This year alone the federal deficit is close to $1.5 trillion. Years of out-of-control spending have caused the national debt to soar. It now approaches $14 trillion. That works out to about $45,000 per person.
CBS News Congressional correspondent Nancy Cordes spoke with the commission chairmen who have a frank warning for Congress and for all of us.
"This baby is lying there like a big stink bomb," said co-chair Alan Simpson, a former Whip for Senate Republicans.
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After 10 months of searching for ways to eradicate the debt, Simpson and Democrat Erskine Bowles are convinced the nation is approaching a crisis point.
"We can't grow our way out of this problem," said Bowles, a former White House Chief of Staff. "We can't tax our way out of this problem. We can't even just cut our way out of this problem."
Bowles was President Clinton's chief of staff. Simpson served in the Senate for 18 years.
In February, President Obama appointed them co-chairs of a new fiscal commission made up mostly of current members of Congress to propose the painful solutions Congress has avoided for decades.
"The commission they'll lead was structured in such a way as to rise above partisanship," said Mr. Obama.
Last week Simpson and Bowles released their first draft filled with hundreds of unpopular cuts. It was an instant lightning rod.
"This is not at all something I can live with," said Rep. Jan Schakowsky on Nov. 11.
Defense secretary Robert Gates called their proposed $100 billion in cuts to the military "catastrophic."
Alan Simpson: "Everybody in Washington says what they have to say."
Nancy Cordes: "Nancy Pelosi called the proposal 'simply unacceptable.'"
Simpson: "It broke my heart. She never wanted anything to do with this. Let's get real here."
Erskine Bowles: "We're not going to get the support of the hard left or the hard right. It's just not going to happen."
That's because the plan takes dead aim at sacred cows like Social Security, reducing benefits for all but the lowest income Americans, trimming the annual cost of living increase, and slowly raising the retirement age from 67 to 69.
"The next time you hear some jerk get up and say, 'All we have to do here is get rid of waste, fraud and abuse and foreign aid and earmarks,' just laugh because that's five percent of the hole we're in," said Simpson. "If you can't get into the entitlements programs, this is a laugher. That means health care, that means Medicare, Medicaid, Social Security."
The two men also propose freezing federal pay for three years, cutting the federal workforce by 10 percent and raising an extra $960 billion dollars in taxes over 10 years by doing away with a raft of popular deductions.
Cordes: "End the mortgage deduction. You eliminate the earned income tax credit. You eliminate the child tax credit."
Simpson: "Yeah. And use the money to reduce the tax rates which everybody's been whining about for years."
It's a stunning reduction with just three tax brackets. Depending on their income, Americans would pay either eight, 14 or 23 percent.
Cordes: "Certainly it would make doing your taxes a lot easier."
Bowles: "Sure would. It would take about two minutes. Save you some money, too," said Bowles.
With a deadline of Dec. 1, 2010, Bowles and Simpson have just two weeks to finalize their plan and convince skeptical fellow commissioners to vote for it. They need 14 of the 18 members to sign on in order to send the package to Congress for an up or down vote.
"We're going to have to make very painful cuts and if we don't you know we're really going to be a second-rate power before you know it," said Bowles.
Cordes: "But is there a difference between what's right and what you can actually get done in Congress?"
Bowles: "There may be. But Alan and I have decided that we're going to tell the truth. We're going to put a proposal out there and if it gets two votes, OK. If it gets 14 votes that's great. But that's better than a whitewash."
Cordes: "But if it gets two votes aren't we back in the same boat we were before?"
Bowles: No. Because you're talking about it. Everyone is talking about it. The people are talking about it. Honest to goodness, I think elected officials will be punished for taking a walk. I think they'll be punished for not making the tough choices."
Their goal is to wipe nearly $4 trillion off the books over the next 10 years. No one opposes that goal. The problem is Democrats aren't for spending cuts and Republicans aren't for tax increases.
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