legislation doesn't get more complex. Simplicity leads to speed, complexity leads to delay.

The other side of the package consists of incentives for businesses to invest now. We think firms will begin making those decisions as soon as the bill is signed into law.

David, from Newton, Kansas writes:
Is the economy being stalled by the price of fuel? If so what practical real solutions is this administration going to propose prior to the end of the Presidents term in office.

Keith Hennessey
High oil prices are a cost to the economy. You see that every time you fill up at the gas station, because high prices mean you've got less money for food, rent, or other necessities.

The short answer is we need more: more fuel efficiency, more renewable and alternative fuels, and more domestic supply.

In last year's State of the Union, the President proposed that the Congress increase the fuel efficiency requirements of cars and trucks by reforming and increasing what are called the CAFE fuel economy requirements.

He also proposed that we increase the amount of renewable fuels we use as alternatives to oil.

Congress acted on the President's proposal, and in December he signed a bill into law that does just that. This new law will have a significant effect in making our economy more energy efficient and flexible in terms of the oil that we need to grow.

It might surprise you that, while this Congress enacted a good law that the President was pleased to sign, the bill they sent him was actually less aggressive than his original proposal.

So Congress has helped provide more fuel efficiency, and more renewable fuels. They could take the next big step if they adopted the President's proposals to increase domestic oil supplies in environmentally responsible ways. There's a lot of oil available within and just off the coast of the US, and if we increase our development of those supplies, we will be less dependent on supplies from unstable or unfriendly parts of the world.

Daniel, from San Diego, CA writes:
When our President entered his second term, what was the national defecit? and at this rate, how long til we debt free?

Keith Hennessey
The federal deficit for fiscal year 2005 was about $318B, but economists say that what's important is how big our deficit is, relative to the size of our economy. By that measure, it was 2.6% of GDP in that year.

It's the same as if you were looking at a mortgage payment of $2,000 per month. It's hard to tell how much of a burden that is, unless you know how big that is compared to your annual income. Someone with $40,000 of annual income probably can't afford a $2,000 per month mortgage payment, while someone with $140,000 certainly can.

On our current path, we will never be debt free. We have a deficit problem, but it's not this year's deficit or next year's deficit. Our nation's real deficit challenge is the long-term deficit that will be caused by the growth of three spending programs (called "entitlements"): Social Security, Medicare, and Medicaid.

Obviously, all things being equal, we prefer lower deficits. And the President has a budget proposal that will balance the budget by 2012, through a combination of economic growth and slowing spending growth.

But if you're worried about the deficit or debt, focus on the longer-term spending problems caused by the future growth of entitlement spending. The President, for instance, laid out proposals a few years back to reform Social Security and address this part of the long-term problem. Monday night, he challenged Members of Congress to do the same.

Chris, from KY writes:
So this so called "economic boost", is it for the rich as usual, or do the working class actually get something?

Keith Hennessey
The House passed a bill two days ago on a 385-35 vote. 93% of House Democrats and 85% of House Republicans voted aye. The President strongly supports this bill, which his Treasury Secretary Hank Paulson negotiated with Speaker Pelosi and Republican Leader John Boehner, and is calling for its quick passage by the Senate.

That bill would provide tax relief, in the form of rebate checks that you would get over the next few months, to anyone who owes income taxes and who makes below a certain amount. If you're above those income levels, you don't qualify under this bill.

The exact phase out amounts depend on your family situation, but if you're single with no kids, you get no tax relief if your income exceeds $87,000, and if you're married with no kids, you get no tax relief if your income exceeds $174,000.

Michael, from Powell, Tn writes:
How would the deal with Democrats on tax rebates work? Thank you.

Keith Hennessey
I'm going to oversimplify a smidge.

If you owe income taxes and your income is below a certain amount, you'll get a tax cut this year. Rather than waiting to get that tax cut when you file your taxes in early 2009, the IRS will send you a check for this amount, in May or June if everything goes according to plan.

It's hard for me to get super-specific without writing 1000 words, but if, for instance, you earn $50K per year and are single with no kids, you'll probably get a $600 check from the IRS in May or June.

If you and your wife make $80K combined and have two kids, you'll probably get an $1800 check in the same timeframe. ($600 for each of you, and $300 per kid)

I'm writing "probably" just to cover myself for weird situations -- it will work this way for the vast majority of people who have jobs and pay income taxes.

