The White House
President George W. Bush
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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.

John Snow
Treasury Secretary

July 20, 2004

John Snow

Thanks so much for having me here on "Ask the White House." I'm in the beautiful state of Maine today, and am so pleased to be able to participate in this conversation!

Ross, from Pensacola FL writes:
Would you say that the net effect to the U.S. economy on business practices called 'outsourcing' is a plus or a minus in terms of jobs and revenue?

John Snow
Let me start by saying that this Administration cares deeply about jobs. We want to create as many jobs as possible. I know what it is like to lose a job. We are concerned about the loss of any jobs. Losing a job is a painful thing. It is an awful experience. I know what it is like to lose a job and I know how stressful it is to not have a job and to be looking for a job.

Jobs lie at the foundation of the American dream. Jobs give people dignity and the hope of a better tomorrow. It is through jobs that people provide for their families and their children - the education and wellbeing of their loved ones. This President cares deeply about jobs and all of us in the Bush Administration are concerned about the loss of any job. We want to create as many jobs as possible. Everybody who wants a job deserves the chance to work.

Let me put this in perspective though. Despite what some of our critics are saying, economic isolation is not the answer. Only 5% of the global population lives in the U.S. That means that 95% of our potential market is outside the U.S. We need to stay engaged with the rest of the world. We need those markets opened to our farmers, our service industry and our manufacturers. We have the best workforce in the world, the most innovative businesses, and the most competitive companies. We can compete with anybody. We will only grow our economy by expanding their opportunities to market American products and services to the world. We must say no to economic isolation.

Staying economically engaged with the rest of the world is critical to our own economic health; it is good for job creation. For example, 12 million American jobs depend on exports and 6.4 million Americans receive paychecks from foreign-owned firms. American workers and their products are the best in the world; we are extremely competitive and there is no doubt that we benefit from free trade in terms of both jobs and revenue.

Raymond, from Conroe, Texas writes:
How can we keep Americans working and keep our economy strong, when companies lay off American workers in order to hire foreign nationals for a lower salary?

John Snow
Thank you for this important question, Raymond. The President is committed to making sure that American workers are the top choice of American companies. Accountability in our education system and worker training initiatives that engage our nation's excellent community colleges are key ingredients in achieving that goal. Additionally, we must make sure that the burden of taxes, regulations and health-care costs on our nation's businesses are minimized.

Making the President's tax cuts permanent is central to that goal. We also need legal reforms that will lower the "tort tax," the financial and psychological burden on our business community caused by abusive lawsuits and aggressive personal injury lawyers. Lowering the cost of doing business is good news for American workers because American companies are more likely to create new jobs for them.

David, from Atlanta, GA writes:
The President said the economy is improving. That statement needs qualification. It is true that the stock markets are up, there are more manufacturing orders, and so on. But the average American does not have more money, as Bush implied. The only people who have more money are the people who already had money. Thus, it is only the rich getter richer.

John Snow
David, I am happy to qualify the assertion that the economy is improving; there is much good news to share on that front. Economic growth, as measured by increase in our GDP, has been the fastest in nearly 20 years.

The economy is beyond recovery - it is in an expansion, and has created 1.5 million new jobs since last August. And the average American does, indeed, have more money: After-tax incomes are up 11 percent since the President took office, and household wealth is at an all-time high, as is homeownership.

The President's tax cuts clearly benefited our economy, and helped every taxpayer in this country. In fact, those at the lowest end of the income brackets benefited the most from the tax cuts. Higher income individuals are actually now paying a higher percentage of the total individual income tax burden.

Before the President's 2001 and 2003 tax cuts, the top 1% paid 30.5% of individual income taxes. Now they pay 32.3%. Before the cuts, the top 10% paid 62.6%. Now they pay 64.8%. And on the other end, the bottom 50% paid 4.1% of all individual income taxes before the cuts, and now they pay 3.6 %. Which means that taxpayers that rank in the top 50% pay 96.4% of all individual income taxes.

We've made great progress, but there is no doubt that there is more room for us to grow, economically. With continued strong economic policy, we should be able to create more jobs for hardworking Americans - and we won't be satisfied until every American who seeks work finds it.

Woodrow, from Roanoke, VA writes:
I would like to see an entirely new coin minted to honor former President Ronald Reagan. How do I submit the idea, andor to whom?

