Glossary term
Deficit
The amount by which federal spending exceeds federal revenue in a single year.
In a fiscal year the government takes in revenue and pays out outlays. If outlays are larger, the difference is the deficit for that year, and Treasury borrows to cover it.
The distinction from the debt is the single most common confusion in budget coverage. A falling deficit does not mean falling debt: it means the debt is growing more slowly. The debt only falls when there is a surplus.
Where you will see it
The deficit is an annual flow. The debt is the accumulated stock. Coverage frequently swaps the two.
Related terms
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