Fact Check: Hard Steps Ahead to Reduce the Federal Deficit
Economists who advised Clinton and Bush weigh in on controversial cuts.
Dec. 1, 2010— -- A presidential commission had a wakeup call for the nation today, releasing a document that outlines the tough choices the country faces to reel in its runaway debt, now totaling almost $14 trillion.
Two of the toughest choices involve Social Security and Medicare, programs that have long been considered so untouchable that they're known as the third rail of American politics.
Watch "ABC World News with Diane Sawyer" for more on this story.
So what are the facts on how the deficit can actually be reduced? Today, ABC News spoke to economists who have advised both Republican and Democratic presidents, asking whether it's possible to reduce the deficit without touching those big ticket items.
When it comes to Social Security, the commission recommends slowly raising the retirement age from 66 to 69 by the year 2075. Commission members would also reduce benefits from the program.
Can Deficit Be Cut Without Touching Social Security?
As unpopular as that might seem, is there a way to avoid changes to Social Security and still fix the deficit?
"No," said Gregory Mankiw, the former chairman of President Bush's Council of Economic Advisors. "Social Security is part of the problem and it has to be addressed."
Mankiw believes that the commission's bipartisan proposal makes sense, and so does Jeff Frankel, who held the same chairmanship during the Clinton Administration.
"No question, we have to cut Social Security," Frankel said.
Economists say that you have to look at the pie chart showing the nation's spending. Social Security consumes some 20 percent of the federal budget, and Medicare takes a bite nearly as big.
Is It Possible to Protect Medicare and Reign in the Deficit?
Experts told us there's simply no way to rein in the deficit without touching Medicare. The panel's tough guidelines call for a freeze on Medicare payments to doctors through 2020.
"Medicare is part of the problem, an even bigger part of the problem than Social Security," said Mankiw, pointing out the aging baby boomers who will cause healthcare spending to skyrocket in coming years.
Clinton's advisor, Frankel, was again in agreement.
"We have no choice," he said.
Deficit and Defense Spending: What Must Be Done?
Lastly, there's the issue of defense spending. It accounts for roughly 20 percent of the federal budget and has long been considered untouchable by many. But according to our economists from both sides, it must be cut to reduce the overall deficit.
"I mean, the Pentagon has weapons systems they don't even want, all because it's made in some congressman's backyard," said Frankel.
The panel's suggestions may be tough, but according to these men who served Bush and Clinton, they're the only only option.