Obama sets up deficit reduction commission

Bowles served as chief of staff to President Clinton and formerly headed the U.S. Small Business Administration. Simpson served as a Republican senator from Wyoming, who according to Obama, developed a reputation for putting the country's interest ahead of political partisanship.

Following brief remarks in the White House, the president signed an executive order creating the National Commission on Fiscal Responsibility and Reform, a bipartisan group that will recommend specific steps to reduce the national deficit.

The announcement early Thursday morning came just a day after President Obama and other administration officials touted the success of the 2009 Recovery Act, the $787 billion federal stimulus package that included tax cuts, aid to state and local governments and new infrastructure spending.

Republicans in Congress have resisted legislative efforts to set up a bipartisan deficit reduction panel, perhaps hoping to deny President Obama the opportunity for a potential legislative victory or the appearance of working with the president to reduce the deficit.

Republicans are hoping to utilize the economic anxiety in America to make big gains in the House and Senate in the November 2010 elections.