Budget Deficit

A budget deficit occurs when a government's spending in a given fiscal year exceeds its revenue from taxes and other sources, with the shortfall typically financed by issuing government debt, and its opposite, a budget surplus, occurs when revenue exceeds spending. In the United States the federal budget deficit is calculated and reported annually by the Congressional Budget Office and the Office of Management and Budget, most often expressed both in absolute dollar terms and as a percentage of GDP to allow comparison across time and with other countries, and the size and trajectory of the deficit is a recurring focus of fiscal policy debate and, at the extreme, a factor credit rating agencies weigh in sovereign credit assessments.