For too long, budget debates in Washington have been an either-or exercise — tax increases or spending cuts. Heads I win, tails you lose.
The result? One manufactured crisis after another, each one ending in stalemate.
Remarkably, the fiscal picture has gotten brighter anyway, primarily because the economy is slowly gaining steam. The projected deficit for the current fiscal year is $845 billion, and the latest Congressional Budget Office forecast pegs the deficit at $459 billion, or a relatively low 2.4 percent of GDP, in 2015.
After that, however, the CBO warned that deficits will increase, in large measure because of costs associated with an aging population. Moreover, the national debt will remain at historic levels, reaching 77 percent of GDP in a decade and continuing to grow thereafter, also driven by entitlement spending.
As a matter of politics, those numbers mean the window of opportunity is still open for a grand bargain that benefits the U.S. economy and the government's balance sheet.
The question is whether Congress and the president are willing to make the compromises necessary to close a deal.
So far, the answer has been no. Snap reactions from the far left and the hard right to President Barack Obama's budget blueprint weren't any more promising. But his proposal, released Wednesday, deserves serious consideration from Republicans and Democrats.
Obama called for tax increases and spending cuts. He wants more spending on roads and other infrastructure needed for economic expansion, proposals consistent with the themes of his successful re-election bid.
He also addressed GOP demands to control spending. His plan includes a cost-of-living formula that would reduce future Social Security benefits and scales back automatic increases in Medicare and Medicaid.
With entitlement programs accounting for two-thirds of the budget, deficit reduction won't happen without addressing them. Under Obama's plan, the deficit would fall to 1.4 percent of GDP by the end of the decade — down from 10 percent at the height of the recession.