There is widespread fear that Foreign Direct Investment may take a downward trend following the fears of US openness to foreign capital. The concern was raised in an economic report of the president to Congress. The report was presented in a time when the House of representative preparing to debate a proposal to transform the way US scrutinizes foreign deals on national security grounds. The report was prepared by the president’s council of economic advisers that has referred the FDI issue as, ‘may be cause of concern’. The report has outlined that the share of US output produced by foreign firms operating in America has ‘stagnated and even declined in recent years’ whereas their share of employment declined from 5.1 per cent in 2000 to 4.7 per cent in 2004. On the other hand, direct investment relative to all assets possessed by foreigners in America has declined considerably. Deputy Treasury secretary, Bob Kimmitt, has recently contended that the US has not lost its appetite for inward investment. Further he had insisted that the US is open to investment from foreign lands, and particularly from countries such as Germany, which is equally open to investment from the US. Interestingly, the report has strongly shielded the vitality of openness to trade and the benefits of appropriately managed immigration. The report also defended Bush’s much criticized policies of capital gains and dividend tax cut on the ground that the lower taxation of capital triggered investment and consequently achieving higher productivity. Following are the few highlights from the report: 1. The goal of pro-growth tax policy is to reduce tax distortions that hamper economic growth. Most economists agree that lower taxes on capital income stimulate greater investment, resulting in greater economic growth, greater international competitiveness, and higher standards of living. 2. Since 2001, temporary changes in the tax code have reduced the tax on investment. These pro-growth policies have stimulated short-run investment and economic growth. However, the temporary nature of the provisions eliminates desirable long-run economic stimulus. 3. U.S. direct investment abroad is an important channel of global market access for U.S. firms. U.S. multinational companies have contributed to productivity growth, job creation, and rising average living standards in the United States.