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WASHINGTON (Reuters) � With just two months left before it has to issue a final report, a U.S. commission looking at ways to cut the federal deficit was to meet again on Wednesday amid questions about its hard-headedness.

Getting the government's budget out of the red and back into the black -- after years of costly wars, tax cuts and recession -- will require spending reductions and tax increases, according to most analysts looking at the issue.

But in a highly charged pre-election political climate, making hard judgments on these fronts may be too much to ask of the panel set up in February by President Barack Obama, said the same analysts, who have watched the commission closely.

Politicians from both parties and a handful of business community figures are led by former White House chief of staff Erskine Bowles and former Senator Alan Simpson on the 18-member National Commission on Fiscal Responsibility and Reform.

Bowles is a Democrat who worked for President Clinton, while Simpson was a top Senate Republican for many years.

As if the panel's job weren't tough enough, the National Organization for Women and other activists plan to picket outside Wednesday's meeting to demand Simpson's ouster.

He angered women's groups last month when, in an email to a critic, he likened the national Social Security retirement pension program to "a milk cow with 310 million tits."

Social Security is one of several areas being eyed by the panel for changes. Others include Medicare, the defense budget and a range of tax policies, including popular tax deductions for mortgage interest and charitable giving, analysts said.

Virtually every item on the commission's hit-list has a political constituency that is bound to be angered by any attempts at reform, said Maya MacGuineas, director of fiscal policy at the New America Foundation, a think tank.

That's what happens when a problem like the budget deficit is left to fester for so long. Easy solutions fade away until only the tough choices remain. "There's no fix now that doesn't include political third rails," MacGuineas said.

The budget deficit as of the end of the federal fiscal year on Thursday is estimated to be $1.3 trillion to $1.5 trillion -- figures that are hard to comprehend and scare voters.

A Reuters/Ipsos poll last week showed that 57 percent of Americans see cutting the deficit as a better way to help recovery than raising government spending, although many economists warn spending cuts now could hurt the economy.

A group of 300 economists, including former Secretary of Labor Robert Reich, earlier this month signed a statement warning of "a grave danger that the still-fragile economic recovery will be undercut by austerity economics."

Although Republicans are dug in to resist tax hikes and Democrats are rushing to defend cherished programs, the stark reality is that the deficit must be dealt with sooner or later, said Brookings Institution fellow Isabel Sawhill.

"The long-term fiscal picture is just horrific ... It may take a crisis before we can break the political stalemate. I have been traveling as part of a 'fiscal solutions' tour and the public is very frustrated about the lack of action," she said.

(Additional reporting by David Lawder and Andy Sullivan. Editing by Eric Walsh)

HONG KONG (Reuters) � Asian stocks hit a two-year high and the dollar was stuck near a seven-month low after poor U.S. data reinforced expectations the U.S. Federal Reserve will take more action to help the struggling economy.

Gold firmed near record peaks as the Fed and Bank of Japan look to pump more funds into global markets via bond purchases and other measures as major economies struggle.

Asian stocks outside Japan rose 0.7 percent and were poised for their biggest monthly gain since July 2009, up 11.9 percent, in what is historically one of the worst months for stocks.

Japan's Nikkei (.N225) rose 0.6 percent, helped by the yen's slight retreat versus the dollar and as a dour outlook from Japanese manufacturers raised hopes for more BOJ easing.

"The Nikkei's rising on the slightly weaker yen, and there's also probably some window-dressing ahead of the end of the first half of the business year," said Norihiro Fujito, general manager at Mitsubishi UFJ Morgan Stanley Securities.

A closely watched survey of Japanese manufacturers showed confidence improved for a sixth straight quarter but they turned negative on the outlook in a sign that yen strength could derail the fragile economic recovery and spur the central bank to ease policy next week.

Spot gold inched up on Wednesday, hovering near a record high hit in the previous session, on expectations of continued dollar weakness and further monetary easing by the Fed.

U.S. consumer confidence fell to its lowest level in seven months with unemployment levels at 26-year highs.

The Federal Reserve said last week it was prepared to put more money into the economy, if needed, to stimulate the recovery and avoid deflation.

The Fed is likely preparing a fresh round of quantitative easing measures to announce at the end of its November 2-3 meeting, hedge fund adviser Medley Global Advisors said in a report on Tuesday, a market source told Reuters.

The Fed is also weighing a more open-ended, smaller-scale bond buying program, the Wall Street Journal reported.

Oil rose on Wednesday after an industry report showed crude and winter fuel stockpiles declined last week in top-consumer the United States, reducing a surplus that has weighed on market sentiment for months.