Nick, from Virginia writes:
In efforts to stimulate the economy has anyone brought up the issue of possibly accelerating the minimum wage schedule? I am not sure how much of a boost it would give, but it would go to those who need it most. Thank you, Nick

Keith Hennessey
No. That's probably because the President signed a bill last May that would raise the minimum wage in three steps: to $5.85/hr effective last July 24th; to $6.55/hour this coming July 24th, and to $7.24/hr effective July 24, 2009.

Scott, from Waynesville,NC writes:
Mr. Hennessey, I was wondering if you could enlighten me on what the "North American Union" is, how it works, and the Administration's stance or opinion of the development of the North American Union.

Thank You for your help

Keith Hennessey
There's actually no such thing as a North American Union, and no plans by anyone to create one.

Leaders from the US, Canada, and Mexico have met together annually since 2005 as part of the Security and Prosperity Partnership. You can learn more about it here:

Monday night, the President announced that the next meeting of this group will be in New Orleans on April 21st and 22nd.

Daniel, from Tampa, Florida writes:
While the United States is facing a major financial recession and economic slow down, I dont see any plans to promote the markets internationally. The internal tax rebates are suppose to stimulate the internal economy, but why not incentivate foreign investors from Latin America, Europe and Asia to come and do business in the United States? Thank you so much for your time. Best Regards, Daniel

Keith Hennessey
I certainly can't say it any better than the President did yesterday in Torrance, CA:

"It's very important for our country to be open for investment without sacrificing our national security. There's some countries around the world that have accumulated large amounts of money. Sometimes it's our money. And it makes sense to say to somebody, sure you can invest in America. I noticed the other day one of these Wall Street firms had a big chunk of foreign money invest on their -- in their balance sheet. We ought to say, you bet, absolutely, you're welcome to invest in the United States of America. Investment means jobs and productivity increases.

Now, we're going to do it in a way that doesn't sacrifice national security. We'll analyze investments. But this nation ought to not close our doors and be fearful. We ought to be confident because we're a great people."

Jason, from California writes:
Mr. Hennessey: If I have figured that I am going to receive a refund of my federal taxes for 2007, am I still eligible for the proposed rebate coming from the IRS?

Thank you.


Keith Hennessey

The new bill is, in effect, a tax cut for 2008. (Technically, IRS will calculate it based on your 2007 income, but don't worry about that too much.)

The basic point is that it is separate from the taxes you owe, or the refund you're getting, for taxes paid and owed last year.

Twila, from Cheyenne, Wyoming writes:
I listened to the speech last night, what kind of help is for the people who are behind in mortgage payments to get caught up and stay on track, whom do you contact for this kind of help?

I am raising my great grand daughter and work full time, but the money doesnt; go very far, and got behing on mortgage payments and dont' want to loose my home. What kind of help can I get?

Keith Hennessey
Try the HOPE NOW alliance at 1-888-995-HOPE, or at

It's a group of nonprofit housing counseling organizations, lenders and mortgage servicing companies, and trade associations, that is designed to help people who are having trouble paying their mortgage.

They will be able to put you in touch with people who can help you look at your specific situation, and help advise you on your options.

This HOPE NOW Alliance was created due to the leadership of the President's Treasury Secretary, Hank Paulson, and his Housing Secretary, Alphonso Jackson. It is today helping people like you.

Wiliam, from St. Louis, Missouri writes:
Dear Mr. Hennessey, When will your forecasts (ERP) be made public?

Does the administration have an opinion about the desirability of the government having a numerical objective for the inflation rate?


Keith Hennessey
The Economic Report of the President will come out the week after the budget (so, the week after next).

And no, no inflation target here.

Keith Hennessey
OK, I've got to go. The President is meeting with some business leaders in Kansas City tomorrow and will be speaking about the economy at a Hallmark facility. We're working with allies in the House and Senate to get quick passage of the bipartisan growth agreement. And we've got free trade agreements to pass, tax increases to prevent, a new energy law to implement, and a Social Security program to make permanently sustainable (with voluntary personal retirement accounts, of course). Thanks for tuning in.

Printer-Friendly Version   Email this page to a friend

Issues In Focus

More Issues more issues

  |   News Current News Press Briefings Proclamations   |   Executive Orders   |   Radio   |   Appointments   |   Nominations Application   |   Offices   |   Freedom Corps   |   Faith-Based & Community   |   OMB   |   More Offices   |   Major Speeches   |   Iraq Transition   |   State of the Union   |   Saddam Capture   |   UN Address   |   National Address   |   Iraqi Freedom   |   National Address