President Barack Obama on Thursday went around Congress and set up a panel tasked with cutting the federal deficit.

The 18-member committee will be headed up by former Clinton administration White House Chief of Staff Erskine Bowles and former Wyoming Republican Sen. Alan Simpson. Four members will be appointed by the president. Democratic and Republican leadership get to appoint six members each.

The panel is to meet and report on ways to cut the deficit to 3 percent of the gross domestic product. Last year, the deficit came to nearly 10 percent of the GDP and is ex...