What should I say when people ask me why we need to confess to an actual person (priest) in order to be forgiven for our sins?
Confession to a priest is a special sacrament that was given by Jesus for us.
1440 Sin is before all else an offense against God, a rupture of communion with him. At the same time it damages communion with the Church. For this reason conversion entails both God’s forgiveness and reconciliation with the Church, which are expressed and accomplished liturgically by the sacrament of Penance and Reconciliation.38
Only God forgives sin
1441 Only God forgives sins.39 Since he is the Son of God, Jesus says of himself, “The Son of man has authority on earth to forgive sins” and exercises this divine power: "Your sins are forgiven."40 Further, by virtue of his divine authority he gives this power to men to exercise in his name.41
1442 Christ has willed that in her prayer and life and action his whole Church should be the sign and instrument of the forgiveness and reconciliation that he acquired for us at the price of his blood. But he entrusted the exercise of the power of absolution to the apostolic ministry which he charged with the "ministry of reconciliation."42 The apostle is sent out “on behalf of Christ” with “God making his appeal” through him and pleading: "Be reconciled to God."43
1444 In imparting to his apostles his own power to forgive sins the Lord also gives them the authority to reconcile sinners with the Church. This ecclesial dimension of their task is expressed most notably in Christ’s solemn words to Simon Peter: "I will give you the keys of the kingdom of heaven, and whatever you bind on earth shall be bound in heaven, and whatever you loose on earth shall be loosed in heaven."45 "The office of binding and loosing which was given to Peter was also assigned to the college of the apostles united to its head."46
-Catechism of the Catholic Church
If someone tells you that only God can forgive sin then there is nothing to debate, Yes only God forgive sins. But Jesus Christ gave the authority to the apostles to absolve sins in His name. *It is a special gift from Jesus Christ to the apostles and their successors, the bishops and all the priests. *