Bloomberg View: The Obama and Ryan Budgets Have a Lot in Common

Here’s a surprise: The budget proposed by President Barack Obama and the one by House Budget Committee Chairman Paul Ryan aren’t as far apart as you might think. Clear away the obvious—Ryan’s budget includes more deficit reduction, larger tax cuts, and higher defense spending; Obama offers somewhat less deficit reduction, less defense spending, higher taxes on the rich—and the 10-year numbers tell an interesting story. According to the Congressional Budget Office, the 2022 deficit under Obama’s plan would be about 3 percent of gross domestic product, down from about 8.1 percent this year. Ryan would bring the deficit to 1.25 percent of GDP by 2023.

Obama would bump tax revenue to 19.8 percent of GDP, up from 15.5 percent now, mostly by letting the Bush tax cuts expire on upper-income households. Ryan would extend all the Bush tax cuts and reduce the number of tax brackets from six to two—25 percent and 10 percent. Still, revenue under his plan would rise to 18.75 percent of the economy, more than the historical average of 18 percent.