How is a budget surplus different from a budget deficit? A budget surplus occurs when revenues are greater than expenditures; a budget deficit occurs when expenditures are greater than revenues.

A budget surplus leads to an increase in the national debt; a budget deficit leads to a decrease in the national debt.

A budget surplus happens when interest rates rise; a budget deficit happens when interest rates fall.

A budget surplus is caused by an increase in mandatory spending at the federal level; a budget deficit is caused by an increase in discretionary spending at the federal level.