RALEIGH, N.C. (AP) -- With the deficit on pace to reach $1.6 trillion this year, the economy slow to recover from the Great Recession and entitlement programs burdened by the unemployed and aging baby boomers, North Carolina's next U.S. senator will face tough questions about how to put the nation's fiscal house in order.

The three leading candidates seeking the Democratic Senate nomination in May agreed in separate interviews with The Associated Press the short-term surge in federal spending through stimulus legislation must continue to generate job growth and consumer spending so that tax revenues can ultimately rebound.

The debt is unsustainable in the long term, Chapel Hill attorney Ken Lewis said, but I believe though that we must first act to end this recession because, part of the reason the debt is as high as it is, is we're in a recession.

Once the economy is back on its feet, the candidates said, the federal debt -- now at a breathtaking total of $12.8 trillion and projected to reach $18 trillion by 2014 -- needs to be pulled back so as not to discourage economic growth and place Social Security and Medicare on stronger long-term footing.

Secretary of State Elaine Marshall suggested raising the current retirement age of 67 to receive full Social Security benefits or the income cap on levying Social Security taxes should be examined to help develop an austere budget strategy.

With an aging electorate, some hard choices are going to have to be made on some of these programs, Marshall said.

Lewis believes cutting unnecessary military weapons programs and widespread government efficiencies could help. Cal Cunningham, a Lexington attorney and former state senator, said he would consider slashing the number of federal contractors, tightening tax collection enforcement and strengthening pay-as-you-go spending policies.

The debt is one of the defining issues of our time, Cunningham said. This is a legacy issue from one generation to the next.

Cunningham, Lewis and Marshall emerged earlier this year as the strongest candidates to challenge for Republican Sen. Richard Burr's seat, each entering 2010 with more than $100,000 in campaign cash. Three other less-prominent candidates in the race were asked to respond to a series of AP questions in writing.

The three leading candidates endorse on their Web sites proposals a temporary tax credit for employers who hire new workers through 2011 or longer in an amount equal to a percentage of the new worker's salary, perhaps as high as 25 percent.

Cunningham wants to eliminate capital gains taxes for investments in small businesses and help thaw more quickly frozen credit for growing firms. Lewis wants to create a $30 billion investment fund for building public schools, leading to construction jobs. Marshall would seek a small transactions fee on every stock transaction to pay for her job creation initiatives.

The three were joined by Ann Worthy of Gastonia and Marcus Williams in Lumberton in supporting President Obama's proposal to let expire the 2001 and 2003 tax cuts on those making more than $250,000 annually, but extend in one form or another tax breaks for those with less income.

This seems like a logical move with great economic advantages for the country, Worthy wrote.

A sixth candidate, Susan Harris of Old Fort, didn't respond to the questionnaire, but a statement on Harris' Web site says nothing else is going to matter unless we methodically attack our debt.

Members of both parties were critical of a $787 billion stimulus package last year in part because it contributed to an already ballooning deficit. The five responding candidates all backed the health care overhaul bill approved last month. Democrats say the law will trim the deficit. Republicans disagree.

As of last October, the national debt was equal to 83 percent of the country's gross domestic product, the highest level since 1950, according to the White House budget office. The percentage could exceed 100 percent as early as 2012, which could increase worries among foreign investors of U.S. government securities whether they'll be repaid.

Lawrence Morse, an economics professor at North Carolina A&T State University, said the federal government must generate surpluses to pare down the debt when the economy recovers. He argues more stimulus is needed now, saying the U.S. economy saw unemployment soar in the late 1930s after the government eased back on spending during the Great Depression.

If you let off the gas too soon you're not going to get out of the recession, Morse said.

Williams wrote Congress should scrub each and every line item of the budget to evaluate where spending freezes and cuts should be made.

Cunningham said there needs to be more consistent use of pay-go policies in Congress that require tax cuts or new benefit programs be paid for with tax increases or cuts to other programs that won't add to the deficit, he said.

Honest budgeting is the main way we tell the American people ... where we are and where we need to go, he said.

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