The very rich may be partially responsible for the current deficit debate in Washington, according to experts who have studied the policy views of the wealthiest 1 percent of Americans.
As lawmakers began the process of pursuing $4 trillion in deficit reduction two years ago, the public was much more concerned about jobs. Over the course of 2011, the share of those who cited unemployment as the nation’s “most important problem” was anywhere from double to triple the size of those worried about the federal budget, according to monthly Gallup surveys at the time. Yet, among the richest Americans, deficits were the primary concern, according to a newly published study. And that may have helped define the current debate, the researchers argue.
“The small minority that saw the deficit as the nation's priority had more clout than the majority that didn't,” two of the three researchers—professors at Northwestern and Vanderbilt universities—wrote in a recent Los Angeles Times op-ed. The evidence that the wealthy enjoy a disproportionate amount of political influence is growing, the authors argue. So, “extreme differences between their views and those of other Americans could significantly skew policy.”
Because of the difficulty in isolating such a small voting bloc, few studies have looked at the policy preferences of the very wealthy, the trio wrote in their paper in the American Political Science Association’s Perspectives on Politics journal. Their survey was conducted in the winter and spring of 2011 and is based on responses from 83 Chicago-area citizens with an average net worth of $14 million. The pool of respondents may be small, but the authors argue that it’s representative.
What they found were stark differences between the very wealthy and the general public on a variety of issues such as spending, health care, retirement, jobs, and income programs.
When asked to identify the most important problem facing the country, 32 percent of the wealthy cited budget deficits or excessive government spending, while only 11 percent cited unemployment or education. “Unmistakably, deficits were a major concern for most of our wealthy respondents,” the authors wrote. Compare that to the Gallup survey, in which the share of the general public citing the deficit as the "most important problem" was generally in the teens throughout 2011. Still, nearly 90 percent of the wealthy cited both deficits and unemployment as “very important” problems.
The two groups also differ greatly on spending priorities. In the table below, the authors laid out the perspectives of each on a variety of federal programs. The wealthy and general public both tend to favor further spending on infrastructure, such as bridges and airports—which President Obama pushed for in his State of the Union address. Both groups favor reductions in economic aid to other nations. They differ greatly, however, on other issues. One of the starkest disparities lies in what the two groups think should be done with Social Security: cuts won out among the wealthy, while the general public wanted to see spending on the program increased.
(Each number in the table below represents the percentage difference between those who would expand a given program and those who would cut it back. A -8, for example, indicates that the share of those for expanding a program was 8 percentage points smaller than the share who called for cutting it.)
A full 58 percent of the wealthy backed cutting domestic programs such as Medicare or education to reduce the deficit. Just 27 percent of the general public said the same in a contemporary CBS survey.
Spending priorities were not the only area where the two groups diverge, though. The wealthy outnumbered the public in their willingness to pay more taxes to reduce the deficit. While contemporary surveys showed 34 percent of the general public was willing to pay more, 65 percent of the wealthy said the same. The wealthy also proved just slightly more accepting of progressive taxation, with 66 percent of the rich saying those with higher incomes should pay more, compared with 61 percent of the public.
Documenting the policy preferences of the wealthy is important because they tend to be a very politically active group, the researchers argue. A full fifth said they had “bundled,” or solicited political donations from others, while 99 percent reported voting in 2008. Forty percent said they had contacted their own senator, 14 percent reported contacting an executive branch official, and 12 percent reported having contacted a White House official.
“The frequency of such close ties to the Chicago-linked Obama administration may be unique to our Chicago-area respondents,” the authors of the study write, “but we see no particular reason why their high frequency of contacts with congressional representatives should be atypical of wealthy Americans elsewhere in the country.”