I really think it is a great idea. I believe it would be a good rally point for the Economy making a comeback also. Additionally, I think Mrs. Reagan would approve. Thanks.

John Snow
Thank you for your question, Woodrow. I agree that honoring President Reagan is the appropriate thing to do. He was an outstanding president whose contributions to our country, and to our world, should be formally recognized.

As far as minting a new coin, I recommend that you send your idea to your Members of Congress. Any changes to our currency will be decided by Congress, so the Administration will be in consultation with them should any specific ideas begin to move forward.

Peggy, from Houston, Texas writes:
Jobs: If unemployment rates are decreasing, then where are the jobs?

John Snow
Peggy, the good news is that the jobs are being created everywhere - 1.5 million of them since last August. Unemployment rates today are lower in 47 states than they were one year ago.

We are seeing broad-based, quality job creation throughout the economy and in virtually every sector, including traditionally high-paying sectors such as information, construction, financial activities, and professional and business services.

In your home state of Texas, nearly 112,000 jobs have been created since September of last year, over 74,000 this year alone.

Michael, from Marinette, Wisconsin writes:
Do politicians just traval where the economy is comming back or do they just ignore the hard working people of Wisconsin and Michigan?

John Snow
Hello, Michael. I can tell you that the President and I appreciate the hard-working folks in Wisconsin and Michigan very much.

I've visited Wausau, Green Bay, Milwaukee and Racine in your home state of Wisconsin since becoming Treasury Secretary. I've also visited Detroit, Michigan. And the President has been to Wisconsin eight times and to Michigan 14 times since taking office.

I was pleased to see that, according to the Bureau of Labor Statistics, 11,400 new jobs were created in Wisconsin in June - and you've had 58,700 jobs created so far this year.

Under the President's tax cuts, more than 2.1 million taxpayers in Wisconsin will have lower tax bills in 2004. More than 3.6 million people will have lower tax bills in Michigan.

Keeping the tax burden low for the people of that region, and for the entire country, is a priority for the President. He knows that freeing small-businesses and individuals from excessive taxation is the key to growing our economy.

Shelia, from Dallas writes:
Not sure who to address this to.... My question concerns the economy....why has there not been a concerted effort to on the part of the Bush administration to discuss how devasting the 911 attacks were on the jobs were lost (tourist industry, airlines, hotels, etc. from all the fallout)and how amazing the recovery has been despite that tragic day?

John Snow
Thank you for drawing attention to these important facts, Sheila. September 11th was a terrible blow to our economy.

In the six months following September 11th the Bureau of Labor Statistics data shows that we lost more than 1.4 million jobs, which was the peak of the job loss period.

Not all of that job loss can be directly attributed to September 11th - our economy suffered from other blows as well, like the recession and corporate scandals - but the attacks certainly contributed to those numbers.

And you are right, that our recovery has been superb. The natural strength of a free-market system, when stimulated by well-planned and well-timed tax cuts, has never been more clear. America's economy is the envy of the world, and we should be very proud of our resilience following such profound acts of hatred.

As impressive as our recovery and growth has been, there are still Americans who seek jobs, which means there is more work to be done. I am confident that, with the President's terrific economic leadership, America's best economic days will be ahead of us.

ralph, from Scranton, Pa writes:
You keep saying the US is strong, the economy is strong and people are confident; however, every poll I see and every one I talk to contradict you.

Care to comment?

John Snow
I'm glad to have the opportunity to comment, Ralph, because there is a disconnect between the real economic indicators (documented economic growth that is at historic levels and job creation that is robust) and the perception that many Americans have of our economic strength.

It's almost as if we have recovered economically, but not emotionally, from the profound economic shocks our country went through in the recent past.

In fact, the speed and strength of our economic recovery was incredible - just a year ago economists worried about a double-dip recession and deflation and now we're seeing the strongest growth in 20 years - and maybe that is part of the reason why people don't seem to know; the strength of our economy came back with such velocity.

I am confident that an appreciation for our economic strength will return, and that sentiment will help ensure a strong economic future.

Frank, from Milwaukee, WI writes:
If tax cuts have worked so well to recover our economy, to the extent where we even had a recent surplus, why not reduce taxes even more?

