While such projections are subject to considerable uncertainty, the CBO's assumptions provide a sensible and useful starting point for assessing the budget situation over the longer run. Before discussing that longer-run outlook, I will comment on recent budget developments.
As you know, the deficit in the unified federal budget declined for a second year in fiscal year 2006, falling to $ billion from $ billion in fiscal 2005. So far in fiscal 2007, solid growth in receipts, especially in collections of personal and corporate income taxes, has held the deficit somewhat below year-earlier levels.