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
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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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