Paul Ryan wants more revenue

March 12, 2013

Buried in Rep. Paul Ryan's new budget is one surprising detail: He wants to raise more revenue for the government than he did before.

Ryan's budget sets a revenue to GDP target of 19.1 percent by 2023. That's higher than his target last year (18.7 percent after a decade) and his target two years ago (18.3 percent), as the Urban Institute's Howard Gleckman points out. It's a notable shift as many Republicans have used an 18 percent revenue to GDP ratio as a benchmark to justify or oppose changes to the tax code—including Ryan (R-Wis.) himself.

In September 2010, Ryan's House Budget Committee repeatedly used the 18 percent benchmark—the historical average for revenue to GDP—to explain why the Bush tax cuts did not cause our current deficits. "With full tax relief implemented, revenue rose to 18.5 percent of GDP in fiscal year 2007, well above the 50-year historical average of 18 percent," the committee concluded. (Not everyone thinks this is a useful benchmark, as Ezra has explained previously.)

Why, then, has Ryan's ideal revenue-to-GDP ratio been creeping upward? Gleckman explains that the difference between last year and this year's targets is equivalent to revenue raised by the tax increases from the fiscal cliff deal and Obamacare. While Ryan's 2014 budget assumes that Obamacare will be repealed and taxes will be lowered significantly below current levels, it also seems to assume that they will be replaced by something that raises the equivalent amount of revenue—about $3.5 billion over 10 years.

On "Fox News Sunday," Ryan acknowledged as much—at least when it comes to the fiscal cliff. "We don't want to refight the fiscal cliff. That's current law. That's not going to change," he said.

Ryan doesn't apply the same logic to Obamacare, despite the fact that it was passed nearly two years earlier and that his new budget assumes some of the revenue raised by the president's health reform law. "We say we get rid of Obamacare," he said in the Fox interview.

All this said, Democrats and Republicans will still have a huge gap to bridge on the revenue side. Senate Budget Chair Patty Murray (D-Wash.), for one, wants $1 trillion in new revenue. And Ryan is even more vague as to how he'd raise any new revenue.

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Brad Plumer · March 12, 2013