This is a partial transcript from Hannity & Colmes, January 15, 2003, that has been edited for clarity.

ALAN COLMES, CO-HOST: Earlier today, Sean sat down with Treasury Secretary John Snow (search) to find out how the economy is looking heading into the election year.


SEAN HANNITY, CO-HOST: Mr. Secretary, welcome aboard. Good to see you. Thank you for being with us.

JOHN SNOW, TREASURY SECRETARY: Thanks, Sean. Great. Great to be here.

SEAN HANNITY, CO-HOST: You've got an 8.2 percent growth rate, revised upwards, the single best quarter we've had in, what, 20 years.

SNOW: Yes. That's right. That's right.

HANNITY: How did it happen?

SNOW: Well, I think it happened largely because of the president's vision in pushing the tax cuts. There can't be any doubt about the fact that this economy's in a much better position because of the president's leadership on the tax front.


SNOW: And those lower taxes made a real difference. And we saw it really take hold in the third quarter with those very good numbers.

But we're not satisfied. You know, we're not going to be satisfied until everybody who wants a job has got a job and until this economy is really, really fully in a recovery.

HANNITY: One of the things, -- I have an article here, economists all across the board saying we expect strong growth in '04. You're confident. Four percent, five percent, what are your predictions?

SNOW: Well, we don't make the predictions, but we sure follow them. And the consensus of the blue chip private sector economists is four percent range, maybe a little over four percent.

HANNITY: But strong growth?

SNOW: Yes. The sort of growth that's going to give us job creation, too. And that's what we're looking for now, is to make sure that the jobs come back.

HANNITY: Historically in every recovery, because the president rightly did inherit a recession. But historically, the lagging indicator always deals with employment.

Why is that, and how soon do you think we'll see those numbers come around?

SNOW: Well, it's -- you're absolutely right. The president did inherit a recession. And it ended up being one of the shallowest on record because of the actions that he took.

But jobs come back always lagging the recovery, because businesses want to be sure the recovery is for real before they go out to make those commitments to new jobs.

HANNITY: I have actually spent time, in my spare time, what little I have, I went once to the Bureau of Labor Statistics (search).

Have we lost jobs in the last three years? Have we gained jobs? Because actually on the site, there are conflicting reports. And I know the Democrats are trying to say, no, we lost millions and millions of jobs. But I don't see that. When you look at total employment, it seems that we've increased.

Is my interpretation wrong?

SNOW: Well, there are two surveys, and they're in conflict. There's the household survey...

HANNITY: And non-farm.

SNOW: And -- that's right. And the business survey. And they're in conflict. And the household survey shows jobs have picked up. The business survey shows that they haven't.

Whichever is right -- whichever is right, we want to take -- do everything we can, take all of the steps necessary to see more jobs created.

We are encouraged by the fact that unemployment has fallen from the high point of 6.3, in this last quarter came down to 5.7. And that's encouraging, that continually marching down of the unemployment numbers.

And business confidence is coming back. Business spending is coming back. We just had a quarter in which construction was at 20-year highs. Housing was at 20-year highs.

HANNITY: Well, if you look at it, not only was this the strongest quarter since 1984, productivity the best rate since 1983, factory growth the best since 2000, stock market the highest it's been in, what, 18, 19 months. So I mean, those indicators are good.

After those figures came out about this great quarter of growth that we had, this unprecedented quarter -- we are in an election year -- Senator John Edwards (search) said, "The Bush administration has dug a deep hole, so deep, so wide, it's going to take a lot more than one quarter to get it on solid ground."

Howard Dean (search) said, the president has compiled the worst economic record since the Great Depression.

Dick Gephardt (search) is screaming, "It's a jobless recovery."

Are they talking down the economy? What do you make of their remarks?

SNOW: Well, I think I'm going to let them argue among themselves in the Democratic primary and see who emerges from that. We're going to focus on what it takes to get this economy in a full recovery, in a recovery that creates as many jobs as possible and that creates opportunities for everybody who wants work to find work.

And the job is not done. The president -- we have a lot of other things we need to do.

We need to address this problem of tort reform, because the existing tort reliability system is like a big tax on the economy.

And we need to deal with energy, because one of the worrisome things about the economy is that we don't have a good energy policy.


SNOW: The president is the forefront of pushing a good energy policy.

HANNITY: I would love to see us lessen our dependence on foreign oil. I'd love to see us tap into that resource known as ANWAR (search), the second largest oil find in history.

I've got to ask you about Paul O'Neill (search). And the former treasury secretary had some very harsh things to say about the president.

What is your reaction to this?

SNOW: Well, I thought the president's comments on that were very, very gracious. And the president I know is one who is fully engaged, who does ask tough questions, who pesters me all the time with questions.

HANNITY: I'm going to tell him you said that he pesters you...

SNOW: He does. He peppers me with questions -- not pesters. He peppers me with questions all the time.

HANNITY: You recovered.

Last question, and just as quickly as you can.

I'm a supply-sider.

SNOW: Right.

HANNITY: John Kennedy understood when you cut taxes, you get more revenues. Reagan doubled revenues in eight years.

Explain to the average person when they hear tax cuts, why do they think it will result in less revenues, and how does it really result in more?

SNOW: Well, to get the federal treasury growing, you've got to have a growing economy. And a growing economy, when you're in a recession, comes from giving people more of their own money. Because when people have more of their own money they do good things with it: they spend it.

And it's the largest disposable income in the hands of taxpayers, whose money it really is in the first place, who then use that money, spend that money, creates demand. And that leads to the recovery, and it leads to jobs.

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