The Activity financial state proceeding according to a specific program specifically includes all state expenses and their revenues approved by the for the year to come on the whole and customized in a statement accompanied by Balsafh compulsory by the legislative branch more often than not called this program the general budget, which have come to represent reflective Alemraep for state intervention in the activity economic, as the activation of fiscal policy is influenced by the situation which is the public budget, whether surplus or deficit suffer from certain. Economic variables are related to relations may be of a single-effect has influence extends with each other to be reciprocal influence, from here, this search will be dedicated to the study of the relationship between two of the most important economic variables which are of great importance, namely (cash reserve and budget deficit) in Iraq theoretical and practical study of mutual effects between them, and on this basis has been the division of research into two, taking the first of which the theoretical side of the search having to offer to the phenomenon of the budget deficit in terms of the concept and the types and sources of funding and an explanation of the nature of foreign exchange reserves in Iraq and then stand on the relationship between these two variables, as devoted the second axis of the search side application, which included an explanation of the Achtbrat used in the search in addition to measuring the stability of time-series variables Find and then focus on the equilibrium relationship between the cash reserve and budget deficit in Iraq, using a form Johansen co-integration, and as having reached search a set of conclusions of the most important that the budget is one of the most important economic indicators that show the country's economic center is the inability of the document showing the amount of the increase in public expenditure in excess of the general revenue during the period of time usually Snh.okzlk, the highest percentage reached a deficit of the public budget for GDP in Iraq during the period studied was in 2005, amounting to (19.21%), and the lowest rate was in 2010, amounting to (0.03%).