Summary

The unified budget deficit--sometimes called the "cash deficit"--and the net operating cost-- sometimes called the "accrual deficit"--are two key measures of the government's annual fiscal position. The cash deficit provides information on the government's current cash flow and borrowing needs. The accrual deficit provides information on the current cost of government-- the amount of resources used to produce goods or deliver services during the fiscal year-- regardless of when cash is used.

Both deficit measures improved in 2007, but the accrual deficit improved more than the cash deficit. The cash deficit decreased by about $85 billion or 34.3 percent while the accrual deficit decreased by $174 billion or 38.7 percent.