A balanced-budget amendment is a constitutional rule requiring that the state cannot spend more than its income. It requires a balance between the projected receipts and expenditures of the government.

Balanced-budget provisions have been added to the constitutions of most U.S. states, the Basic Law of Germany, Spain, Italy and the Swiss Constitution. It is often proposed that a balanced-budget rule be added to the national United States Constitution. Most balanced-budget provisions make an exception for times of war, national emergency, or recession, or allow the legislature to suspend the rule by a supermajority vote.

In November 2011 the Austrian coalition government agreed to amend its constitution and introduce a German style Schuldenbremse ("debt brake"). This will force the government to reduce its debt level to 60% of gross domestic product (GDP) by 2020.

In 2009 Germany's constitution was amended to introduce the Schuldenbremse ("debt brake"), a balanced budget provision. This will apply to both the federal government and the Länder (states). From 2016 onwards the federal government will be forbidden to run a structural deficit of more than 0.35% of GDP. From 2020, the states will not be permitted to run any structural deficit at all. The Basic Law permits an exception to be made for emergencies such as a natural disaster or severe economic crisis.

A balanced budget is when there is neither a budget deficit or a budget surplus – when revenues equal expenditure ("the accounts balance") – particularly by a government. More generally, it refers to when there is no deficit, but possibly a surplus. A cyclically balanced budget is a budget that is not necessarily balanced year-to-year, but is balanced over the economic cycle, running a surplus in boom years and running a deficit in lean years, with these offsetting over time.

Balanced budgets, and the associated topic of budget deficits, are a contentious point within academic economics and within politics, notably American politics. The mainstream economic view is that having a balanced budget in every year is not desirable, with budget deficits in lean times being desirable. Most economists have also agreed that a balanced budget would decrease interest rates, increase savings and investment, shrink trade deficits and help the economy grow faster over a longer period of time.

Mainstream economics mainly advocates a cyclically balanced budget, arguing from the perspective Keynesian economics that budget deficits provide fiscal stimulus in lean times, while budget surpluses provide restraint in boom times.

Randal Howard "Rand" Paul (born January 7, 1963) is the junior United States Senator for Kentucky. He is a member of the Republican Party. A member of the Tea Party movement, he describes himself as a "constitutional conservative" and a libertarian. He is the son of Republican Congressman and 2012 Republican presidential candidate Ron Paul of Texas and had never previously held political office. Paul first received national attention in 2008 when making political speeches on behalf of his father. Rand Paul is the first United States Senator in history to serve alongside a parent in the United States House of Representatives.

A graduate of the Duke University School of Medicine, Paul has been a practicing ophthalmologist in Bowling Green, Kentucky, since 1993, and established his own clinic in December 2007. In 1994, he founded Kentucky Taxpayers United, of which he is still the chairman.

In 2010, Paul ran as the Republican candidate for the United States Senate seat being vacated by retiring Senator Jim Bunning of Kentucky and defeated Kentucky Attorney General Jack Conway. As a supporter of the Tea Party movement, Paul has been vocal in advocating for term limits, a balanced budget amendment, and the Read the Bills Act, in addition to the widespread reduction of federal spending and taxation. He has gained prominence for his independent positions on many political issues, often clashing with both Republicans and Democrats.