Taxes have been cut and tax revenues are up.

On Friday, the Congressional Budget Office reported that corporate tax receipts for the nine months ending in June hit $250 billion -- nearly 26 percent higher than the same time last year -- and that overall revenues were $206 billion higher than at this point in 2005.

Congressional analysts say the surprise windfall could shrink the deficit this year to $300 billion, from $318 billion in 2005 and an all-time high of $412 billion in 2004.