John Snow, U.S. Treasury Secretary

This is a partial transcript from Your World with Neil Cavuto, July 22, 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: Will better news in the Iraq war front mean better news for the economy over here? Who better to ask than the man who sort of runs the whole economic show. I'm talking, of course, about the Treasury secretary of these grand United States, John Snow.

Mr. Secretary, good to have you.

JOHN SNOW, TREASURY SECRETARY: Neil, good to be back.

CAVUTO: The capture of [Saddam Hussein's sons Uday and Qusay] and then the reported confirmed death of them. Were you surprised?

SNOW: Well, I think anything that removes uncertainty about the course of progress in Iraq is positive, and that, certainly, removes some uncertainty. One more vestige of Saddam's regime is gone.

CAVUTO: How much do you think the war continues to weigh on people's mood?

SNOW: Oh, I think it's still there some. I think it will continue to be there some until we clarify that situation and get the Iraqi economy back on a better course, get the oil flowing.

Neil, with the sabotage to the oil facilities and the vandalism, there will continue to be some overhang there, but I think it's abating and that's positive.

CAVUTO: Donald Rumsfeld, the secretary of defense, had said that it is likely that we'll still see more American soldiers killed in Iraq that we — I'm paraphrasing here, sir. But he said essentially that that's the reality. Do you think the economy and American consumers in general can live with that reality and go on with their lives?

SNOW: That's a terrible reality to have to confront, but it is just a price we're going to have to pay for — for bringing order and peace, and eventually prosperity and hope to the Iraqi people.

It's a terrible price to pay. It's a terrible price, and it's awful getting up in the morning and reading the paper and seeing the news of one more American soldier dead or bombed or so on and so forth.

But the larger performance of the American economy, I think, depends on what goes on here, and I think we're seeing real good signs that this economy is beginning to take off.

CAVUTO: All right. Now you've also seen more economic numbers than even your pal Alan Greenspan at the Federal Reserve.

Any early read on what people are doing with that extra take-home pay they've been getting since the [tax cut]…

SNOW: Well, it's pretty early to say because it just started.


SNOW: The new withholding tables have just gone into effect the last couple weeks, and tomorrow and Friday, we'll see the first of the child credit checks go out to 25 million parents.

CAVUTO: In fact, on Thursday, you're going to be with the president in Philadelphia as they...

SNOW: Exactly.

CAVUTO: ... run off the press the first of them, right?

SNOW: Exactly. The president and I will be together in Philadelphia, and...

CAVUTO: Do you think people will spend those checks instantly, going to spend them, go out to a Wal-Mart or a Home Depot?

SNOW: Sure. Yes. In fact, we've talked to a number of retailers, and they've tried to set up a set of effective relationships with the retailers of America where those checks can be turned immediately into sales of retail goods. I think it's going to have a real effect, yes, in helping the retail sector.

CAVUTO: Given the fact now that we're looking at deficits that are much higher than earlier thought, close to $500 billion, in the next couple of years, do you think that that has lessened the likelihood of more tax cuts?

SNOW: No, I don't think so. I don't see a close connection there. These new deficit numbers certainly aren't welcome, but they're understandable given the circumstances we're in.

CAVUTO: Would you welcome more tax cuts?

SNOW: The priority there is to make the tax reductions, which would otherwise be sunset, permanent. That's important.

CAVUTO: So you'll still push for that?

SNOW: Oh, sure. The president has said he wants to make those tax reductions permanent.

CAVUTO: But beyond anything in the next 60-day push that the president's going to be having with you and other key members of the administration, there's nothing new coming out?

SNOW: Well, we're not proposing anything new at this time, but we're going to watch the economy and see what it takes. But I'm confident this economy is now getting on the right course.

CAVUTO: And you think that these tax cuts will add to GDP in the future quarters?

SNOW: Oh, without any doubt. Without any doubt.


CAVUTO: What do you think?

SNOW: Without any doubt.

We're looking at a pickup this year of well over half a point of GDP and another point-plus next year, maybe as much as two points, over the course of the next year-and-a-half, two years, so very, very positive, with well over a million new jobs created, and growth rates in the second half of 3.5 percent or so, next year fourt percent, big, big jump from where we are today.

CAVUTO: Mr. Secretary, always a pleasure.

SNOW: Thanks.

CAVUTO: Thanks for stopping by. We appreciate it.

The Treasury secretary of the United States, John Snow.

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