Deficit Estimate Drops 16%, Revenues Up
Wisconsin's First District Congressman Paul Ryan, who serves as Ranking Member of the House Budget Committee, today made the following statement after the Administration's Office of Management and Budget (OMB) released its annual mid-year budget update, which shows that its deficit forecast for this year has declined to $205 billion - a reduction of $39 billion from the OMB's February estimates. According to the OMB, the deficit is down primarily due to the significant increases in tax receipts generated by the growing economy.
"The fact that the deficit continues to shrink for the third year in a row reflects solid and ongoing economic growth since Congress lowered taxes in 2003. While this is a welcome sign, I worry that this progress will stall or reverse as congressional Democratic leaders keep pushing for higher spending and higher taxes. We need to rein in Washington's spending habit, while keeping taxes low, if we're going to eliminate the deficit once and for all," Ryan said.
The information released by the OMB today shows that tax revenue flowing into the Treasury is $34 billion higher than OMB estimated in February. Revenues grew by 11.8 percent in 2006, and they are expected to increase by 6.9 percent - or $167 billion - this year.
The OMB's budget update indicates that the federal government is on track to reach a balanced budget - and even register a surplus - in 2012. These estimates assume the government will adhere to the spending levels the President has proposed; however, the Democrats' budget calls for adding $21 billion to the President's spending levels and promises another $190 billion in new entitlement spending - without identifying how to pay for this entitlement spending. This is on top of spending hikes that have already taken place this year, namely $6 billion added to the 2007 omnibus and $17 billion added to the Iraq supplemental.