Budget Deficit Drops $296B Under Estimate

Budget Deficit Drops $296B Under Estimate
Budget Deficit Drops to $296 Billion Under New White House Estimates

WASHINGTON - The White House Tuesday touted new deficit figures showing considerable improvement upon earlier administration predictions, trumpeting the news as a validation of President Bush's pro-growth tax cuts.

The deficit will for budget year ending Sept. 30 will register $296 billion under a new White House estimate released Tuesday. That's much better than the $423 billion that Bush predicted in February and a slight improvement over 2005.

A surge in taxes paid by corporations and the wealthy is largely responsible for the deficit drop.

Bush himself was to trumpet the good news, attributing the improvement to tax cuts he pushed in 2001 and 2003 and his clampdown on domestic agencies funded by Congress.

However, the results are less impressive when compared to the $318 billion deficit posted last fall for fiscal 2005. Despite strong revenues, the high costs of the Iraq war and Gulf Coast hurricane relief have weighed on the deficit as have higher interest payments paid on the national debt.