Steve Friedman
Good afternoon -- I apologize for being a little bit late.

Cheryl, from Lafayette writes:
Talk about the budget deficit. Won't this impact the recovery and aren't you worried that it is too high?

Steve Friedman
We are not pleased about budget deficits, but in the context of an economy which has needed stimulus, and a war on terror, the highest priorities are getting people back to work, and national security.

The deficits are manageable, and the President has a target of cutting it in half over the next five years with pro-growth policies and spending discipline in Washington.

Bobbie, from White Plains writes:
Steve, who really benefited from the tax cuts? The claim that you hear is that these were tax cuts for the rich and the rich only.

Steve Friedman
The cumulative benefit of the three laws for family budgets and business investment is enormous. Under these laws, this year:

• A family of four earning $40,000 will get tax relief of $1,933;

• 109 million American taxpayers will see their taxes decline by an average of $1,544;

• Nearly 5 million individuals and families will see their income tax liabilities eliminated completely;

• 42 million families with children will receive an average tax cut of $2,067;

• 13 million elderly individuals will receive an average tax cut of $1,795;

• 25 million small business owners will save $2,853; and

• Lowering tax rates on dividends and capital gains will cut taxes an average of $798 for 26 million investors, including seven million seniors who will save an average of $1,088.

Matthew, from Pawtucket, RI writes:
The economic indicators show that the economy is improving but without jobs. It seems that over the years, federal state and local regulationsfeesenvironmental constraintstaxes and international commitments have created an anti-business environment in the United States forcing many jobs overseas. There has also been an attitude that developed in the 90's that business and success are evil to the point where jobs have been lost. Lowering personal and corporate taxes are a great first step.

My question is, what can the admistration and congress do to promote a a more positive atmosphere for entrepenerualism and a cultural attitude change that says business (and even big business) is not our enemy but what keeps this country moving and food on the table?

Sincerely, Matt T

Steve Friedman
After enactment of the Jobs & Growth plan earlier this year, the President laid out the next steps for economic growth. He is now pushing his Six-Point Plan to create an environment where the economy can continue to grow, and where firms can create new jobs.

Here's the short version of his six point plan:

• Making Health Care Costs More Affordable and Predictable
• Reducing the Lawsuit Burden on Our Economy.
• Ensuring an Affordable, Reliable Energy Supply.
• Streamlining Regulations and Reporting Requirements.
• Opening New Markets for American Products. American workers can compete with anyone in the world when given a chance.
• Enabling Families and Businesses to Plan for the Future with Confidence.

Michael, from Powell, TN writes:
Did 911 have an impact on the economy? Maybe a reason why it is down?

Steve Friedman
Yes. The 9/11 attacks were one of a series of shocks that the U.S. economy has faced, beginning in the year 2000.

In 2000, air started leaking from the stock market bubble, and corporate capital expenditures started declining. This led to a recession, which was thankfully short and shallow, due in very important part to the President's pro-growth policies enacted in 2001.

Alan, from North Carolina writes:
Mr. Friedman, I'll be honest with you. I'm a conservative Democrat who voted for President Bush because I was afraid of his opponent's leadership qualities. I still feel like I made the right decision, but my brother-in-law is out of work and it has been difficult for him and for my family. I want to support you, but I want to see some evidence that the economy is bouncing back. Real evidence.

Steve Friedman
This Thursday there will be a very important economic data release -- how fast the U.S. economy grew in the 3rd quarter of this year.

We are seeing signs of economic growth, but the President still won't be satisfied until every American who wants to find a job can find a job. He took bold action earlier this year on his Jobs & Growth tax bill, and he's now pushing for his six-point economic plan.

Keep your eye on the economic reports over the next few weeks.

Matt, from Milwaukee writes:
How can President Bush's tax cuts positively impact the economy when previous tax cuts or refunds have failed to do so?

Steve Friedman
I respectfully disagree that previous tax cuts or refunds have failed to help the economy, and would refer you to CEA Chair Greg Mankiw's textbook "Macroeconomics" for another example from the 1960's.

The economic problems we faced, beginning in 2000, were not unique to the United States. The effect of the President's tax bills has to be measured against the situation in other major economies around the world, as well as compared to where the economy would have been without the tax cuts.

Although we are far from satisfied or complacent, the Council of Economic Advisers estimates that, by the end of 2004, the tax relief signed by President Bush in 2001, 2002, and 2003 will have:

• reduced the unemployment rate by as much as 1.6 percentage points; and

• increased real GDP by as much as 3.5 to 4 percent compared to where it would otherwise have been, had the tax relief not been enacted.

Ed, from Manhasset, NY writes:
How much of a role will high tech play in driving the recovery, and when should we expect to see results of the tax cut aimed at encouraging small business capital investments?

Steve Friedman
High tech is an important factor in the current recovery.

And the President's Jobs & Growth plan increased the amount that a small business could expense for capital investments from $25,000 to $100,000. We have not yet seen statistics on small business, but we're hearing positive anecdotal evidence.

Frank, from Rose City writes:
Mr. Friedman I know you can't really get into politics, but there are candidates out there who are saying the President's tax cuts should be repealed. If that were to happen, what would happen to the economy?

Frank

Steve Friedman
The tax cuts proposed, advocated, and signed by the President helped pull the U.S. economy out of a recession, and are contributing substantially to stronger economic growth.

If the tax cuts were repealed, it would have a substantial adverse impact on the positive trends we are now seeing.

Steve Friedman
I enjoyed being with you, and look forward to next time.