John Snow
Thank you so much for this question, Frank. Congress actually has an historic opportunity before them right now to keep our economic recovery on track and prevent a tax increase on the nearly 94 million people who benefit from a variety of tax relief: those in the lowest 10% bracket, those who are using the increased child credit, married people who have been relieved of the marriage penalty, and all those who have been relieved of the alternative minimum tax (AMT).

Those tax cuts will expire at the end of the year if Congress fails to act - resulting in a tax increase on low and middle-class Americans. Congress should extend the tax cuts and also make elimination of the punishing death tax - an outdated tax that hits small businesses and family farms especially hard - permanent.

The President is committed to allowing hard-working individuals and families keep more of their own money to help pay for their children's education, invest for retirement, and spend as they see fit.

Making these tax cuts permanent will help our economy to continue expanding at unprecedented levels of growth both now and in the future.

R.D., from Maryville, Tennessee writes:
Secretary Snow, I have heard conflicting reports over when the 2000-2001 recession began. Did it begin under Bill Clinton or George W. Bush? Did the President inherit a recession? Some say that the recession began under Clinton and some say it began under Bush...who is giving me the straight answer Secretary Peace be with you.

John Snow
Here's the straight answer on that one, R.D.: President Bush inherited an economy that was in steep decline. He immediately took action to change the course of the economy by implementing tax cuts designed to stimulate growth.

Tragically, the attacks of September 11th, followed by the realization of corporate scandals and the bursting of the tech bubble dealt additional blows to the economy before the tax cuts were able to turn it around. We are fortunate that the President persisted with another round of tax cuts after we were dealt such hard economic blows.

His economic policies, combined with sound monetary policy which is in the capable hands of my terrific colleague Alan Greenspan, led us to a recovery. Today we are experiencing an economic expansion.

We've come a long way since the 2000 economic downturn. I appreciate the question, R.D.

Kelly, from Ocala, FL writes:
We need to hear more (and louder) how well this economy is doing. The Dems "sky is falling " message is not what America is hungry to hear but it is all we are hearing. When will you take the gloves off?

John Snow
Kelly, your question reminds me of this simple fact: pessimism never created a job. I certainly disagree with characterizations of our economy that paint a gloomy picture - the facts simply do not back up that view. Our economy is expanding, growing... jobs are being created!

But it would not be smart to be complacent about the economy, either. We can do better, and we will do better. There are still Americans looking for work, and more jobs need to be created to meet their needs.

I am confident that the economy will continue on an upward path, that long-lasting prosperity for America's families is in our future, and the President's economic leadership is a key ingredient for continued job creation and growth.

Mike, from Spokane, Wa writes:
Please ask the President to address what really happened in Roswell, NM in 1947. THE TRUTH PLEASE

John Snow
This question is a little outside of my portfolio, Mike.

As Treasury Secretary, my job is to help the President grow the economy and create jobs, to direct tax policy and work with other nations to maintain sound global monetary policies.

The Treasury Department also contains several key government agencies that enable us to do everything from printing money to collecting taxes and paying the government's bills with that tax revenue.

David, from Nashville, TN writes:
As the economy changes, the president gets the credit or the blame, depending on the circumstances. Is this justified? Does the president make decisions that so quickly affect the economy or is his greatest contribution to the health of the nation in the confidence he inspires? For instance, he is now being blamed for massive job losses, but what law did he pass to bring that about, or was it simply a result of a lack on confidence brought about by over-inflated tech stocks and then September 11th?

John Snow
You raise thoughtful questions, David. Our economy is a great force, and the actions of the President are just one part of what makes it tick.

The most powerful elements of our economy are our small-business owners and entrepreneurs, our outstanding workforce and the simple fact that we operate as a free market. We are fortunate that our economy is more open, flexible, adaptive and resilient than any other in the world.

In terms of President Bush and the economy "on his watch," it is critical to remember that he inherited an economy in steep decline, and several substantial blows occurred early on in his administration: September 11th, the burst of the tech bubble, and realization of major corporate fraud.

The President has worked hard to be a positive influence on our economy, and I believe he has been very successful. His belief in the natural strength and resilience of our free-market system has been essential, and he has backed up that belief with tax cuts that have helped every American who pays taxes.

