Tick tock. The clock winds down for a special congressional panel charged with taking a major chunk out of the nation's deficit spending.

As the Joint Select Committee on Deficit Reduction heads toward a Nov. 23 deadline, it's still not clear whether its members will succeed in cutting deficit spending or fail just like a long string of high-level negotiators before them.

See also: Debt challenge could overwhelm supercommittee.

Time is running out for the congressional supercommittee to agree on deficit cuts. — Photo by Inmacor/Getty Images, Martin Shields/Getty Images

President Obama urged the dozen members of the "supercommittee" to strike a deal that includes a balance of spending cuts, which Democrats have resisted, and tax hikes, which Republicans have opposed.

"There's no magic formula. There are no magic beans that you can toss on the ground, and suddenly a bunch of money grows on trees," Obama said during a news conference Monday in Hawaii.

But whether the committee of six Republicans and six Democrats can complete its mission to cut the deficit by at least $1.2 trillion over 10 years, older Americans have a lot of stake.

If no deal is reached, automatic cuts will hit military and domestic spending, including Medicare providers and funds for home-delivered meals and housing for older people. And jittery financial markets could punish the United States for its huge debt, driving up interest rates that consumers and the government pay.

"What's at stake is confidence in our democracy as well as our economic future," says Brookings Institution scholar Isabel Sawhill.

If a deficit-cutting package is passed, it could cut Social Security cost-of-living adjustments, increase Medicare costs for beneficiaries and change the tax code.

AARP Legislative Policy Director David Certner says the cuts could hit wallets quickly.

"There are still significant Social Security and Medicare cuts on the table," he says. "These would not [just] be cuts on future retirees but on current retirees."

Social Security could be trimmed

The change to Social Security's COLA formula is among the proposals that will likely be part of a deal, says Robert Bixby, executive director of the Concord Coalition, a nonpartisan organization that pushes for eliminating the federal deficit.

The "chained consumer price index" would cut the annual benefit in the first year by an average $42 per beneficiary and would be compounded annually. The formula assumes that when prices go up, citizens subsidize cheaper products — such as buying chicken instead of steak. But that smaller inflation increase isn't fair to older people because many have high medical costs that increase faster than inflation, have limited incomes and already buy cheaper products, Certner says.

"For moderate-income seniors, they are already eating chicken," Certner says. "The chained CPI is not an accurate measure for the elderly."

The formula change also would apply to other federal programs and to federal taxes, which would push people into higher tax brackets more quickly. The Social Security portion of that change alone would cost seniors $112 billion over 10 years.

The loss in benefits compounds yearly, so younger retirees would see the most effect over their lifetime, according to Max Richtman, president and CEO of the National Committee to Preserve Social Security & Medicare.

Older people could end up with less in Social Security benefits and higher costs for health care through Medicare, he says. "It's going to really squeeze a lot of beneficiaries."

Next: Higher costs for Medicare patients are a possibility. >>