Erskine Bowles (far left) and Alan Simpson talk with President Barack Obama in 2010. (Photo: AP)

The two co-chairmen of the National Commission on Fiscal Responsibility and Reform, Alan Simpson and Erskine Bowles, warned lawmakers on Tuesday that any deal to reduce the federal budget deficit by no more than $1.2 trillion would “merely delay” the nation’s fiscal problems.

In testimony before the bipartisan Joint Select Committee on Deficit Reduction, Bowles and Simpson said that it was “supremely important that the committee succeed” in reaching an agreement by its Nov. 23 deadline, not only for the sake of the economy but also because a failure to reach a deal “might result in another downgrade” of the nation’s credit rating.

“At best, a failure would shake public confidence,” the two said in their joint testimony. The committee, they said, “should work to reach agreement on as many specific options for savings as possible” within the next 23 days.

Bowles and Simpson said that both spending cuts and increased federal revenues must be on the table in order to reach any meaningful solution.

Said Bowles: “I’m worried [this commission] is going to fail the country…. We face the most predictable economic crisis in history, the economic path we are on is not sustainable.” The big problems for the deficit, Bowles said, come from four sources: healthcare; too much spending on defense; the nation’s tax system is ineffective and inefficient; and the interest on the nation’s debt.

However, coming to a consensus is likely going to be a challenge, as William Sweetnam, co-chairman of Groom Law Group’s policy and legislation group, and the former benefits tax counsel in the Office of the Tax Policy at the U.S. Department of the Treasury, told AdvisorOne on Tuesday that committee members are still “stuck in a lot of areas.”

Former Republican Sen. Simpson and former Clinton administration Chief of Staff Bowles told members of the deficit reduction committee that while $1.2 trillion in deficit reduction “would be a small step forward, it’s important that the American people understand and the Congress realizes that $1.2 trillion in deficit reduction will not solve our long-term fiscal problems and that significantly more deficit reduction will need to be done to stabilize the debt and put it on a downward path as a percent of GDP.”

By now, they said, “everyone must understand that $4 trillion of deficit reduction is not the maximum we need to reduce the deficit over the next 10 years; it is not the ideal amount, it is the minimum amount we need to reduce the deficit to put our fiscal house in order and to stabilize our debt and get it on a downward path as a percent of GDP.”

Others testifying at the hearing were Alice Rivlin, founding director of the Congressional Budget Office, and former Sen. Pete Domenici.

The joint deficit reduction committee was formed by debt-ceiling legislation signed by President Barack Obama in early August. If the joint committee or Congress fail to act by Dec. 23, the bill calls for automatic across-the-board cuts, split 50-50 between defense and non-defense spending, including Medicare. Social Security and Medicaid would be excluded.

Senator Majority Leader Harry Reid, D-Nev., has said that the committee’s legislation will be given “expedited consideration, with a guaranteed up-or-down vote in the Senate before Christmas.”