The tax relief acted as a stimulus because it reduced the burden of government, and whenever the load is lightened our economy tends to respond with growth and job creation... which is exactly what we are seeing today.

Jessica, from Arlington, VA writes:
Is outsourcing really as serious a problem as everyone makes it out to be? Isn't it true that other countries, such as Japan, create jobs here in the U.S. by basing some of their production here? Thanks for taking the time to answer questions.

John Snow
And thank you for asking a good question, Jessica. I addressed a similar question with Ross from Florida earlier, so I won't repeat myself entirely, but it is worth emphasizing that 12 million American jobs depend on exports and 6.4 million Americans receive paychecks from foreign-owned firms.

And thank you for asking a good question, Jessica. I addressed a similar question with Ross from Florida earlier, so I won't repeat myself entirely, but it is worth emphasizing that 12 million American jobs depend on exports and 6.4 million Americans receive paychecks from foreign-owned firms.

And while the loss of any American job is a concern for the President, and job creation at home is his top economic priority, he strongly believes that openness, not isolationism, is best for our economy and for America's world-class workers.

Marie, from C writes:
For months I have heard from the President about our economy and his tax cuts. Will they be his objective or will they be changed? If so, what will the changes be. His promise was to keep low taxes and make stiffer laws and keep businesses in check is this still his objectives?

John Snow
Yes, Marie, lower taxes and corporate responsibility are two of the President's top priorities. He is calling on Congress right now to extend his tax cuts, allowing Americans to keep more of their hard-earned money.

He has also made it clear that CEOs must conduct themselves with the highest ethics and be accountable to their employees and investors. If they commit fraud, they will be punished severely.

Today is the two-year anniversary of the President's Corporate Fraud Task Force, organized to combat corporate fraud and therefore protect investors and consumers from corrupt practices that are not worthy of our great free-market system.

Its creation, in addition to the signing of Sarbanes-Oxley, was part of the President's swift and effective response to the realization of corporate scandals in recent years. The President's actions to crack down on corporate fraud helped to restore investor confidence and bolstered our economic recovery.

Eugene, from Seat Pleasant writes:
Good afternoon Mr. Secretary. I run a local non-profit youth organization that teaches youth how to start and successfully run a business. In your opinion, as secretary of the treasury, how important is teaching entrepreneurship to our American youth at an early age? Thank you for your response.

John Snow
It sounds like you are doing great work, Eugene; I applaud you for it. I agree that fostering a spirit of entrepreneurship is extremely important. We really do lead the world in this area, and it is one of the main reasons why our economy is so strong.

Growth and prosperity occur almost organically in an environment that is conducive to entrepreneurship, one where the only thing that stands between an individual's marketable idea and true success is that individual's passion and desire to work hard and, of course, access to capital to finance the idea.

And we should never forget that jobs come from businesses that are successful, businesses that are growing, expanding and investing. This is why you'll often hear the President saying: "what is good for small business is good for America."

It's America's small-business entrepreneurs who are creating three out of four of our net new jobs - the critical element for any economy, anywhere, at any time.

Joe, from Chicago, Il writes:
Thank you Mr. Snow for taking the time to answer my question. As Treasury Secretary one of your biggest concerns must be the budget deficit. I heard that the President's plan is to reduce the deficit in half over the next five years. Is this realistic? What plans are the administration going to use to accomplish this? Thank you.

John Snow
You are right, Joe, the deficit is of concern to me. It's too high and it's unwelcome. But it is understandable, given the extraordinary circumstances of recent history.

Remember that we are fighting a type of war that we have never fought before. We are fighting an enemy that requires a much broader variety of government resources than anything we've ever confronted. And we began this fight when we were economically wounded.

We believe that we can achieve what the President's budget calls for, and we call on Congress to pass that budget. Josh Bolten, director of the Office of Management and Budget, designed a sound budget plan that would reduce the deficit by half over the next five years.

Making the tax cuts permanent is an important part of deficit reduction because lower taxes have stimulated our economy so effectively. A growing economy leads to increased Treasury receipts, and when combined with restrained spending, deficits can be shrunk.

John Snow
Thank you so much for all of your terrific questions. If you want to hear more about our economy today, don't miss Chairman Alan Greenspan's testimony on Capitol Hill.

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