The Bush administration expects the fiscal 2006 budget deficit will shrink by about 7% to $296 billion from last year’s $318 billion deficit. But this temporary narrower gap will again expand in 2007.
While according to the estimation from White House Office of Management and Budget, Much of the projected deficit reduction stems not from reining in spending but from better-than-expected tax receipts.
Though Mr. Bush hailed the narrowing deficit as evidence that his 2001 and 2003 tax cuts are working, economic-policy experts said that while the Bush tax cuts have helped spur some economic growth, they aloneÃ‚Â aren’t going to create enough growth either to solve the nation’s long-term fiscal challenges or to erase what is still a significant budget deficit. Spending is the other half of the equation and needs to be slowed substantially.