Sense and nonsense; Obama plan has both

President Obama's 2013 budget proposal totaling $3.8 trillion is a responsible document as far as it goes. In proposing this budget, the Obama administration recognizes that steep cuts in federal spending at this time could kill the nascent economic recovery. Unfortunately, the budget doesn't do nearly enough to encourage long-term deficit reduction.

The president knows his re-election chances are closely tied to the economy and a top priority in his budget is job creation. The president seeks $350 billion in stimulus spending to provide tax incentives that will persuade corporations to create manufacturing jobs here, not overseas; and it calls for building highways, rail lines and new schools that will produce construction jobs in the short term and improve America's economic vitality in the long term.

The budget recognizes the federal government's role in improving education, by providing new spending for teacher training and continuing the incentives of the Race to the Top program that has spurred educational reform efforts across the country. It also maintains the tuition supports for low- and moderate-income students that have been a frequent target of GOP budget-cutting proposals.

It presents Americans a clear choice on tax policy. It would raise taxes on the wealthy, including imposing a 30 percent minimum tax on those earning $1 million or more, the so-called "Buffet rule." Congressional Republicans, in contrast, continue to resist any tax increases, with some calling for more tax cuts, heedless of the reality that cutting their way out of the nation's deficit would mean destroying the social safety net on which needy Americans depend.

Yet the nation cannot ignore its growing debt, now $15.3 trillion, nearly three-quarters of GDP. Administration officials say the budget will reduce the deficit $4 trillion over the next 10 years through a mix of tax increases, caps on spending and savings in other areas, but specifics are lacking and such long-term commitments have historically proved unreliable.

There is also budget trickery in accounting for hundreds of billions of dollars in savings due to the withdrawal from Iraq and anticipated drawdown in Afghanistan. The budget directs much of this "saved" money to new programs, when in fact the nation never had the money for the Iraq campaign to begin with - it borrowed it - so there are no real savings to be redirected.

What we have repeatedly called upon the president to do is adopt as his policy the deficit-cutting recommendations of the Simpson-Bowles National Commission on Fiscal Responsibility and Reform. The commission called for eliminating $1 trillion annually in tax breaks; slowly raising the retirement age and raising payroll taxes to pay for the Social Security system; and limiting Medicare and Medicaid growth through austerity measures and more out-of-pocket contributions by beneficiaries. That is the kind of tough, but honest solution Americans will accept if it assures the nation's long-term fiscal stability.

By adopting the framework of Simpson-Bowles to reduce deficit spending long term, and pushing Congress to adopt it, the president would earn credibility for his attempts to sustain spending in the short term until the recovery takes full hold.

Alas, not in an election year; attempts to reach a grand budget compromise on the scale of Simpson-Bowles, with tax increases and entitlement cuts, failed last year when Republican House Speaker John Boehner abandoned talks with the president, unable to get fellow congressional Republicans to accept any tax increase. Trying to get it done now appears impossible.

In fact there is little chance for action on this budget at all, with neither side willing to make the compromises necessary; more evidence that the political system is broken.