George Stephanopoulos: Debt Commission to Call the 'Bluff' of Voters Who Want to Cut Spending

GEORGE STEPHANOPOULOS: A week after voters seemed to say that they wanted more aggressive action against the deficit, the chairmen of a presidential commission are calling their bluff. They have come forward with a dramatic proposal for almost $4 trillion in budget, cuts over the next decade, those include cuts in Medicare, defense, and other domestic spending, some tax increases, and a rise in the Social Security retirement age. So, can Congress and the country sign on? How will the President respond? We got a first look overnight from Seoul, South Korea, where Jake Tapper is traveling with the President. Jake?

JAKE TAPPER: Good morning, George. Greetings from the other side of the planet. At this summit of the world's economic superpowers, President Obama and the United States in general, are facing criticism about the lack of the ability to deal with the massive U.S. debt. Meanwhile, back at home, the President's debt commission co-chairs have issued a report, detailing ways to deal with that $14 trillion debt. It is a report with something in it to offend everyone. Speaking in South Korea, the President said he would not comment specifically on the debt commission co-chair's report, but he cautioned politicians to not to be so quick to shoot it down.

BARACK OBAMA: We're going to have to make some tough choices. The only way to make the tough choices, historically, has been if both parties are willing to move forward together.

TAPPER: He also suggested that he recently heard a lot of disingenuous solutions during campaign season.

OBAMA: And unfortunately, a lot of the talk didn't match up with reality.

TAPPER: The commission co-chairs were even more forceful.

ERSKINE BOWLES (Co-chair, Natl. Comm. On Fiscal Responsibility & Reform): This debt is like a cancer that will truly destroy this country from within if we don't fix it.

TAPPER: Their prescription? Tackling Social Security, by raising the retirement age to 69 and reducing payments to wealthier recipients. Cutting $2 trillion in government spending, including $100 billion in Pentagon spending and reducing Medicare fees for doctors. Raising almost $1 trillion in taxes by expanding the payroll tax, limiting mortgage tax deductions and other tax write-offs. And possibly hiking the federal gas tax by 15 cents per gallon. Conservatives and liberals united to oppose, even members of the commission joined in.

UNIDENTIFIED FEMALE MEMBER: This is not the way to do it.

TAPPER: But the President today is focused on a showdown with currency over China.

OBAMA: If individual countries are engaging in practices that are purposely designed to boost their exports at the expense of others, that can contribute to problems, as opposed to solving them.

TAPPER: The White House believes China is artificially devaluing its own currency by buying up U.S. dollars on the open market, making it cheaper for them to manufacture. But the issue has been complicated by the federal reserve, which last week announced it would inject $600 billion into the fragile U.S. economy, a task designed to increase U.S. manufacturing and jobs, but raising new charges of U.S. currency manipulation. And, George, in other economic news, the White House continues to signal its willingness, the President's willingness to compromise on the bush tax cuts. David Axelrod told the Huffington Post that the President is willing to consider temporarily extending the Bush tax cuts on the wealthy, if that is the price to pay to get the Bush tax cuts on the middle-class passed. The President continues to feel that they are fiscally irresponsible, to extend them to the wealthy. But, quote, "He is not willing to trade away security for the middle-class in order to make that point." George?