Budget Deficit Cut Coming Soon

The Bush administration's goal of cutting the federal budget deficit in half by 2009 will be accomplished sooner, Treasury Secretary John Snow said Tuesday.

With tax revenues improving, "it's clear the deficit is getting into a better posture," Snow said during a briefing on the economy.

The Congressional Budget Office recently said the deficit this year could be as low as $300 billion, less than an earlier forecast.

The White House in February projected a deficit of $423 billion, which would mark a record in dollar terms. Many private analysts, however, expect this estimate will be lowered when the administration releases its midsession budget review this summer.

"One thing is pretty clear. With these strong revenues and the continuing attention to spending, the deficit is getting on the right path," Snow said. "The president's target of cutting the deficit in half is going to be met - is going to be exceeded - and that will be done ahead of schedule."

Snow said the goal of cutting the deficit in half could be met "several years ahead of schedule," but he refused to be more specific.

The administration has said it intends to slice the deficit in half - toward a size that is below 2 percent of total economic output as measured by gross domestic product.

A flood of income tax payments pushed up government receipts to the second-highest level in history in April. The stronger gain in government revenues is prompting many analysts to lower their estimates for the budget deficit this year.

The government recorded a $319 billion budget deficit last year, an improvement from 2004 but still the third-largest on record in terms of dollars.

Snow credited the president's tax cuts with helping to boost overall economic activity and thus tax receipts as well.
Democrats contend that the tax cuts plunged the government's balance sheets into red ink and ended four years of budget surpluses from 1998 though 2001.

The administration has blamed mostly higher spending to fight the wars in Iraq and Afghanistan and spending to combat terrorism within the United States for the budget deficits.

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