GEORGE STEPHANOPOULOS: The President said he wished he would have pushed that harder last year. Okay. Thanks very much. But, of course, those earmarks are just a tiny fraction of what it will take to tackle the country's debt and deficit problem. We got a sense of just how hard it will be to bring down deficit last week that when the chairman of the President's deficit commission issued their recommendations. Their proposals going after just about every sacred cow in the budget are already drawing fire from all sides. And now in his first television interview to answer the critics, we're joined by the chairman panel, Erskine Bowles, former White House chief of staff and President of the University of North Carolina. Thanks for joining us this morning, Mr. Bowles.

ERSKINE BOWLES (Co-chair, President's Comm. On Fiscal Responsibility): I'd glad to be here, George. I hope you're doing good.

STEPHANOPOULOS: I'm doing well. Let's get right to it. You know, you all put everything on the table last week. Huge cuts in discretionary spending, $200 billion. Taking away popular tax deductions like the home mortgage deduction, the gas tax, eventually raising the Social Security retirement age. And I wonder if you could begin by boiling it down in just a sentence or two for everyone at home. They're going through tough times right now. Why is it necessary to make these sacrifices?

BOWLES: Because the problem we face is real. The path we're on is unsustainable. This debt that is building up is like a cancer. It will literally destroy our country from within if we don't tackle it. George, by 2020, we'll have over $1 trillion in interest payments alone. Can you imagine that amount of money flowing out of this country to build better school, better roads, to do high-value research in other countries, rather than doing it here? This is a problem that we have to face up to. We have no choice.

STEPHANOPOULOS: You know while you're making these proposals, the Congress is about to come back and talk about whether to extend the tax cuts first passed under President Bush. By extending them, that's going to cost about $4 trillion, about the amount that you save. Couldn't some of this be avoided by keeping the tax rates where they are? I mean, by letting them go back to where they were in 1998 when you were White House chief of staff?

BOWLES: George, first ever all, I surely don't believe that people like you and me need a tax cut. But putting that aside, what we are proposing is to wipe out a whole bunch of these tax expenditures. Then we will be able to broaden the base, simplify the code, actually bring rates down and reduce the deficit. We can take rates down from an eight, 14 and 23, and take $100 billion a year to reduce the deficit. I think that is kind of smart economics as opposed to what they're talking about today.

STEPHANOPOULOS: But, as you know, some of your critics disagree. Paul Krugman, the New Nobel Prize winning economist has been quite tough on it. He says taking away the deduction for the home mortgage deduction, the deduction for employer provided health care will end up creating a mixture of tax cuts and tax increases that is tax cuts for the wealthy and tax increases for the middle class. Your response?

BOWLES: Well, I think if you'll look at a distribution analysis, you'll see, A, that's not true. But, B, what we say is, let's take these out. Lets ring rates down to eight, 14 and 23. Then if you want to add about back like the mortgage interest deduction, then tell us how you're going to pay for it.

STEPHANOPOULOS: So you are willing to have some sort of compromise or tradeoffs going down the line?

BOWLES; Yeah, we say that in the report very clearly.

STEPHANOPOULOS: So far just you and your fellow, your co-chair, Alan Simpson, the Republican, have signed on for the proposals. The idea is to get 14 of the 18 commission members to sign on before you can get a vote in the Congress. But none of the other commission members have yet signed on. Do you think you can get the 14 by the December 1st deadline?

BOWLES: I'd say I'm hopeful. What we're trying to do is to listen to other people's ideas to see how we can improve this package. The President asked to us get a deficit to GDP ratio down to three percent by 2015. And then to address these long-term imbalances. We've gotten lots of cooperation. We've spent months and months listening to people on both sides of the aisle. And that's the way you build up trust and you find compromise and you find a way to really solve what is a very, very difficult problem.

STEPHANOPOULOS: You actually tweaked President Obama last week. You said as you were listening that you've probably listened to more Republicans and more Republican proposals as chairman of this commission than he has as President. You said at the beginning of this process that you're confident that President Obama is going to sign on to these proposals. Are you still confident of that? He wouldn't comment last week.

BOWLES: Well, I don't think I tweaked him. What I said is, the only way you find out where people are is to spend literally hours and hours, months and months, listening to them, trying to find that common ground, trying to build up trust. And that's what we tried to do. We spent a lot of time with both Republicans and Democrats.

STEPHANOPOULOS: And what happens though-

BOWLES: The President has said very clearly, George, upon his return to the country that what he wants to do is to have these proposals which we made which he says are quite serious, reviewed, discuss and see what comes out of our entire commission.

STEPHANOPOULOS: But, if you don't get the 14 of the 18, what happens next?

BOWLES: Then what we have done is lay a predicate for the next Congress to lay a predicate deal with where we have $3 of spending cuts for every dollar of revenue increases.