Shanghai copper opened 0.5 percent higher, chasing prices in London that climbed to near five-month peaks, and continued on dollar weakness.

(Additional reporting by Elaine Lies in TOKYO; Editing by Alex Richardson)

WASHINGTON/NEW YORK (Reuters) � Johnson & Johnson's (JNJ.N) massive recall of popular medicines, including a stealthy recall of some Motrin packages, has eroded the company's reputation and put pressure on chief executive Bill Weldon who appears before a congressional committee on Thursday.

J&J recalled 40 widely used nonprescription products for children and infants, such as Tylenol, in late April after Food and Drug Administration inspectors found filthy equipment and contaminated ingredients at a Pennsylvania factory.

The plant operated by J&J's McNeil unit is still closed, crimping sales, cutting the consumer standing of well-known J&J brands and marring Weldon's generally successful eight years at the helm.

Combined with several other recalls since January, the company has pulled nearly 200 million bottles of various medicines.

No injuries from recalled products have been reported but industry analysts say consumers have turned to cheaper, store brand alternatives.

How "is J&J going to rebuild a product loyalty and product identity when the products have been off the market for so long," asked Ira Loss, who follows FDA matters for Washington Analysis Corp.

It will be Weldon's first major appearance on the recalls. He did not appear at a congressional hearing in May; the company said he was recovering from back surgery.

Other witnesses due to appear before the U.S. House of Representatives Oversight and Government Reform Committee on Thursday include FDA Deputy Commissioner Joshua Sharfstein and Colleen Goggins, the company's longtime consumer healthcare chief who is due to leave March 1.

J&J's recalls have prompted Committee Chairman Edolphus Towns to push legislation giving the FDA greater recall power.

WELDON'S FUTURE

There is no mandatory retirement age for CEOs at J&J. Weldon, the silver-haired native New Yorker who joined the company 39 years ago, has not announced plans to retire.

Some analysts said Weldon could stay for another year or so to get improvements in place before making what could be seen as a natural exit.

"This will be just a minor blemish on what's been a steadily growing company," said Gabelli & Co analyst Jeff Jonas, who said a leading Weldon successor is Dominic Caruso, the company's gregarious chief financial officer who is often front and center at company investor meetings.

Investors have so far been forgiving. Since the April recall, its shares have roughly matched the overall market, falling 3.5 percent compared with the 3.8 decline in the S&P 500 index (.SPX).

But a survey released Tuesday showed consumer opinion of Tylenol products, even those not recalled, slipping among consumers from 2009.

Out of 500 brands polled this year, Tylenol allergy products dropped nearly 200 places in the rankings from 289 to 488 while Tylenol pain products fell 76 spots from 243 to 319, according to Brand Keys Inc, a consumer and brand loyalty consulting firm that has conducted the survey for 14 years.

While few analysts see Weldon's performance Thursday as harming the 61-year-old executive's tenure, it could have a real effect on whether consumers return when the products do.

"The well of loyalty is not bottomless," said Robert Passikoff, president of Brand Keys. "The J&J thing has been going on for a while, and as that happens there is this erosion of the emotional link between the brand and the consumer."

'SOFT' RECALL

J&J declined to offer any update, ahead of the hearing, on its efforts to fix McNeil's Fort Washington, Pennsylvania plant. Company spokesman Jeffrey Leebaw said the factory is not expected to not reopen until the second half of next year.

The FDA has said it is weighing possible civil and criminal action against J&J for its actions.

Weldon is expected to face sharp questioning over the manufacturing issues and also whether the company had FDA permission to conduct a soft recall of Motrin in 2009 from 4,000 stores across 40 states. It hired a contractor to send out employees posing as buyers for an eight-caplet package sold at convenience stores.

Last week, lawyers for J&J said the purchases were legal and that FDA knew about them despite the lack of a formal agreement.

But the FDA has said that is not the case.

"Right now, there is no independent evidence that showed anybody at the FDA approved it," said a congressional source familiar with the committee investigation.

More documents submitted since the May hearing, including several released on Tuesday, show J&J directed the buyback, the source said, adding that the contractors have also submitted numerous documents.

On Tuesday, Committee Ranking Republican, Representative Darrell Issa, asked the Department of Health and Human Services' inspector general to investigate the FDA's role.

Gabelli analyst Jonas said Weldon's best strategy would be to take responsibility and come out publicly and admit J&J made mistakes.

"He needs to stick with that message and be as specific as possible about how they're overhauling the plants," he said.

(Reporting by Susan Heavey in Washington and Ransdell Pierson in New York; Editing by Tim Dobbyn)