Recent policies enacted by the Congress and the President have sought to balance the budget, prevent Social Security from financing other government programs, and pay down Federal debt. With the increasing application of information technologies in the U.S. economy, economic productivity has also steadily increased. These factors have contributed positively to the record economic expansion now occurring in the U.S. economy. The economy experienced strong GDP growth of 5.4 percent in 1999, capping an eight-year period of expansion. Inflation over the past year remained low at 2.2 percent, but is projected to increase slightly next year and beyond.
Interest rates are low but projected to rise slightly.
The strong economic expansion has brought unemployment to the lowest level recorded in the post-war period. Similarly, enactment of major welfare reform legislation has successfully returned people to work and contributed to declines in the welfare rolls to the lowest levels in 30 years. Last year's enactment of major bipartisan work incentive legislation will provide real opportunities for the disabled to return to productive work and lead self-sufficient lives. According to CBO, individual income tax receipts fueled the rapid rise in Federal revenues over the past few years. A key challenge ahead is to sustain and extend the current economic expansion.