Smaller Deficit Estimate No Surprise: New OMB Estimates Do Not Support Claims About Tax Cuts

Publication Date: July 2007

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): James Horney

Research Area: Banking and finance

Keywords: Economic projections; Fiscal future; Federal budget

Type: Report

Abstract:

The Office of Management and Budget today released a report estimating that revenues for the current fiscal year will be higher, and the deficit lower, than the administration and the Congressional Budget Office projected five months ago. OMB now estimates that the deficit for fiscal year 2007 will be $205 billion, down from the $244 billion estimate in the President’s budget in February. The administration and its supporters are portraying the new estimates as important evidence the President’s tax and budget policies are “working” by boosting the economy, generating more revenue, and improving the budget outlook. Unfortunately, the reality is different.