BLITZER: Earlier today President Obama signed an executive order officially creating a controversial bipartisan commission on debt reduction. Today the federal debt is nearly $12.4 trillion, and it goes up every second.

Take a look at this chart that shows the federal debt amount since 1995. You can see the line steadily rise then take a sharp turn upwards at the beginning of the millennium. The projected gross federal debt for this year is around $13.8 trillion, and by 2015, it's projected to come close to a staggering $20 trillion, the nation's debt by then.

Heading up the president's new debt commission are former Clinton White House chief of staff, Erskine Bowles, and former Republican senator, Alan Simpson.

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BLITZER: Thanks very much for joining us, Erskine Bowles, Alan Simpson, you guys have an important assignment right now the president has given you, but Senator Simpson, what teeth do you really have that these recommendations, any recommendations, that you'd make will actually be implemented?

ALAN SIMPSON, CO-CHAIR, NATIONAL DEBT COMMISSION: I haven't the slightest idea in the world. All I know is when the president of the United States asks you to join up for some suicide mission like this, you do. You respect the office. And here we are.

I have no expectations. All I can tell you is that when Erskine and I first visited they said, oh you're going to be a scapegoat, you're going to be a stalking horse for taxes, you're going to be this or that.

I said I'll tell you what we are. We're a stalking horse for our grandchildren. And if anybody can't wake up and smell the coffee about where this country is headed, while all the things you cherish are being wiped out by an engine with no brakes.

BLITZER: Why is this a suicide mission?

SIMPSON: Because we'll be called everything. You know we'll be called -- well, we have some names we were inventing.

(LAUGHTER)

SIMPSON: We will be -- you know, I'll be called a toady of the Republican Party. I think Rush (INAUDIBLE) is after me day and night now, of course, the way he did with McCain. There's no telling what (INAUDIBLE) -- anyway, we will be accused of toadying, of selling out, of tax stalking horses. It just goes with the territory.

Both of us have been in public life long enough to have our skin ripped off but it grows back double strength. And we're ready to go with good humor and good faith. BLITZER: Because you know, Erskine Bowles, in order to deal with the deficit either cut spending or you increase taxes.

ERSKINE BOWLES, CO-CHAIR, NATIONAL DEBT COMMISSION: Yes, I'm pretty good at arithmetic. But what I can tell you -- here's the good news. You know when the president talked to both of us he made it -- he made two things really clear.

First, that this was going to be bipartisan. And he set up a commission that's darn well going to be. And Alan and I are going to be great partners. Second, he said everything's on the table. And that's important because you can't start by taking things off a table and get to battle.

BLITZER: You say everything's on the table. Entitlement spending including Social Security, Medicare, Medicaid. You're ready to deal with that?

BOWLES: Wolf, everything is on the table.

SIMPSON: Everything. We're ready.

BLITZER: You're ready to make recommendations potentially --

BOWLES: Everything.

BLITZER: -- to cut Social Security?

BOWLES: Everything's on the table.

BLITZER: Are you ready to potentially recommend, Senator Simpson, tax increases?

SIMPSON: When I was here in the Senate, this is not some new epiphany for me. When I was here I had a hearing on the AARP once where they shrieked like a gun-shot panther. Nobody came to the hearing but I was there. They have to get in the game. We've got 40 million people out there in that little organization and they're interested in marketing stuff.

BLITZER: Tax increases on the table?

SIMPSON: Everything is on the table. But when you say -- if you're going to use flash words all day long, this is your country, too. You can use all the flash words you want. The reason immigration reform failed is because every time we tried to get a more secure identifier, it was called a national ID. Then parodied all day along.

If you want to just mumble taxes all day or cutting children or veterans and benefits, well, hell, you won't go anywhere but we're going to go somewhere.

BLITZER: Because at stake our children and grandchildren, they're going to be in debt and the country's solvency, economically, is at risk, right? BOWLES: Wolf, it's unbelievable how rapidly this debt is going to grow over the next 10 years, 20 years, 30 years. And if we don't attack it now there's going to be no money for those who want to invest in education or innovation or research so that we can be competitive in a knowledge-based global economy.

There's going to be no money for capital for small businesses to grow and create jobs. We have got to address this deficit. We've got to do it now. And we've got to put everything on the table and we've got to tell the truth.

If we do that we've got a good chance to take it forward.

SIMPSON: Last time they did the corrective work on Social Security they did raise the payroll tax by .1 percent or something. It was a total tweak. That was Moynihan and company, and Bob Dole, great patriots.

We're not in it as Democrats or Republicans, we're in it as Americans. But if they're just going to shrieks of pain (INAUDIBLE), the shrieks of pain for our grandchildren are going to be like the keening wail of a wolf.

BLITZER: It sounds to me like you're going to have deal with potentially the entitlements, Social Security, Medicare, Medicaid.

SIMPSON: Right.

BLITZER: You're going to have to deal with defense spending, too. Is that right?

BOWLES: You're going to have to deal with everything. Everything is everything.

SIMPSON: Yes.

BOWLES: And if you're not willing to do that, then we're not going to get there.

SIMPSON: I just had a vision. I come from cattle country. We're going to slay every sacred cow in the field.

BLITZER: But you raised an interesting point earlier. You're going to be the target, not necessarily from Democrats, but from fellow Republicans.

SIMPSON: Yes.

BLITZER: If you go ahead and recommend some tax increases.

SIMPSON: Well, if --

BLITZER: You're ready for that?

SIMPSON: I don't know what's coming. But all I know is that if we're just going to mumble the word "taxes," those are flash words. And we don't need to do that. We need to talk about your children and the people you care -- or every program in government that you love is going to disappear because of this rudderless engine sucking it up.

BLITZER: What worries me, and let me know if it worries you, long term, not now, not in the short term, like a year or two, but longer term, if something isn't done, inflation, and people's net worth simply disappearing.

BOWLES: Not just inflation but hyperinflation. It could be really bad. That's why we've got to step up, put our big boy pants on, and really go after this and go after it hard.

BLITZER: We're counting on you guys to come up with some solutions because the stakes are enormous right now. Thanks very much. And good luck.

BOWLES: Thank you.

SIMPSON: Our pleasure.