Return to Transcripts main page
Live From...
Economy Grows at Record Pace
Aired October 30, 2003 - 15:09 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: Turning now to the nation's economy and the today's word that the third quarter was one of the nation's best in almost two decades. The government says the economy grew at a blistering 7.2 annual rate, the fastest quarterly growth rate since 1984.
Not surprisingly, the president saw today's numbers as a sign his economic policies, especially his tax cuts, are bearing fruit. In a speech today in Ohio, Mr. Bush said now is the time to stay the course.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Just as the economy is coming around, some over in Washington say now is the time to raise taxes. To be fair, they think any time is a good time to raise taxes.
(LAUGHTER)
BUSH: At least they're consistent.
(LAUGHTER)
BUSH: I strongly disagree. Tax relief put this nation on the right path. And I intend to keep America on the path through prosperity.
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
KING: President Bush today in Ohio.
With me now to talk more about this are Robert Reich. He was labor secretary in the Clinton administration. He's in Watertown, Massachusetts. And Republican Congressman Rob Portman of Ohio, he joins us from Capitol Hill.
Gentlemen, thank you, both.
Bob Reich, let me start with you; 7.2 percent growth in the last quarter, for a president gearing up for the election, happy day for the White House, is it not?
ROBERT REICH, FORMER CLINTON LABOR SECRETARY: Definitely a happy day for the White House, John. This is the kind of news that the White House has been waiting for.
It's also a great relief to a lot of people around the country. Let's face it. All of us have an tremendous interest in getting this economy going again.
KING: So, Rob Portman, maybe you don't want to say anything. The Democrats are saying it's a good day for the president. But, of course, another thing the Democrats say, Congressman Portman, is: Mr. President, great growth numbers. Where are the jobs?
Where are they, sir?
REP. ROB PORTMAN (R), OHIO: Well, the jobs should follow.
As you know, last month we had some job growth, finally, after three years of negative growth. And we hope that we'll see some numbers next week. We should know by next week on the job growth for the third quarter. Typically, as you know, and Robert Reich saw when he was at the Department of Labor, job growth does follow this kind of growth numbers, usually more rapidly than we've seen. We saw decent growth in the first quarter and second quarters. And now we're seeing tremendous growth, the best in 19 years. So we would expect job growth to follow.
KING: Is that a fair assessment, Robert Reich? Should the Democrats be worried that this president will get job growth?
REICH: Look, this is the real question mark hanging over the economy.
The last three months, we've seen a total of 41,000 job lost. That is in fact the quarterly report. Now, when jobs come back is anybody's guess. Hopefully, they will come back soon. That's the hope of everybody who cares about the American economy and most people who care about people who don't have jobs.
But the question is, how soon? If jobs don't start growing fast, if a lot of Americans are still concerned about the possibility that they may lose a job or that their current job is precarious, they're not going to continue to spend a lot of money. Consumers cannot rely solely on the tax cut to stimulate their desires to go back to the malls. And we could have a very, very slow recovery. Obviously, John, that means the White House will not be breaking out the champagne corks yet.
KING: Congressman Portman, you are a defender of this president now. You worked for his father in the first Bush White House when some of the numbers did start to come back when the former President Bush was seeking reelection. But, as Bob Reich just said, people didn't feel it yet. They didn't see enough jobs in the economy yet. By Election Day, they did not feel it.
Is that a concern to you? And should it be a concern of this president?
REICH: Well, the concern of this president is that we getting jobs coming back. And I think that's going to happen.
The pro-growth tax policies that he, frankly, pushed hard in these congresses on are beginning to bear fruit. The tax policy of 2001, 2002 and now 2003 were all aimed at increasing business investment, were all aimed at allowing the consumers to spend more, put more money in people's pockets. And if you look at these numbers for the last quarter, John, that's exactly what happened. Business investment is up substantially. Exports are up.
The consumers are staying in the game. Robert Reich talked about the consumer. Even through the tougher times these last few years, people...
KING: Well, Congressman, let me jump in on this point right then. If all this is getting so good and it's because of the Bush tax cuts, why not have another tax cut? Many conservatives would like to see the president come back with another broad-based tax cut. He has said he will not do it. Many think it's because he's afraid the Democrats will get him on class warfare or get him on the deficit issue. Why not another one?
