A presidential panel charged with finding ways to pull the U.S. out of its spiraling debt is calling for sweeping changes that would impact all Americans for generations to come. The National Commission on Fiscal Responsibility and Reform recommends raising the retirement age and eliminating costly tax breaks as part of a larger plan to reduce the nation's mushrooming debt. The commission's leaders say failure to act could have grave consequences for the U.S. - but even panel's members are divided on whether the steps go too far or not far enough.
The financial turmoil happening in Europe could befall the United States if Americans don't act now. That's the warning from top leaders of a special commission charged with finding ways to rein in the nation's debt, now estimated at nearly $14 trillion.
Former Republican Senator and co-chair Alan Simpson:
"We have seen the figures, and we don't know a lot about Greece and Ireland and Spain and Portugal and Italy, but we do know something, that if you stay this way, something bad will happen," he said.
The panel's report - subtitled, The Moment of Truth - proposes cutting defense spending by $100 billion and closing one-third of U.S. military bases abroad. It would also double the federal tax on gasoline, reduce medicare payments to seniors and raise the retirement age for Social Security.
If implemented, the plan would cut the U.S. deficit by nearly $4 trillion and stabilize the debt by 2014.
But Democratic Representative Jan Schakowsky plans to vote against the recommendations. He says the austerity measures will hurt low income earners the most.
"We talk about shared sacrifice, I think these numbers indicate that sacrifice in fact has not been shared," said Schakowsky. "That some people have lost and others have significantly gained over the last several years, so we're not starting at the same point."
The plan requires the approval of at least 14 of the panel's 18 members to bring it up for a vote in Congress. But former Senator Erskine Bowles, the Democratic co-chair, has already declared victory. He says the panel has succeeded in starting an "adult conversation" on a problem that's too big to ignore.
"All we have to do is look at what's happening to the other countries," he said. "We're not unique. If we don't address this, we face the most predictable economic crisis in history. So we can either wake-up and smell the coffee or we can wait to watch it happen. And I can tell you when it happens it will be severe and it will be quick."
Failure to act could cause international investors such as China to demand higher interest payments, further compounding the debt.
The Congressional Budget Office estimates current U.S. government debt at roughly 60 percent of GDP. In comparison, Greece's debt to GDP ratio after the European bailout is forecast to reach 140 percent in 2011.