Bush pares deficit forecasts for fiscal 2006

In its legally mandated “Midsession Review,” the White House Tuesday slashed its forecast for the fiscal 2006 budget deficit by $127 billion. Mr. Bush said the tax cuts he promoted had given the economy a boost. Democrats noted the deficit still is expected to be nearly $300 billion.
“As you know, every year my administration produces a budget that lays out our priorities and our goals,” President Bush said. “And every summer the Office of Management and Budget releases a report called the Mid-Session Review that tells the American people how much progress we’re making towards meeting our fiscal goals.
“Today,” he said, “OMB Director Rob Portman released the latest review. I’m pleased to report that it’s got some good news for the American taxpayer. This economy is growing, federal taxes are rising [sic], and we’re cutting the federal deficit faster than we expected.”
The administration’s projection for the fiscal year that ends in September is now $296 billion, officials said, well below the $423 billion projected in February, in Mr. Bush’s annual budget. The non-partisan Congressional Budget Office also is forecasting a deficit of around $300 billion for the 2006 fiscal year.
The White House said higher than expected taxes from businesses and the rich helped counter increases in spending for the war in Iraq and the rebuilding of areas affected by Hurricanes Katrina and Rita. “What’s happened is the tax cuts are succeeding,” White House spokesman Tony Snow told reporters.
“During last three years of the Clinton administration, we didn’t have a $300 billion deficit that people are bragging about here today on the Senate floor,” noted a leading Democrat, Sen. Harry Reid of Nevada.
The 2005 deficit was $318 billion down from 2004’s record shortfall of $413 billion.