PORTMAN: Well, I think we've got a pretty good balance right now. There's a lot of stimulus in the economy, both on the spending side, particularly with the Department of Defense and with our war in Iraq and war against terrorism, and on the fiscal side with regard to tax policy.
We've put in some place some very important pro-growth tax policies that are now beginning to bear fruit. So we probably want to see how those turn out. We do have the opportunity to help with regard to our international competitiveness in the short term, because, as you know, the Europeans have taken our tax system to court, in terms of how we subsidize exports.
So I think there will be another tax bill coming along before long. If won't be one that loses a lot of revenue, even by the Washington measuring standards. But it will be one that helps us on our international competitiveness. So we need to keep up our efforts that we've begun of pro-growth tax policy. And I think this president may support that.
It won't be a huge tax cut next year. But we need to stay the course. I think what we are finding out is that if we can growth this economy, we can indeed make progress on the deficit. We just learned that the deficit for 2003 will be $80 billion less
(CROSSTALK)
KING: Sorry, sir, I need to stop you, so I can give Bob Reich the last word.
Sir, all the Democratic candidates are looking at these numbers today. If you were advising them on how to address this president, get at this president on the issue of the economy, in two sentences or three, how would you do so, sir? REICH: Well, John, I think the Democrats are going to be saying, it's great that the economy is coming back, but what about jobs? They're also going to be worried about the deficit. We all ought to be worried about that.
If in fact the economy is coming back without jobs, it could be that inflation is a problem. It could be that, with that great, big deficit out there, that interest rates start going up. That could choke off the economy. So, again it's too early to celebrate. Obviously, this is all good news for everybody. But it won't really be good news for everyone until jobs start coming back.
KING: Gentlemen, we need to leave it there for today. I thank you both.
PORTMAN: Thanks, John.
KING: Congressman Rob Portman on Capitol Hill, former Labor Secretary Robert Reich in Watertown, Massachusetts, thank you both very much.
PORTMAN: Thanks very much.
KING: Thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired October 30, 2003 - 15:09 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: Turning now to the nation's economy and the today's word that the third quarter was one of the nation's best in almost two decades. The government says the economy grew at a blistering 7.2 annual rate, the fastest quarterly growth rate since 1984.
Not surprisingly, the president saw today's numbers as a sign his economic policies, especially his tax cuts, are bearing fruit. In a speech today in Ohio, Mr. Bush said now is the time to stay the course.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Just as the economy is coming around, some over in Washington say now is the time to raise taxes. To be fair, they think any time is a good time to raise taxes.
(LAUGHTER)
BUSH: At least they're consistent.
(LAUGHTER)
BUSH: I strongly disagree. Tax relief put this nation on the right path. And I intend to keep America on the path through prosperity.
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
KING: President Bush today in Ohio.
With me now to talk more about this are Robert Reich. He was labor secretary in the Clinton administration. He's in Watertown, Massachusetts. And Republican Congressman Rob Portman of Ohio, he joins us from Capitol Hill.
Gentlemen, thank you, both.
Bob Reich, let me start with you; 7.2 percent growth in the last quarter, for a president gearing up for the election, happy day for the White House, is it not?
ROBERT REICH, FORMER CLINTON LABOR SECRETARY: Definitely a happy day for the White House, John. This is the kind of news that the White House has been waiting for.
It's also a great relief to a lot of people around the country. Let's face it. All of us have an tremendous interest in getting this economy going again.
KING: So, Rob Portman, maybe you don't want to say anything. The Democrats are saying it's a good day for the president. But, of course, another thing the Democrats say, Congressman Portman, is: Mr. President, great growth numbers. Where are the jobs?
Where are they, sir?
REP. ROB PORTMAN (R), OHIO: Well, the jobs should follow.
As you know, last month we had some job growth, finally, after three years of negative growth. And we hope that we'll see some numbers next week. We should know by next week on the job growth for the third quarter. Typically, as you know, and Robert Reich saw when he was at the Department of Labor, job growth does follow this kind of growth numbers, usually more rapidly than we've seen. We saw decent growth in the first quarter and second quarters. And now we're seeing tremendous growth, the best in 19 years. So we would expect job growth to follow.
