April 10, 2013

THOUGH FAR from perfect, the budget President Obama released Wednesday represents the best hope for replacing sequestration with a bipartisan deficit-reduction deal before the federal government hits its statutory borrowing limit in late summer — and before Congress gets paralyzed by the politics of the 2014 elections.

Unlike the plan approved by the Republican majority in the House, Mr. Obama’s offering does not purport to balance the budget within 10 years without new tax increases. This is good, since the GOP plan would accomplish that feat through excessive domestic-spending cuts falling most heavily on those Americans least able to afford them. Unlike the Senate Democrats’ budget, Mr. Obama’s does not pretend that deficits can be meaningfully reduced by soaking the rich while largely avoiding entitlements.

Most important, the president committed himself in writing to more than $100 billion in Social Security spending restraint over the next decade, along with $400 billion in health program reductions. Mr. Obama too often casts entitlement reform as a concession to extract Republican assent to higher taxes, rather than a worthy end in itself. This is especially odd regarding his proposed new cost-of-living measurement for Social Security: Mr. Obama’s own budget documents say that it’s “more accurate” than the measurement now in use. Isn’t “more accurate” better?

But under the circumstances — which include both a predictable uproar on the Democratic left and the high risk that Republicans will refuse to deal with him — Mr. Obama’s position on Social Security amounts to an offer to negotiate, and a politically courageous one at that. He’s taking risks not only on Social Security but also with tax policy. Republicans recoiled at his call for higher taxes on upper-income Americans, which accounts for $580 billion of his plan’s $1.8 trillion in 10-year savings. But the tax plan is not necessarily pleasing to Democrats. Capping the value of itemized deductions, as Mr. Obama suggests, would curb a break for state and local taxes that disproportionately benefits Blue America.

We’re not suggesting that Mr. Obama’s plan adequately addresses the country’s long-term fiscal predicament any more than the House or Senate budgets did. Together with already-enacted tax and spending measures, and interest savings, Mr. Obama’s budget would bring total deficit reduction to $4.3 trillion on his watch. But by 2023, national debt would still be 73 percent of economic output — a very high figure by historical standards. U.S. finances would remain unduly vulnerable to the vicissitudes of global economics. And after 2023, the debt ratio probably would resume growing.

More worrying, the president’s plan confirms the federal government’s relative retreat from non-entitlement functions such as defense, health and safety regulation and law enforcement. These “discretionary” budget items would account for 4.9 percent of gross domestic product by 2023, down from 8.3 percent in 2012. Of that, national defense would represent a mere 2.4 percent of GDP, a level not seen since before World War II — in other words, a commitment of resources that no administration has previously thought consistent with the global security responsibilities the United States took on after 1945.

In short, neither Mr. Obama’s plan nor the GOP’s fully comes to grips with the hard choices facing the country. That task may have to await new leaders.

In the here and now, however, the question is how to get the most debt reduction possible, in the most constructive way, within existing political realities. In that framework, Mr. Obama has offered a plausible, responsible road map. Now the Republicans face a choice: Declare the president’s budget dead on arrival, as their partisan interest might suggest, or consider it an invitation to bargain and to govern, as the national interest requires.