WHY IS THE FEDERAL BUDGET BALANCED?
Fiscal Year 1998 will mark the first balanced budget in 29 years. On July 15, 1998 the Congressional Budget Office revised its surplus estimate once again predicting that the 1998 surplus will be $63 billion, and if the current policies remain unchanged, the surplus is expected to rise to $80 billion in 1999. The OMB’s Mid-Session Review issued on May 26, 1998 predicts a 1998 surplus of $39 billion. This is a remarkable turnabout given that as recently as FY 1992, the federal deficit was $290 billion. This surplus is the culmination of six years in a row of successively improved fiscal balances, the longest such period of improvement in history; will cause the debt burden to shrink for the fourth year in a row (i.e., debt held by the public as a share of GDP; and will cause mandatory net interest payments to start shrinking as a share of the budget and as a share of the economy–leaving more room in the budget for productive activities. Soon after May surplus projections were released,
