CONGRESS

Public Would Accept Tax Hikes in Debt Deal

In Washington, the U.S. Capitol dome is silhouetted as the sun rises Monday, Oct. 15, 2012. 
National Journal
Fawn Johnson
Oct. 16, 2012, 4 p.m.

Voters are more likely to em­brace tax in­creases for house­holds mak­ing $250,000 or more than cuts to Medi­care or oth­er do­mest­ic spend­ing, ac­cord­ing to the latest United Tech­no­lo­gies/Na­tion­al Journ­al Con­gres­sion­al Con­nec­tion Poll. They are also more wor­ried about cuts in en­ti­tle­ment pro­grams than about tax hikes as a part of any deal that poli­cy­makers strike to fend off the se­quester’s $1.2 tril­lion in auto­mat­ic cuts at the start of next year.

The pub­lic’s opin­ions are vir­tu­ally un­changed from sim­il­ar Na­tion­al Journ­al polling one year ago when a con­gres­sion­al su­per com­mit­tee was fa­cing the same di­lemma””make a deal or face auto­mat­ic cuts. The su­per com­mit­tee failed. The cuts are still loom­ing. The only dif­fer­ence between then and now is that the deal-mak­ing is slated to oc­cur after the elec­tion, which the­or­et­ic­ally will shield the ne­go­ti­at­ors from voter blame for at least two years.

Then, as now, just over half of poll re­spond­ents (55 per­cent) said they think that tax rates for fam­il­ies with in­comes above $250,000 should in­crease on Jan. 1 as part of ex­pir­ing Bush tax cuts or that wealth­i­er fam­il­ies should see a de­crease in their item­ized de­duc­tions (58 per­cent). Last year, those fig­ures were 53 per­cent and 55 per­cent, re­spect­ively.

About one-third of the most re­cent poll’s re­spond­ents (36 per­cent) said they are most wor­ried that Medi­care or So­cial Se­cur­ity will be cut as part of a de­fi­cit-re­duc­tion deal, a much high­er per­cent­age than those whose biggest con­cern is that their per­son­al tax rates will go up (24 per­cent). Last year, those fig­ures were a sim­il­ar 38 per­cent and 23 per­cent. Wo­men (42 per­cent) and Afric­an-Amer­ic­ans (43 per­cent) were more likely to be con­cerned about en­ti­tle­ment cuts than men (29 per­cent), whites over­all (36 per­cent), or His­pan­ics (37 per­cent).

Con­cerns about en­ti­tle­ments are sur­pris­ingly even across age groups, in­come cat­egor­ies, and edu­ca­tion­al levels. The per­cent­age of re­spond­ents who are most con­cerned about severe Medi­care and So­cial Se­cur­ity cuts var­ies only a few points between those mak­ing more than $75,000 an­nu­ally (30 per­cent), those mak­ing $30,000 to $75,000 per year (36 per­cent), and those mak­ing be­low $30,000 per year (39 per­cent). On the same ques­tion, the dif­fer­ence between people ages 18 to 50 and those over 50 is only 4 points””34 per­cent to 38 per­cent, re­spect­ively.

Gov­ern­ment spend­ing seems to cause little trep­id­a­tion among the pub­lic. Only 15 per­cent of re­spond­ents are wor­ried that a de­fi­cit deal would al­low too much fed­er­al spend­ing or not meet its tar­get for re­du­cing the fed­er­al debt.

It should come as no sur­prise that Demo­crats (50 per­cent) are  far more likely to worry about Medi­care and So­cial Se­cur­ity cuts than Re­pub­lic­ans (20 per­cent). Re­pub­lic­ans, on the oth­er hand, are far more likely than Demo­crats to worry that a de­fi­cit deal will al­low too much fed­er­al spend­ing, 27 per­cent to 8 per­cent.

Even though the pub­lic sees en­ti­tle­ments as most vul­ner­able in a de­fi­cit deal, there is no clear con­sensus that any single out­come of an agree­ment will cause prob­lems. That is be­cause the loom­ing fisc­al cliff is not a big worry among the pub­lic. NJ‘s find­ings cor­res­pond with oth­er polling in which laypeople and pro­fes­sion­als alike be­lieve that Con­gress is go­ing to fix the prob­lem. Con­sumer con­fid­ence is at its highest level since 2009. The Uni­versity of Michigan/Thom­son Re­u­ters con­sumer sen­ti­ment in­dex jumped from 59.5 in Au­gust 2011 to 78.3 in Septem­ber 2012.

Eco­nom­ists, who are paid to be wor­ry­ing about such things, don’t seem con­cerned. More than half of pro­fes­sion­al eco­nom­ic re­search­ers sur­veyed by the Na­tion­al As­so­ci­ation for Busi­ness Eco­nom­ics (55 per­cent) think that the Bush tax cuts will be ex­ten­ded for all in­come levels, and 77 per­cent pre­dict that auto­mat­ic spend­ing cuts will be “greatly re­duced” by sub­sequent le­gis­la­tion.

The pub­lic, mean­while, ap­pears will­ing to em­brace a mul­ti­fa­ceted ap­proach to de­fi­cit re­duc­tion that com­bines tax hikes and spend­ing cuts. Tax­ing wealthy fam­il­ies is the most pop­u­lar of po­ten­tial items to be in­cluded in a de­fi­cit-re­duc­tion deal, but a healthy minor­ity of re­spond­ents also be­lieve that the pack­age should strictly lim­it how much the fed­er­al gov­ern­ment will spend on Medi­caid and Medi­care (43 per­cent), raise the eli­gib­il­ity age for Medi­care from 65 to 67 (39 per­cent), and freeze spend­ing on do­mest­ic pro­grams such as edu­ca­tion or parks and hous­ing (35 per­cent).

There is also a clear de­sire among the pub­lic to see op­pos­ing parties work to­geth­er to find a solu­tion. Al­most two-thirds of the re­spond­ents (63 per­cent) said ne­go­ti­at­ors should be will­ing to ac­cept things they don’t like as part of a com­prom­ise, while only 26 per­cent said ne­go­ti­at­ors should “stand by their prin­ciples.”

Even more telling, 61 per­cent of re­spond­ents said “all parties”””Pres­id­ent Obama, con­gres­sion­al Re­pub­lic­ans, and con­gres­sion­al Demo­crats””would be equally to blame if Con­gress fails to reach a deal. Far few­er re­spond­ents in­di­vidu­ally singled out Re­pub­lic­ans (18 per­cent), Obama (10 per­cent), or Demo­crats (6 per­cent) as the scape­goats for a pos­sible fail­ure.

The demo­graph­ic groups less likely to spread the blame equally are, in all cases, more likely to blame con­gres­sion­al Re­pub­lic­ans. Among Afric­an-Amer­ic­ans, 45 per­cent said every­one would be to blame if there was no deal, while 28 per­cent said Re­pub­lic­ans would be to blame. Sim­il­arly, 47 per­cent of those over age 65 would put the blame on every­one while 22 per­cent would single out the GOP. The num­bers were sim­il­ar for white male col­lege gradu­ates; 51 per­cent said every­one would to blame and 27 per­cent said it would be the GOP’s fault.

The United Tech­no­lo­gies/Na­tion­al Journ­al Con­gres­sion­al Con­nec­tion Poll, a tele­phone sur­vey of 1,006 adults, was con­duc­ted Oct. 12-14 and has a mar­gin of er­ror of 3.7 per­cent­age points.

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