NEW YORK (CNNMoney.com) -- Congress must craft a credible plan soon to bring spending in line with revenue to close the unsustainable fiscal gap threatening the economy, key policymakers urged Tuesday.
"The path forward contains many difficult tradeoffs and choices, but postponing those choices and failing to put the nation's finances on a sustainable long-run trajectory would ultimately do great damage to our economy," Federal Reserve Chairman Ben Bernanke told a bipartisan panel charged with proposing ways to curb deficits.
The 18-member panel, created by President Obama, met for the first time Tuesday.
Speaking from the White House, Obama said that the present fiscal situation "will require that we put politics aside -- that we think more about the next generation than the next election. There is no other way."
The country's debt held by the public will top 60% of total economic output -- or GDP -- by the end of the year. That's high, to be sure, but the longer-term outlook is what most concerns deficit experts.
Lawmakers must start within the next few years to reduce spending and raise more revenue, experts say. If they don't, public debt will hit 90% of GDP by 2020. And history shows that such debt levels can damage the economy.
Put more starkly: "We're facing a serious and perhaps catastrophic threat to the future prosperity of the United States," said Alice Rivlin, a commission member appointed by Obama who served as White House budget director during the Clinton Administration.
And no one should be surprised if the threat turns into a crisis, said commission member Paul Ryan, the leading Republican on the House Budget Committee.
"We have before us the most predictable economic crisis that we've ever had in this country," Ryan said. "Sovereign debt crises are popping up all over the world, and we are kidding ourselves if we don't think it could come to us next."
Bernanke and others urged lawmakers to form a credible plan now to address the debt situation -- with measures that will take effect over time.
Putting a plan together can benefit the United States in three ways, Bernanke said. It would bolster U.S. credibility in financial markets and keep interest rates down. Second, it could preempt harsher policy shifts later on. And it would give those affected by any changes time to adapt.
The commission has a two-fold mission. The first task is to recommend ways to reduce the deficit to 3% of GDP by 2015, down from the 6% currently projected. That's a first step in making sure the growth rate in debt is "sustainable" -- meaning it won't outpace economic growth every year.
The panel's second task is to put the federal budget on a more sustainable course long-term. Translation: Tackling Medicare, Medicaid and Social Security.
Those three programs plus interest on the nation's debt are on track to consume 93% of all federal tax dollars collected by 2020, according to estimates from the Government Accountability Office.
By 2030, interest payments alone will top 8% of GDP -- making it the largest single expenditure in the federal budget.
To prevent that from happening, "everything is on the table," said the president and the commission's co-chairmen -- former Sen. Alan Simpson, R-Wyo., and Democrat Erskine Bowles, who served as President Clinton's chief of staff. (See who is on the commission.)
But while the commission is made up of lawmakers from both parties and experts with wide-ranging ideologies, its way ahead will be hard.
After all, politicians have been tripping over themselves lately to declare what they believe should be off limits, like a value-added tax or cuts to Social Security.
Plus, almost no lawmaker is willing to let the 2001 and 2003 tax cuts expire for low- and middle-income families. Making the cuts permanent for most Americans will cost more than $2.5 trillion over 10 years. But lawmakers are not planning to pay for that cost with other changes to the budget.
Simpson and Bowles urged commission members to put country first.
"Anything we eventually do ... will be met by howls of anguish. 'Not me. How could you? You uncaring slobs!' I mean, get ready for it," Simpson said. "The extreme right and the extreme left will savage our final product ... forgetting that we are not Democrats and Republicans and zealots, first we are American citizens. So we have to establish and reestablish trust."
To meet its goals, the commission will need to find hundreds of billions of dollars a year in either new tax revenue or spending cuts. The most palatable solution, experts say, is to come up with a combination of the two. But even that won't be easy.
And the commission won't have much time. The panel is supposed to produce a report for the president by Dec. 1.
Under the executive order establishing the panel, 14 of the 18 members must approve any official recommendations to Congress. The commission includes six presidential appointees plus a dozen lawmakers -- evenly divided between parties -- from the House and Senate.
Experts aren't optimistic the votes will be there. But they expect some of the ideas that get the most support in the commission could be incorporated into the president's 2012 budget proposal.
Deficit experts also hope the fiscal commission will embark on a public education campaign. That would help build public understanding, making it easier for lawmakers to make the tough budget decisions required.
If the commission defies expectation and manages to cull 14 votes for its recommendations, Congress will be under no obligation to accept them or even consider them.
However, Senate Majority Leader Harry Reid, D-Nev., and House Speaker Nancy Pelosi, D-Calif., have given their assurances -- in writing -- that they will bring the group's recommendations to the floor for procedural votes before the end of the year. The House would only take them up, however, if they pass the Senate first.
US regulators are close to slapping Wells Fargo with a $1 billion fine for forcing customers into car insurance and charging mortgage borrowers unfair fees. More
Ads from over 300 companies and organizations ran on YouTube channels promoting white nationalists, Nazis, pedophilia, conspiracy theories and North Korean propaganda, a CNN investigation has found. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
The average Arizona teacher is paid less today than in 1999. More