"...Our deficit projections show that the US is slightly ahead of the actual 1990s deficit path. In 1996 – almost six years into recovery – the deficit was still 1.4% of GDP. The first surplus arrived in 1998. We expect the deficit to be just under 1% of GDP for Fiscal 2007 (almost six years into the recovery), with surpluses arriving in 2009 or earlier.

As in the 1990s, revenue is being lifted by a productivity-driven surge in incomes, profits, and rising equity prices. As people earn higher incomes, a larger share of their income gets taxed at higher marginal rates – a tax hike without new legislation. Those who argued that the tax cuts in 2001-03 would create deficits as far as the eye could see are being proven wrong. And, unlike the 1990s, the budget will be balanced without the help of a post-Cold War "peace dividend."..."

http://www.ftportfolios.com/Common/research/economicresearch-317.pdf