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 Home > News & Policies > October 2003

For Immediate Release
Office of the Press Secretary
October 30, 2003

Fact Sheet: Tax Relief Helps Economic Growth

Administration Actions Are Helping to Fuel Economic Recovery

The American economy grew at a rapid pace of 7.2 percent during the third quarter of this year -- the best since 1984. The growth rate accelerated from a 3.3 percent rate in the second quarter.

The President's Jobs and Growth tax relief package helped fuel the surge in the economy in the third quarter. It brought economic activity to a higher level, which increases incomes and living standards for American workers.

Gary MankiwPresident's Economic Adviser Greg Mankiw Discussed the Economy. Read the transcript.
The President's policies will continue to provide substantial stimulus over the coming year. While most private forecasters predict the economy will not continue to grow as fast as it did in the third quarter, they expect it to be above the historical average.

Job creation has yet to take hold. But there are signs that the labor market is starting to improve, such as the recent decline in new claims for unemployment insurance and the recent increases in temporary employment.57,000 new jobs were created in September, the first gain in non-farm payroll employment since January.

Other promising signs for the economy include:

  • The value of U.S. stock markets has increased $2 trillion since the beginning of this year.
  • Disposable personal income is up 5.8 percent at an annual rate in 2003. o The U.S. homeownership rate was 68.4% in the third quarter--its highest level ever.
  • Productivity growth remains strong, which has bolstered business profits.
  • Orders of manufacturing goods have been increasing since earlier this year.
  • Shipments of durable goods have increased since this summer after a period of decline and stagnation. Orders have been above shipments since early 2003, suggesting future strengthening.
  • Consumer confidence has also increased. Measures of consumer sentiment are well above the levels seen just before the Iraq war.

Gary MankiwNEC Director Steve Friedman Discussed the Economy. Read the transcript.
America's economy experienced the unprecedented triple shock of a recession, economic disruption due to September 11 and the War on Terrorism, and corporate accounting scandals. President Bush acted promptly to help America's workers by providing tax relief to put more money in families' pockets and encourage businesses to grow and invest. Tax relief brought substantial savings to families and helped fight back the effects of the recession. Without the President's tax cuts, as many as 1.5 million additional Americans could have lost their jobs. More Work to Be Done -- The President's Six Point Plan for the Economy

There is still work to be done. The President will not be satisfied until every American who wants a job can find one. While the most recent economic data is cause to be optimistic, we cannot be complacent. That is why the President will continue to push for his 6-point economic plan that includes new actions to promote economic growth and jobs.

Making Health Care Costs More Affordable and Predictable. President Bush proposed allowing small businesses to pool together to purchase health coverage for workers at lower rates; expanding medical savings accounts to give workers more control over their health insurance and costs; and reducing frivolous and excessive lawsuits against doctors and hospitals that drive up insurance costs for workers and businesses.

Reducing the Lawsuit Burden on Our Economy. President Bush has proposed, and the House has approved, measures that would allow more class action and mass tort lawsuits to be moved into Federal court -- so that trial lawyers will have a harder time shopping for a favorable court. The President's reforms would also ensure that, in a class action lawsuit, most of the benefits of a settlement will actually go to the people who were injured, rather than into the pockets of trial lawyers.

Ensuring an Affordable, Reliable Energy Supply. President Bush has proposed a comprehensive national energy plan to upgrade the Nation's electrical grid, promote energy efficiency, increase domestic energy production, and provide enhanced conservation efforts, all while protecting the environment. It is time for Congress to finish its work and pass legislation based on the President's energy plan.

Streamlining Regulations and Reporting Requirements. The President will continue to work to simplify and streamline regulations, along with ensuring that well-intentioned compliance requirements do not have the unintended effect of reducing jobs. The Administration also recently streamlined tax reporting requirements for small businesses, helping 2.6 million small businesses save 61 million hours of unproductive work this year.

Opening New Markets for American Products. President Bush recently signed into law new free trade agreements with Chile and Singapore that will enable U.S. manufacturers to compete on a level playing field in these markets for the first time -- and he will continue to work to open new markets for American products.

Enabling Families and Businesses to Plan for the Future with Confidence. Right now, some key elements of the tax relief passed by Congress and signed into law by President Bush -- such as the tax rate reductions, the increase in the child tax credit, the elimination of the death tax, and the new incentives for small business investment -- will expire in a few years. President Bush urges Congress to make these vital tax reductions permanent so America's families and businesses can better make decisions for their financial futures.