We balanced the budget and paid off $450 billion in publicly held debt in 1998, 1999, 2000, and 2001. Those were the first balanced budgets since 1969. It's hard to remember now, but, the week before 9/11 the Congress was debating what to do with a budget surplus. Then the world changed. We were recovering from a national emergency, fighting a war and in an economic slowdown all at once.
Our priorities changed. But the way back to balanced budgets is to control the growth of government spending and economic policies that encourage strong economic growth. That means low taxes and fair regulations. When we passed more tax relief in 2003, the tax and spend crowd was enraged. But that tax relief was just the right thing to do. And now, the data is in to show it's working.
On Thursday, the final budget data came in for the year that ended September 30. The budget deficit is collapsing faster than anyone projected. It is now only $163 billion. I know. "Only" in front of any number in the billions is hard to swallow. But keep in mind that only 24 months ago the deficit for this year was expected to be twice as large and this deficit is 1.2 percent of GDP -- quite low by historical standards.
As a percentage of the economy, the deficit is now lower than the average of the last forty years. Why? Because tax revenues grew by $161 billion this year -- the highest level of Federal revenues ever recorded. And it builds on the 14.5 percent and 11.8 percent increase in revenues during the last two years.
Tax relief combined with spending restraint promotes economic growth. The economy is in its sixth straight year of sustained economic growth. Since August 2003, our economy has added more than 8 million new jobs and the national unemployment rate is at 4.7 percent.
This progress back toward balanced budgets and strong economic growth is threatened by the budget resolution passed this year by the new Democratic Congress. The budget is a blueprint that looks out five years. It is not signed by the President and I opposed it. Included in their assumptions is the second largest tax increase in American history. They are planning for all of the tax relief passed in 2001 and 2003 to expire. Income taxes would go back up. The marriage penalty would come back. The child tax credit would be cut in half and capital gains and dividends would be taxed at higher rates again. The death tax would come back to life.
None of this would be good for our economy and job creation or for balancing the budget. The way to balance the budget is through policies that encourage economic growth and controlling the growth of government. Raising taxes is the wrong way to go.