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Marc Sumerlin
Deputy Assistant to the President for Economic Policy
Thursday, May 3, 2001; 1 p.m. EDT

Soon after taking office President Bush made tax cuts and the economy top priorities of his administration. How has the president dealt with economic issues in the first 100 days of his presidency? How does the White House feel their economic agenda is moving?

Marc Summerlin, Deputy Assistant to the President for Economic Policy, will be online Thursday, May 3, at 1 p.m. EDT to take your questions and comments on the new administration's handling of the economy. Previously, Summerlin served as an economic policy advisor to the Bush-Cheney presidential campaign and as a senior analyst and assistant economist to the U.S. Senate Budget Committee.

The transcript follows.

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Arlington, Va.: How do you feel about the tax cut compromise? Will the new administration push for more cuts down the road?

Marc Sumerlin: We are very please that the congress is on pace to enact the majority of the presidents tax proposal very soon. Only two years ago many congressional leaders opposed any tax cuts. Last year Democrats first supported 250 billion and then 500 billion. The compromise agreement for 1.35 trillion will provide substantial tax relief and is a result of the president's leadership on the issue.

We look forward to working with the congress to fill in the specifics and get a tax bill signed very quickly after that we will evaluate the prospects of more tax reform during the president's first term.

Somewhere, USA: What do you say to the Democratic criticism that everyone on the Social Security task force is in favor of some sort of privatization?

Marc Sumerlin: Personal retirement accounts are an important component of saving and strengthening SS. Right now younger workers receives than a 2% rate or return on their contributions. That is why most people who have looked at this issue seriously favor adding personal retirement accounts. This includes Sen. Moynihan who is one of the strongest defenders of Social Security in the program's history. The president chose a bipartisan slate of individuals who were committed to reforming the program while we have the opportunity to. These are independent creative thinkers who will thoroughly evaluate the options and work through to find what is the best solution for implementing the president's principles.

Arlington, Va.: Will the President support a raising of the Roth IRA limit?

Marc Sumerlin: Raising the Roth IRA limit is good public policy but we think it is more important to pass the components of the president's tax plan first. The president identified the worst inequities in the tax code and came up with solutions to reduce these inequities. For example right now married people often pay higher taxes after they say "I do." The president's plan will get rid of the majority of marriage penalty. Another example is that single mothers pay higher marginal tax rates than many of the wealthiest taxpayers. As a result, single parents will loose half of any raise that they receive. By doubling the child tax credit and lowering the bottom rate to 10% the president's plan will significantly reduce the marginal tax rates on single parents. His plan also addresses the death tax and the very high taxes on the most successful small businesses. We believe that his plan is fair and balanced and will help the economy in both the short run and the long run and for this reason we are focused on passing his tax plan first.

Sandy, Utah: How serious is the Social Security Commission? Will there be recommendations?

Marc Sumerlin: Reforming social security is one of the top priorities of the president and the commission is very serious. The president has asked that the commission make recommendations by this fall. Adding personal retirement accounts to Social Security would be one of the most fundamental reforms we could enact. It would transform us from a nation of paycheck collectors to a nation of owners and savers. President Bush believes that everyone should have the security that comes with owning your own assets. Right now only the top half of Americans have positive net financial wealth. Social Security reform, if done correctly, can be an important way to create wealth and independence for lower income Americans. The president demonstrated his seriousness by appointing many of the best and most credible thinkers on Social Security.

Alexandria, Va.: Isn't the tax cut only going to benefit the top 10%? What is Bush doing to help the middle class specifically?

Marc Sumerlin: No, the tax cut will benefit everyone who pays income taxes. The largest percentage reductions go to those with the lowest incomes. For example, people making between $30,000 and $40, 000 on average will see their income taxes fall by 38, people making over $200,000 will see their income taxes fall by 9% on average. As an example, a family of four making $40,000 would receive a tax cut of at least $1600. This is enough to pay for community college for a year, enough to pay the electric bill for over a year, or enough to pay the gas bill for two cars for a year.

Washington, D.C.: What Bush policies do you think will have the greatest effect on the economy and, most importantly, when will these effects be fully realized?

Marc Sumerlin: The president has proposed making his tax plan retroactive to the beginning of this year. We hope that we can provide tax relief to people starting this summer. By putting more money in the hands of consumers the tax plan will provide a short term stimulus. It also improves incentives needed for economic growth over the long term. The president also has many other proposals which will help boost long term economic growth. These include a stronger more accountable education system, a historic amount of debt reduction (the most of any nation at any time in history), a national energy policy and restoring a reasonable growth rate in government spending.

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