The President spoke about the budget yesterday when we released the Mid-Session Review, the summer update of the budget numbers.

Here’s the least you need to know:

  • This year’s deficit (for Fiscal Year 2007) is now projected to be $205 billion.
  • Good news: That’s $43 billion lower than last year’s deficit, and $39 billion lower than we projected for FY 07 in February’s budget.
  • At 1.5% of GDP, this year’s budget deficit is well below the 40-year average of 2.4% of GDP.
  • A strong economy means that federal tax receipts are up. They’re now at 18.8% of GDP, higher than their 40-year historic average.

You can find the Mid-Session Review here, and Budget Director Rob Portman’s press conference here.

Here are a couple good Presidential quotes.

The mid-session review is important. It lets the American people know how we’re doing in meeting what we call fiscal goals. And this year the message is unmistakable. America’s economy keeps growing, government revenues keep going up, the budget deficit keeps going down — and we’ve done it all without raising your taxes.

  • America’s economy is growing. Real GDP is projected to grow 2.3% this year. The U.S. economy has expanded by more than $1.9 trillion since the end of the recession in Q4 2001.
  • Government revenues keep going up. +8% for the first eight months of this year, relative to last year. We expect the full fiscal year to be 6.9% higher than last year (+$167 B).
  • The budget deficit keeps going down. Projected deficit for this year is $205 B, down from $244 B in the February budget. And that’s $43 B lower than last year’s deficit. It’s also declining as a share of the economy.
  • Without raising your taxes. The President has proposed and signed four major tax cuts. Still, economic growth has led to higher federal revenues.

More importantly, the size of the deficit is down to only 1.5 percent of America’s economy. One way to be able to measure how we’re doing with the deficit relative to other years is to measure it as a percentage of GDP. We’re estimated to be at 1.5 percent of GDP. That’s well below the average of the last 40 years. We’ve achieved all this deficit reduction without once raising the taxes on the American people.

graph - deficit bars