Treasury Secretary John Snow on Iraq, Economy

This is a partial transcript from Your World with Neil Cavuto, December 18, 2003, that was edited for clarity.

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NEIL CAVUTO, HOST: Some big economic news that probably is more pertinent to the global population, and that is the health of the globe's strongest economy.

Here to crunch some numbers of his own that have nothing to do with legal matters, the treasury secretary of these United States. I'm talking, of course, about John Snow.

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Secretary, good to have you.

JOHN SNOW, TREASURY SECRETARY: Good to be back, Neil. Good to be with you.

CAVUTO: I won't even ask you about the Michael Jackson case, all right?

SNOW: Thank you.

CAVUTO: Let me get your sense, though — we had a good rally in the market today, almost 100 points, on the heels of very good economic news. We're seeing more of this; you were saying we would see more of it. Are you satisfied with the pace?

SNOW: Well, I'm encouraged. It's clear, we are in the midst of a good recovery. We've turned the corner. The economy is growing, people are going back to work, businesses are more confident, they're spending. I think we're poised for good news on the economic front for some time to come.

CAVUTO: Let me switch gears to the Iraqi debt front. I know you have been talking to James Baker, one of your predecessors at the Treasury. He's been trying to go to the governments of France and Italy and Germany and have them forgive some of Iraq's debt.

Where do we stand on that?

SNOW: Well, I talked to former Secretary Baker just about an hour ago. And the reports are excellent. And there is now a broad-based agreement that we'll use the “Paris Club” to achieve substantial reduction in the Iraqi debt levels.

CAVUTO: What is substantial, Secretary?

SNOW: Well, I am not going to define it for you in dollars, but it is bigger than a breadbasket.

CAVUTO: All right. Now, we, of course, have been pushing for almost total forgiveness of debt. I guess that is not in the cards.

SNOW: Well, substantial. What we need...

CAVUTO: Substantial would be tens of billions?

SNOW: ... is substantial. Sure, substantial is tens of billions of dollars of debt reduction here. And the commitment is to do it soon, to move it forward in 2004.

CAVUTO: Are we brokering any sort of deal with either the French or the Germans that, you know, we are not letting you in on these contracts to rebuild Iraq but if you are forgiving of some of this debt to a greater degree than you might otherwise have been, well, things could open up?

SNOW: Well, I won't go into the details of my conversation with Secretary Baker.

CAVUTO: You can always feel free.

SNOW: But let me just say that I think we have made real progress, real understandings, and it is important to see the rest of the world, France, the U.K., Germany, Russia, where the secretary is now, all embracing this idea of the need for substantial debt relief. Without substantial debt relief, the Iraqi people will not have the opportunity for the peace and prosperity that they deserve.

CAVUTO: Secretary, is it fair to say, though, that if these countries are forgiving as much debt, whatever it is, tens of billions or more, that they are more inclined, especially those that were not part of this coalition effort, to be part of the rebuilding of Iraq?

SNOW: Well, I think the fact that they are willing to forgive the debt, to entertain the broad conceptual idea of substantial debt reduction on a timeframe that has it moving forward fast in 2004, suggests they want to be part of the reconstruction effort.

CAVUTO: They clearly want to. Will they?

SNOW: Well, time remains to be seen. But they are making the right gestures, they're making the right steps.

CAVUTO: In other words, the moves they've made now is enough to make you and the president feel that maybe they are deserving?

SNOW: Well, I'm not saying that. What I'm saying is that the fact that they would embrace the idea of debt relief is very encouraging to us, and it greatly increases the prospects for eventual peace and prosperity in Iraq. And gives Iraq a real lift as it proceeds with its own representative government.

CAVUTO: Do you believe, finally, stating on the economy here, that we are out of the woods, that it is not going to be an issue for Democrats next year as far as weakness? They have been talking about the weak job recoveries that we have been seeing, that it has been tepid, that this president is going to have the worst jobs record since Herbert Hoover.

SNOW: I think we're going to have a good economy. I think all the signs point to a good recovery. Actually, an accelerating recovery in which we'll see more and more jobs created, continuing strong capital spending, continuing high productivity, low inflation, low interest rates. I think we are — as somebody described it to me recently, we're getting into the sweet spot of the economy.

CAVUTO: Treasury Secretary John Snow, always a pleasure seeing you. Have a very merry Christmas.

SNOW: Thanks, Neil. Good to be with you.

CAVUTO: The treasurer of these United States, John Snow.

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