Definition of Balanced Budget Amendment

What is a "balanced budget amendment"? What does the term "balanced budget amendment" mean?

A "balanced budget amendment" is a constitutional rule that is implemented by a government body (example, state or federal government) that requires that the government body not spend more than what it takes in.

A "Balanced Budget" occurs when expenditures match receipts, so a balanced budget amendment would require that a government body have its "books balanced". A "deficit" occurs when a government spends more than what they take in.

Multiple countries throughout the world have "balanced budget amendments" in their laws and constitutions. As well, balanced budget amendments are found in the constitutions of many US states.

There are some politicians (mainly from the right) who want a "balanced budget amendment" added to the US constitution. Usually talk of a "balanced budget amendment" flares up when the nation's debt ceiling is increased.

It should be noted that many balanced budget amendments allow for government bodies to incur a deficit during times of war, national emergency or recession.

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