• This is a partial transcript from "Your World with Neil Cavuto," August 30, 2004, that was edited for clarity.

    NEIL CAVUTO, HOST: Earning less, spending more — that pretty much wraps up some key economic data that was released this morning. Personal income (search) up, but not as much as some economists had predicted. Personal spending (search) up, but a lot more than economists had predicted.

    With us right now, the administration’s point man, Josh Bolten, who runs the Office of Management and Budget.

    Director Bolten, always good to have you.

    JOSH BOLTEN, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: Thank you, Neil.

    CAVUTO: I wonder if this data today supports your case or supports states the Democrats case that states, pretty much, the economy’s slowing.

    BOLTEN: It supports our case, and what it’s showing is that we’ve got good steady growth, good stability in the economy. We’d like to see bigger numbers, and we have seen pretty good numbers out over the last year.  We’ve got almost four percent growth out of the last, which is somewhere around the best in 20 years. Our economists see about the same going forward. So, I think, the numbers for us look very good, no matter how hard anybody else might try to talk it down.

    CAVUTO: They’re looking good; they’re not looking as good as they’ve been. There’s a worry that the job growth we’ve seen, director, has slowed.

    We’ll get a big job number out on Friday — any predictions?

    BOLTEN: No.

    CAVUTO: No?

    BOLTEN: One thing I’ve learned in this job is don’t make predictions about things like job numbers. But, what I can tell you is that over the last, less than a year, we’ve had 1.5 million new jobs in the economy.

    Our economists, and I think most Wall Street economists now, now see that we’ve got good steady growth going in the economy. We should see the jobs numbers picking up.

    CAVUTO: All right, but lately, there’s the fear that we’re going to see a series of slow months. It might be as little as 50,000 jobs gained in this month of August. And that’s worrying some in the administration — that there’s a hiccup here. Is there?

    BOLTEN: I mean, we’re always concerned. We always want more jobs.  It doesn’t matter how many we’ve got. We always want more, until we get that unemployment rate basically down to zero.

    But we’re seeing pretty steady growth. I don’t think people should focus on one month or even two months. You’ve got to look at the trend.  And the trend is very strong.

    The other thing that we see in the numbers is we see good, strong business investment, and that’s the best thing possible for the economy.  Our economy has been held up largely by consumer spending over the last many months. And we’re now seeing business investment picking up, which means that they’re going to need more people. And I think that’s really the best thing for the economy, the best news we’ve got going.

    CAVUTO: Let me get your gauge of the second term agenda, director.  Obviously, everyone looks forward to what the president is going to say Thursday as to set out a blueprint to justify another four years in office.  But the deficits quota, the hamstring — it’s not as if he can do a lot, because there’s no money there to do stuff with — right?

    BOLTEN: Well, there’s still plenty to be done. You don’t have to spend a lot of extra money to have good policies in place, and the president will lay out, I think, a very aggressive agenda.

    Go back four years ago, and the president talked about five or six important things: He talked restoring the national defense; he talked about providing prescription drugs under Medicare; he talked about reforming our education system; he talked about getting faith-based activities in this country back on an even par with other activities. All of those things he’s done, and I think he’s done those in a responsible way.

    We can continue those kind of policies without putting a big dent in the budget. We’ve got a plan that cuts the budget deficit in half over the next five years. We’re not just on track with that; I think we’re ahead of...

    CAVUTO: But that plan is unrealistic if you make the tax cuts permanent — right?

    BOLTEN: No. The plan assumes that we’re making the tax cuts permanent.

    CAVUTO: Will that be among the things the president pushes Thursday night — making them permanent?

    BOLTEN: I don’t want to pre-judge his speech, but I know that the president does want to make those tax cuts permanent. That’s an important part of his agenda. The most important thing that we’ve done for the federal budget over the last four years is restore economic growth. That’s what really put us into the budget hole that we’re in now was the recession that the president inherited on the way in to office.

    So the most important thing we could do now is ensure that the growth continues, and that means keeping the tax cuts going. Reversing on tax cuts would be the worst possible thing to do, at this point.

    CAVUTO: Do you think that the ongoing war on terror and what expenditures might have to be pushed toward Iraq make whatever your priorities are a moot point; that it’s going to be very hard to commit to that when the war on terror, the war on Iraq get prohibitively more expensive.

    BOLTEN: We’ve got built into to the budget, we’ve got a lot of additional spending for defense, which the president committed from the beginning. We’ve got a lot of extra homeland security spending. That’s been about tripled over the course of this president’s term. So that’s baked in to the budget. And the president has made clear, whatever we need to spend to protect this country, we will spend. That’s got to be the top priority.

    But right now, it looks like we can meet those priorities. We can meet other domestic priorities, as long as we tighten our belt elsewhere, and still cut that deficit in half over the next five years. I’m very confident about that.

    CAVUTO: Coming from Wall Street, did you think that you’d ever land in the middle of a political thicket like this on the propriety of tax cuts, deficits, and all this other stuff? Do you ever long for the days when you didn’t have to answer to a nation.

    BOLTEN: Those were easier days. They were more lucrative days for me, personally.

    CAVUTO: Right.

    BOLTEN: But there couldn’t be anything more rewarding than doing what I’m doing now — working for this president.

    CAVUTO: Josh, thank you again. I appreciate it.

    BOLTEN: Thank you.

    CAVUTO: Josh Bolten, the man who runs the Office of Management and Budget.

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