KING: Is that a fair assessment, Robert Reich? Should the Democrats be worried that this president will get job growth?
REICH: Look, this is the real question mark hanging over the economy.
The last three months, we've seen a total of 41,000 job lost. That is in fact the quarterly report. Now, when jobs come back is anybody's guess. Hopefully, they will come back soon. That's the hope of everybody who cares about the American economy and most people who care about people who don't have jobs.
But the question is, how soon? If jobs don't start growing fast, if a lot of Americans are still concerned about the possibility that they may lose a job or that their current job is precarious, they're not going to continue to spend a lot of money. Consumers cannot rely solely on the tax cut to stimulate their desires to go back to the malls. And we could have a very, very slow recovery. Obviously, John, that means the White House will not be breaking out the champagne corks yet.
KING: Congressman Portman, you are a defender of this president now. You worked for his father in the first Bush White House when some of the numbers did start to come back when the former President Bush was seeking reelection. But, as Bob Reich just said, people didn't feel it yet. They didn't see enough jobs in the economy yet. By Election Day, they did not feel it.
Is that a concern to you? And should it be a concern of this president?
REICH: Well, the concern of this president is that we getting jobs coming back. And I think that's going to happen.
The pro-growth tax policies that he, frankly, pushed hard in these congresses on are beginning to bear fruit. The tax policy of 2001, 2002 and now 2003 were all aimed at increasing business investment, were all aimed at allowing the consumers to spend more, put more money in people's pockets. And if you look at these numbers for the last quarter, John, that's exactly what happened. Business investment is up substantially. Exports are up.
The consumers are staying in the game. Robert Reich talked about the consumer. Even through the tougher times these last few years, people...
KING: Well, Congressman, let me jump in on this point right then. If all this is getting so good and it's because of the Bush tax cuts, why not have another tax cut? Many conservatives would like to see the president come back with another broad-based tax cut. He has said he will not do it. Many think it's because he's afraid the Democrats will get him on class warfare or get him on the deficit issue. Why not another one?
PORTMAN: Well, I think we've got a pretty good balance right now. There's a lot of stimulus in the economy, both on the spending side, particularly with the Department of Defense and with our war in Iraq and war against terrorism, and on the fiscal side with regard to tax policy.
We've put in some place some very important pro-growth tax policies that are now beginning to bear fruit. So we probably want to see how those turn out. We do have the opportunity to help with regard to our international competitiveness in the short term, because, as you know, the Europeans have taken our tax system to court, in terms of how we subsidize exports.
So I think there will be another tax bill coming along before long. If won't be one that loses a lot of revenue, even by the Washington measuring standards. But it will be one that helps us on our international competitiveness. So we need to keep up our efforts that we've begun of pro-growth tax policy. And I think this president may support that.
It won't be a huge tax cut next year. But we need to stay the course. I think what we are finding out is that if we can growth this economy, we can indeed make progress on the deficit. We just learned that the deficit for 2003 will be $80 billion less
(CROSSTALK)
KING: Sorry, sir, I need to stop you, so I can give Bob Reich the last word.
Sir, all the Democratic candidates are looking at these numbers today. If you were advising them on how to address this president, get at this president on the issue of the economy, in two sentences or three, how would you do so, sir? REICH: Well, John, I think the Democrats are going to be saying, it's great that the economy is coming back, but what about jobs? They're also going to be worried about the deficit. We all ought to be worried about that.
If in fact the economy is coming back without jobs, it could be that inflation is a problem. It could be that, with that great, big deficit out there, that interest rates start going up. That could choke off the economy. So, again it's too early to celebrate. Obviously, this is all good news for everybody. But it won't really be good news for everyone until jobs start coming back.
KING: Gentlemen, we need to leave it there for today. I thank you both.
PORTMAN: Thanks, John.
KING: Congressman Rob Portman on Capitol Hill, former Labor Secretary Robert Reich in Watertown, Massachusetts, thank you both very much.
PORTMAN: Thanks very much.
KING: Thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
