The administration's budget analysts say the budget deficit will be about 30 percent lower than anticipated just six months ago.
President Bush says it is good news.
"Our original projection for this year's budget deficit was $423 billion. That was a projection. That is what we thought was going to happen. That is what we sent up to the Congress, here is what we think. Today's report from OMB tells us that this year's deficit will actually come in at about $296 billion," said Mr. Bush.
The president invited Congressional allies and other supporters to the White House for a bit of an economic pep talk. He said the deficit is down because his policy of tax cuts has stimulated economic growth.
"Our small businesses flourished, people invested, tax revenue is up, and we are way ahead of cutting the federal deficit in half by 2009. As a matter of fact, we are a year ahead," he added.
Mr. Bush went on to encourage Congress to continue the economic expansion by holding down spending in areas not related to national security. He said providing the armed services with the resources they need remains a priority.