Budget 2007 policies promote a strong U.S. economy and support important domestic initiatives it also helps in improving schools and reduces the health care cost. In different policies of 2007 budget helped in fuel economic growth.
Our economy is strong because President signed major tax relief benefiting workers, families, and businesses in 2001 and 2003, so we should say thanks to tax relief, and the hard work of America's entrepreneurs and workers.
The economy behaved positively on a stronger note, which led to a rebound in the tax revenues with the President's tax relief that was fully implemented in 2003. In 2004 and 2005, Receipts grew by 5.5 and 14.5 percent. This increment played a significant role in bringing out the size of the shortfalls.
Unplanned spending in the year 2006 towards recover and relief efforts, mainly in response to hurricanes Katrina and Rita, may lead to a further dip in the deficit, below than the previously forecasted deficit. The shortfall come $423 billion or 3.2 percent of GDP.
In 2007, Budget again proposes a cut in non-security discretionary spending and also holds overall discretionary spending growth below the rate of inflation. Elimination of 141 Federal programs or major savings of nearly $15 billion is also proposed in the national budget.
The greatest threat to our fiscal comes such as Social Security and Medicare was due to the unsustainable growth in entitlement programs.
In mandatory savings over five years, the congress will achieve $ 40 billion on adopting the spending reduction bill. As a measure of planning over the next five years, the national budget of 2007 suggests some reforms that are supposed to accumulates an additional $65 billion in net mandatory savings. These savings also include reforms in Medicare field, which, is expected to promote competition and the delivery of efficient and high-quality medical care to the beneficiaries.
The 2007 Budget also provides different means for additional long-term reforms, in order to accommodate the finances of Medicare, at par with the available resources. The promotion of cause of Social Security's comprehensive reform has also find a place in the President' list so that the Medicare program's finances can be placed on a sustainable footing for future generations. At the same time, the benefits for those already at or near retirement will also be preserved.
The President has addressed the National fiscal challenges, which promote economic growth and restrain spending, by providing both, the near-term as well as the long-term policies. In 2006 from its 2005 level, the deficit is projected to rise and the policies in this Budget are projected to its downward trajectory after 2006 to return the deficit as well as trying to meet the President's goal of cutting the deficit in half by 2009.
The Gross Domestic Product (GDP) measured the size of the deficit, which is best assessed in relation to the economy as a whole. The deficit decreases up to 2.6 percent of GDP, or $318 billion, sharply below initial estimates in 2005. As a result of the economic expansion, the strength of tax receipts, which grew 14.5 percent or $274 billion, mainly contributed to the reduction.
Due in significant part to the cost of the Federal response to Hurricanes Katrina and Rita, the deficit for 2006, which came after the Mid-session Review, is projected to be even larger than that prior estimate.
The level of tax receipt drives the strength of tax economy. Budget projects decline in the deficit to 2.6 percent of GDP, or $354 billion in 2007 and it assumes enactment of $50 billion in emergency for operations. Depending on the ground conditions, the amounts are uncertain at this time, in spite of the fact that additional funding beyond this level may be required before the end of 2007.