Josh Bolten, Director of the White HouseOffice of Management and Budget

This is a partial transcript from Your World with Neil Cavuto, November 7, 2003, that was edited for clarity.

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NEIL CAVUTO, HOST: Continued signs that the economy is getting stronger, as we’ve been telling you. The latest unemployment number is getting smaller, and the jobs figure is getting bigger. But is this just a temporary blip, or can we say goodbye to that time-warn phrase "jobless recovery (search)?" Let’s ask the president’s right-hand man on these issues. I’m talking about Josh Bolten, the director of the White House Office of Management and Budget.

Director, thank you for coming.

JOSH BOLTEN, WHITE HOUSE OMB DIRECTOR: Thanks for having me.

CAVUTO: You like what you heard today?

BOLTEN: Very much. The news was good news. We see that we have created in this economy a quarter-million jobs in just the last two months. So that is a very good sign that the economy is on the mend and that we are getting good, solid job growth and that the president’s policies are working.

CAVUTO: You know, there are some who are looking at the early numbers so far for November, that they are looking absolutely boffo and that we could see substantial jobs growth, over 250,000. Are you in that camp?

BOLTEN: I’m not in any camp on that. Even when I was in the investment banking world, I didn’t hazard making guesses about what would happen with the stock market or with job growth.

What we do know is that we have got the right policies in place, we have got good economic growth going. The tax cuts that the president and Congress have put in place are having an effect. And we should be seeing good, solid job growth in the months and hopefully years ahead.

CAVUTO: Director Bolten, if you don’t mind, I want to relay to you what some Democrats have been saying and telling me today and others at Fox over the course of the day with this economic data, that it is short lived, and the benefit that we’re seeing with the president’s tax cuts will be short lived, too. And they say the earliest signs seem to be in some retailers, where credits and relief seem to be sort of petering out and now we are back to square one.

What do you say?

BOLTEN: No, I don’t think that is the way it works at all. The tax cuts have only had a part of the effect that they’re going to have. Those effects will linger on.

There will be substantial tax cuts going forward in the year ahead. And hopefully we’ll be making those tax cuts permanent so we permanently build in the benefits that they have for the economy. But, I will accept this point, which is, that we still have a ways to go. We still have a lot of unemployed people in this country, and the president will not be comfortable until everybody who is looking for a job can find a job.

CAVUTO: Director, there is some concern out there about the deficits. Alan Greenspan was saying as much yesterday. He’s worried about them. Some people say that this president hasn’t found a spending measure that he doesn’t like, that he is not really resolute on spending cuts and that these deficits are going to get worse, a lot worse.

What do you say?

BOLTEN: We do see deficits getting worse for the year ahead. We have projected that for some time. But we see deficits peaking in fiscal ‘04. And with the president’s program in place, we see that deficit being cut in half over the next five years. But that does mean continuing the president’s strong pro-growth economic policies and it means exercising some spending restraint.

The president has exercised spending restraint in the budgets that he’s proposed to the Congress. This year we’re getting a good response from the Congress, I think. The leadership on both sides of the Congress, and the leadership in the Appropriations Committees seem to be working hard to live within the budget that the president has given them.

CAVUTO: But, you know, your old friends on Wall Street don’t buy that, sir. They seem to say that this president if so concerned about excessive spending, then pull out the veto pact. Veto a lot of the stuff that is extra frill.

Ronald Reagan did it many, many, many times, and obviously we still had to deal with deficits then. But this president has to do it as well.

BOLTEN: Well, Ronald Reagan was facing some hostile congresses. The president is trying to work with the leadership in the Congress.

Let me take you back to some data. The last Clinton budget had growth in non-defense discretionary spending of about 15 percent. The president’s first budget brought that down to about 6 percent; the second one down to about 5 percent.

The one we’re dealing with now has brought that growth in discretionary non-defense spending down to the 2 to 3 percent region, and I expect we’ll continue that trend in the ‘05 budget. That is fiscal discipline. And that is something that we should be working hard to accomplish in the months ahead.

CAVUTO: We shall see. Josh Bolten, White House budget director, we appreciate it, sir.

BOLTEN: Thank you.

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