United States Federal Budget Balance

US Federal Budget Balance reflects the financial activity of the federal government during the given month. It displays a balance between all the incomes and expenditures of the state budget. The report is based on the data obtained from government agencies and Federal Reserve banks.

Detailed data on the Federal Budget Balance are published monthly by the US treasury. They indicate changes in budget spending trends and the direction of fiscal policy.

Positive federal budget balance is characterized as a budget surplus. The surplus is formed when tax revenues exceed government spending. The budget was in surplus only four times since 1970.

The situation when the government spends more than it receives is characterized as a budget deficit. The budget deficit leads to an increase in US public debt or to its restructuring. As a measure to reduce the budget deficit, the government may propose changes to the tax code (such as avoiding loopholes, reducing benefits and tax deductions) or a direct tax increase for certain groups. Another way to reduce the budget deficit is to cut budget spendings.

When the deficit grows, the Treasury sells more bonds to be able to finance government operations. So, federal budget data has a greater impact on US Treasury bonds than on the US dollar.