July 11, 2007
HP-488

��Statement by Treasury Assistant Secretary for
Economic Policy Phillip Swagel on the
Mid-Session Budget Review

"We have made considerable progress in reducing the federal budget deficit over the past several years.  Today's Mid-Session Review of the Federal Budget shows that the deficit this year will be down to 1.5% of GDP. Much of this improvement reflects strong revenue growth--as a share of GDP, revenue in 2007 is projected to be above its historic average--which in turn reflects the continued strength of the U.S. economy.

"Tax relief has played an important role in fostering the economy's strength over the past few years.  To continue making progress on the deficit and achieve a balanced budget by 2012, we must keep the economy healthy in order to sustain revenue growth, and we must maintain discipline on spending. 

"Looking ahead, higher spending on entitlement programs dominates the future fiscal situation.  We must squarely face up to the challenge of reforming these programs."