Who in the U.S. is affected by the so-called balanced budget rule? (a) A state’s operating budget typically has to be balanced. This does however not mean that states cannot go into debt, as states also have a capital budget, to which the balanced budget rule does not apply. (b) The federal government must have a balanced budget at all times. (c) After applying for Chapter 9 bankruptcy, a municipality has to have a balanced budget for 10 years, before it can start issuing tax-exempt municipal bo