What is a budget surplus?

A budget surplus is when income exceeds expenditures. This is when a government entity earns more than they are spending, so they have leftover money once all its bills are paid. This term often refers to a government's financial state, as individuals have "savings," and that is where the money would go.

A surplus indicates that a government is doing well in managing its finances. A deficit is the opposite of a surplus, which is when expenditures exceed income. The last time the US had a surplus was in 2001.