July 11, 2006
HP-06

Under Secretary Randal K. Quarles
Statement On Mid-Session Budget Review

Treasury Under Secretary for Domestic Finance Randal K. Quarles issued the following statement today regarding the Office of Management and Budget's mid-year review of the FY06 budget projections:

"The results of the mid-session review of the federal budget released this morning, which show a dramatic reduction in the deficit forecast, demonstrate the strength of the U.S. economy and the benefits of the Administration's economic and tax policies.  Those policies have promoted strong U.S. growth, and as the economy grew, so did our tax revenues. 

"Every month this fiscal year, Treasury has seen some of the highest levels of tax revenue in history, with year-to-date receipts now running 13 percent higher than last year's.  This is particularly notable given that last year's receipts were themselves 14.6 percent higher than the year before.   This revenue growth has accounted for 90 percent of the improvement in the deficit forecast, and with this improvement it is clear we are on a path to meet the President's deficit reduction goal early.

"While our strong revenue growth is encouraging, it is also important to emphasize that spending restraint makes a difference, as lower than expected outlays have also contributed to the reduction in the budget deficit.  There is no doubt that a line item veto for the President can help further restrain spending, and exercising fiscal responsibility is essential if we are to maintain the encouraging trend demonstrated today."