President Bush says the U.S. economy is gaining "momentum" thanks to his tax cuts.

In his weekly Saturday radio address, Mr. Bush says his tax reductions are helping small business owners invest in new equipment and allowing parents to spend more of their money on their children. He says the tax cuts have stimulated the economy, leading to reduced Federal budget deficits.

The president's optimistic outlook comes a day after the White House reported the deficit for fiscal year 2004 would reach a record high of $445 billion. However, Mr. Bush said the figure is $100 billion less than had been predicted earlier because the economic outlook has improved.

The Commerce Department also reported Friday the U.S. economy expanded in the second quarter of 2004, but at a slower rate than expected.