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Obama announces deficit commission

WASHINGTON - President Barack Obama's new deficit commission might give Americans a slap in the face about the sacrifices needed to avoid bankrupting future generations - maybe working until age 70, paying higher taxes and spending more of their own money for doctors' visits and prescriptions.

Obama won't be talking about that harsh medicine, nor will the lawmakers on Capitol Hill, nor the candidates trying to replace them in November.

In a poisonous election-year atmosphere, almost no one is willing to go on the record with solutions like raising the Social Security retirement age, ordering broad-based tax increases or increasing co-pays and deductibles for Medicare - ideas far too politically explosive for one party to take on alone.

That's where Obama's National Commission on Fiscal Responsibility and Reform, announced yesterday with fanfare, comes in. With the total federal debt next year expected to exceed $14 trillion, or about $47,000 for every U.S. resident, the 18-member commission is charged with coming up with a plan by Dec. 1 to reduce the government's annual deficits to 3 percent of the economy by 2015.

Obama announced the panel only after the Senate on Jan. 26 rejected a call by Sens. Kent Conrad (D-N.D.) and Judd Gregg (R-N.H.) to create by law a group that would have been similar but whose recommendations would have had considerably more weight - requiring Congress to take action accepting or rejecting them. The proposal received 53 votes in favor, seven shy of the required 60.

Reducing the deficit to 3 percent of the gross domestic product would still leave an annual deficit of almost $600 billion, compared with $1.4 trillion last year and nearly $1.6 trillion this year, but would at least keep the national debt stable, relative to the size of the economy, a goal endorsed by professional economists.

Obama said continuing the red-ink trend could "hobble our economy. It will cloud our future and it will saddle every child in America with an intolerable burden."

The rising debt threatens to force interest rates up and crowd out private investment, according to economists. And interest payments on the debt will eat up an increasingly large portion of the government's budget, squeezing programs and forcing even higher taxes.

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