Bush: Cutting deficit ahead of goal

President Bush said Friday a lower projected budget deficit would enable the administration to reach its goal of cutting it in half a year earlier than the 2009 target.

During the 2004 presidential campaign, Bush pledged to cut the budget gap in half by 2009 and Friday he pointed to higher tax revenue and efforts to cut government spending as helping to achieve that goal early.

"We recently learned that this year's deficit is projected to be 30 percent lower than we initially thought," Bush said after huddling with his economic advisers. "And that means we're on track to cut the deficit in half by 2008, a full year ahead of the original goal."

CBO disagreement
However, the nonpartisan Congressional Budget Office Thursday forecast the government budget deficit would rise to $286 billion in fiscal 2007, up from $260 billion projected for this year.

Bush said he and his advisers discussed working with Congress on addressing the costly entitlement programs of Social Security, Medicare and Medicaid. But with a short session before the Nov. 7 congressional election, the chances of action were slim.

The economy will likely be a theme during the election, in which Democrats are vying to retake control of the House and Senate.

"The foundation of our economy is solid and is strong," Bush said. "American workers and families and small businesses are keeping more of the money they earned. And they're using that money to drive this economy of ours forward."

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Mixed picture
Yet, some indicators have shown a mixed economic picture: the gross domestic product expanding at an annual clip of 2.5 percent in the second quarter, much slower than the brisk 5.6 percent pace in the first three months of 2006.

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Plus, the Federal Reserve is closely watching for any indications of inflation taking off.

Democrats countered that mid-income Americans have suffered under Republican control of both the White House and Congress.

"The president doesn't need to meet his economic advisors in order to learn one simple truth," Senate Democratic leader Harry Reid said. "For millions of hard working middle-class families, life under Republican rule has grown less affordable and less secure.