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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

There are new figures from the Congressional Budget Office today and they contain some good news for President Bush. The CBO, which crunches the numbers for lawmakers, said the federal deficit will be smaller this year by $80 billion. Republicans welcomed that news, saying it backs up their position that tax cuts were the right remedy when the economy was struggling; the message from Democrats was, `Not so fast.' NPR's David Greene reports.

DAVID GREENE reporting:

Douglas Holtz-Eakin is director of the Congressional Budget Office. And before taking questions on his agency's newest numbers, he offered this important warning.

Mr. DOUGLAS HOLTZ-EAKIN (Director, Congressional Budget Office): Let me just say that everything that we've presented today is going to be wrong. It's the nature of the business. We're always trying to project the future and can't do so perfectly.

GREENE: But Holtz-Eakin did his best. He said the federal deficit for 2005 will be $331 billion, down from 412 billion last year. He said that was good economic news, at least for now. A big reason the deficit seems to be shrinking, he said, is that corporations have been taking in bigger and bigger revenues. He said he's not sure how long that will last.

Mr. HOLTZ-EAKIN: This is the second year in a row that corporation receipts have risen at above-40-percent rates. That raises the very difficult question of just how much of that surge in revenues one should perceive to be permanent.

GREENE: In Washington, of course, raising questions leaves room for politicians to offer answers. Republicans said the tax cuts of 2001 and 2003 have given families and businesses more money to spend, spurring economic grown and pushing down the deficit. House Majority Leader Tom DeLay said in a statement that the CBO numbers show Americans are `reaping the benefits of conservative economic stewardship.' That echoed President Bush last week.

President GEORGE W. BUSH: It makes sense to trust people with their own money. I'm pleased to report that the strategy is working.

GREENE: `Not so,' said Democrats and their allies. They pointed to the CBO's future projections, which were that if Mr. Bush and Republicans fulfill their vows to make tax cuts permanent, the cumulative deficit in the next 10 years would jump from $2.1 trillion to 3.4 trillion. And besides, said Kent Conrad of North Dakota, the ranking Democrat on the Senate Budget Committee, Americans should be looking deeper into the CBO report and the fact that the nation's debt, the amount the nation has to borrow, is ballooning.

Senator KENT CONRAD (Democrat, North Dakota): I don't think we see an improving deficit picture except in the very short term. What the CBO is saying is over the longer term, they don't see an improving deficit picture. And again, I think, looking at the deficit, really, at this point in our fiscal affairs, really misses the point of what's happening to the debt.

GREENE: Perhaps the only economic figure both parties agree on is that gasoline prices are soaring. At the CBO, Holtz-Eakin said if they stay high, it won't change his deficit projections too much, though he made no guarantees. David Greene, NPR News, Washington.

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