The Government Accountability Office estimates that if Congress extends all the Bush tax cuts and does not tame spending, the debt problem will quickly spiral out of control. By 2019, interest due on the debt would more than triple as a share of gross domestic product (GDP), or the overall output of goods and services. The trend would persist, driven by Medicare costs and by tax revenues that fail to keep up. (See chart.)
So, are taxes going up?
Slowing the surge in spending is the vital part of any budget fix. But the looming budget gap is so large that many finance experts say taxes must rise. Mr. Obama has called for higher taxes on households earning more than $250,000 a year. He also drew sharp criticism from Republicans when he said he was "agnostic" on whether his fiscal commission would consider broader-based tax hikes.
Robert Gibbs, White House spokesman, said Obama hasn't reneged on his campaign pledge not to raise taxes on the middle class, that he has only said he wants his commission to be able to discuss all options.
"I cannot see how he can solve this problem without backing down on that [campaign] pledge," says Mr. Bixby.
What role can a commission play in finding solutions?
Sometimes plans offered by an independent commission can provide cover for lawmakers as they prepare to take a politically sensitive vote. The goal is bipartisan buy-in, since neither party would want to be viewed as responsible for a big tax hike or entitlement cut.
On Feb. 18 Obama named Erskine Bowles, President Clinton's former chief of staff, and former Republican Sen. Alan Simpson of Wyoming to head his fiscal commission. The panel's success will depend on how both parties size up the mood of the electorate. A key question is whether Republicans feel they have more to gain by criticizing Obama and the commission than by seeking a bipartisan fiscal deal.