This is a partial transcript from Your World with Neil Cavuto, January 7, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: Well, how much stimulus and how soon? With us now from the White House, budget director Mitch Daniels.

Mr. Director, good to see you.

MITCH DANIELS, WHITE HOUSE BUDGET DIRECTOR: Hey, Neil.

CAVUTO: You're been a little busy, I guess.

DANIELS: Most days, yes.

CAVUTO: OK. Now, let's get to the issue here, how soon this comes to pass, the president wants to make a lot of those future tax cuts retroactive to January 1. How doable is that?

DANIELS: I think it is practical. It has happened before. This is the third time in three years that the president has acted to stimulate the economy or to provide for long-term growth. And we hope for a similar result, bipartisan support and prompt passage.

CAVUTO: As you know, Mr. Director, the Democrats are saying you bust the deficit again, what do you say?

DANIELS: Nobody is happy about a return to deficit. But we have priorities that really won't wait. Winning a war, defending Americans here at home, and of course, a stronger economy. It is a strong economy that produces balanced budgets. Not the other way around. And we'll do all we can on the deficit front, and that means controlling spending. We'll welcome their support on that count.

CAVUTO: Director, what happened so fast? We were hearing an internal fight within the administration among some of economic powwows, yourself included, I guess, that argued not to do something as dramatic as what the president ultimately did, elimination of the dividend tax for example, front-loading even the tax rate cuts for the upper income folks. What happened between, let's say, last week and now?

DANIELS: Well, you had a process, Neil, in which those that knew didn't talk, and those that talked didn't know. The president was looking all along at a very wide spectrum of options and when he chose, he chose.  And he chose a bold plan because he doesn't feel we can afford to take a chance. We've moved the economy from recession that he inherited to recovery. But it's an inadequate recovery and one that has got to become stronger.

CAVUTO: The estimates that some of the Wall Street crowd are putting toward this package if the president gets everything he wants, would be to make the deficit significantly worse than it is already, that a $300 billion deficit isn't out of the question. How do you answer that?

DANIELS: Well, we won't know. But clearly deficits will get worse if the economy doesn't get stronger and frankly if the markets don't get stronger. We had a revenue bubble there for a while which popped with a vengeance about the year 2001. And only a stronger economy will bring back the kind of revenue we need to fund the nation's priorities.

CAVUTO: Do you feel any concern, Mr. Director, that so far Alan Greenspan has not weighed in on this package and that maybe his silence is telling?

DANIELS: I don't know. And I wouldn't second-guess the chairman either as to his views or the timing of them. But I think the general reaction has been a very positive one, that once again, for the third time, the president has produced a package that's aggressive, that's balanced and has the interest of all Americans at heart.

CAVUTO: How do you guys propose to counter the Democratic argument that this is skewed to the rich?

DANIELS: With the facts. They, you know, might have waited until they saw the package. They would have saved themselves I guess a little embarrassment. This is a package that will average $1100 of tax relief to 92 million Americans, a very broad swath of the country. And many features are aimed directly at the middle and lower middle income classes. The family of four, making $39,000, well below the median income, will enjoy $1100 of relief. When all is said and done, very interestingly, the wealthy in America would pay an even larger share of the income tax than they do today. So the charge doesn't stand up and frankly is another tired rerun of a losing hand.

CAVUTO: Mitch Daniels, always a pleasure. Thank you, sir.

DANIELS: Thank you.

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