Current projections show that the budget deficit this year could hit $1.6 trillion.
In response, President Obama assembled a bipartisan commission to tackle the problem that includes presidential appointees and members of congress.
Maria Bartiromo spoke with Former Republican Senator from Wyoming, Alan Simpson. Simpson is a veteran of successful bi-partisan budget agreements. And today, Simpson explained what needs to be done to get the deficit under control.
Simpson said, "A lot of blood hair and eyeballs have to lay on the floor before we finish. There's going to be anguishing. This is a suicide mission". It will come from all sides, the left and the right.
When asked if Simpson can make a dent in the deficit without cutting the entitlements? Simpson's answer: "No. You're going to have to do something with the entitlements. You're going to have to limit a situation where you reach a certain age, a certain time of life and then you're entitled to bucks from the federal treasury, regardless of your net worth or your income. That word itself has killed us".
Simpson continued to say the "word "entitlement" to think that you are entitled for something from your government regardless of your net worth or our income is just BS."
Here's the transcript to the rest of Maria's interview:
Bartiromo: You know that's a great way to put it the word "entitlement" because it's true, because who is entitled to anything?
Simpson: But here's my question. The entitlements have been in place for so long, Medicare, Medicaid and yet the fundamentals that require those entitlements have changed dramatically. We're living longer. We're not retiring at 65.
Bartiromo: So you would expect that we would have seen some kind of a change over the years but we haven't. So what's the timing? Will we see these entitlements get cut back?
Simpson: I think it's just what you said moments ago that this is a $1.6 trillion deficit in one year. And nobody knows what that is. All I can hope is that in our little happy band when we all get organized is that we will say it to the American people, all we can tell you is you'll know a hell of a lot more where you are than you do now. With every kind of situation in this country.
I always tell people, what do you like best? Well, I like education or children or health care. Whatever, whatever, you know, button your shirt, your heart fell out. And then I say, well, do you know by doing nothing with social security, entitlements and Medicare, that those engines are coming down the track with no brakes, and we'll squeeze out everything that you love -- all of the discretionary things you love -- will be squeezed or gone.
How's that? That's just really -- you're going at this aggressively, no doubt about it.
I hope that no one will get up and babble into the vapors that all we need to do is cut foreign aid and earmarks and let's see, what's the other one, yeah, waste fraud abuse. If we've done that we've solved everything. That's less than 2% of this raging storm of debt in deficit. So if we can get people off the milk of that and have politicians, say, well I am not going do anything with these programs because I will have to do waste, fraud and abuse and all those marvelous things. And the clapping then goes on. They wander off into the vapors again. It's madness.
Bartiromo: Well, what about taxes? We know that the bush tax cuts will expire the end of this year. So in 2011, we know taxes are going higher. How much higher will you recommend they go?
Simpson: I have no idea. It'll be a bloodbath. You remember the last time we corrected Social Security and people calling me. Let me tell you everything that bush and Clinton or Obama have suggested with regard to Social Security doesn't affect anyone over 60, and who are the people howling and 1/8 bleep 3/8 the most, the people over 60. This makes no sense. You've got scrub out the equation, the AARP, the committee for the preservation of Social Security and Medicare, the gray panthers, the pink panthers.