The leaders of the U.S. Senate's "Gang of Six" deficit negotiators, Sens. Saxby Chambliss, R-Ga., and Mark Warner, D-Va., said a bipartisan plan is necessary to put the United States on the right fiscal path.
"There needs to be a sense of urgency around this issue," Warner said. "We add $4 billion [to the debt] a day. So every day we don't act … this problem just gets exponentially worse."
All other domestic issues pale in comparison to putting the United States on the path to fiscal solvency, said Warner, who spoke with Chambliss at the Economic Club of Washington.
The group has been meeting since the beginning of the year to create a plan that both sides of the political aisle could accept. Sen. Tom Coburn, R-Okla., who was one of the group's most-outspoken members, dramatically left the negotiations in May saying that the talks were at "an impasse." Chambliss said he hopes to draw Coburn back to the table.
The remaining lawmakers are still working and have no set date to release a proposal, Chambliss said. It is imperative that the senators spend enough time crafting a solution that they can convince colleagues in both political parties to vote for, he said.
"If this plan doesn't make everyone at least a little bit mad, we probably haven't done our job," Warner said.
The U.S. debt is 63 percent of gross domestic product, Chambliss said citing a Congressional Budget Office chart. In 2001, the debt-GDP ratio was 33 percent. Economists have told Chambliss that 90 percent is the tipping point after it is impossible to turn the situation around, he said.
Signing a deficit reduction plan into law would be the greatest thing the United States could do to insert certainty into the marketplace and stimulate job growth, Warner said.
The business community has to be encouraged by the policies going on in Washington for the economy to improve in the long term, Chambliss said. Lawmakers have been failing to do this, he said.
"There is not a lot happening from a policy standpoint to provide certainty in the marketplace," Chambliss said.
The U.S. House of Representatives has been focusing on cutting discretionary spending to get the country out of debt but more action has to be taken, Chambliss said.
Addressing Medicare, Medicaid and Social Security is necessary but Chambliss isn't sure if the plan from Rep. Paul Ryan., R-Wis., is the right answer, he said. Ryan is the Republican point man on the budget.
The U.S. Congress is debating raising the nation's debt ceiling, which is capped at $14.3 trillion. Without raising the limit, the U.S. government could default by August, Treasury Secretary Timothy Geithner has said.
There is a "high probability" of a double-dip recession if the debt ceiling isn't raised and the U.S. defaults on its obligations, Warner said.
There is still time for the United States to resolve the debt crisis but it will take time, Warner cautioned.
"We didn't get into this problem overnight," he said. "We're not going to get out of it overnight."
U.S. Vice President Joe Biden brings congressional leaders together again Thursday in an attempt to craft a compromise that will solve the impasse on Capitol Hill. Republicans want budget reductions equal to any amount above the current debt ceiling. Democrats argue that drastic cuts could harm growth in the sputtering U.S. economy.
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