Public in Denial About Cost of Fiscal Fix

Even after months of calls for spending and program cuts, public attitudes oppose most changes.


Here's a scary thought. What if the Republicans and Democrats, now snarling and hissing like two fiscal alley cats, are actually closer to agreeing with each other on spending, deficits, and taxes than they are with the public? A lot closer.

The two parties' plans for correcting the nation's structural budget deficits seem light years apart.

[See 7 Ways to Lower Your Medical Expenses.]

The Republican plan, already approved in the House, would starve all non-entitlement spending and sharply cut health spending by Medicaid and Medicare. Medicare, in particular, would cease its current form in 10 years, to be succeeded by a "premium subsidy" program (which Republicans try to maintain is not a voucher program). Taxes would not be raised.

The revised thoughts from the White House would include more cuts than in President Obama's first budget message last January. But the Democrats argue they should be allowed to slowly nurse the country back to financial health without gutting entitlement programs that have become central to the public's actual and perceived well-being. They would raise taxes to help close the gap.

[See How the Budget Deficit Could Lead to Generational Warfare.]

Both parties' approaches would leave us with budget deficits for at least a decade. If you don't like the $14 trillion-plus debt ceiling—the one that must be raised soon to avoid a government default—how would you feel about a $20 trillion ceiling under the Obama approach, or a $17 trillion ceiling under the Republican plan put forth by Wisconsin Rep. Paul Ryan?

Both parties have also acknowledged the need to tackle entitlement programs, particularly Medicare spending. Regardless of who is in the White House after the 2012 elections, spending on Medicare would be reined in. Social Security is likely to be addressed as well, although neither party is eager to take the first step here and test whether the program is still the third rail of American politics. And despite the Republicans insistence on no new taxes, that veneer is showing signs of cracking over time.

The public, on the other hand, agrees with very little of the major parties' responses to our fiscal crisis. Recent polls, particularly the periodic ABC News-Washington Post poll, find the public comfortably residing in the Land of No Consequences: Stop spending but don't cut the major causes of the deficits.

[See What You Need to Know About Social Security Reform.]

The public has not approved of President Obama's handling of the federal budget deficit since April 2009. Its disapproval rate is now at 58 percent—the highest mark since this administration took office.

The disapproval rate for Congressional Democrats is about 60 percent, its highest since 1995. The disapproval rate for Congressional Republicans is even higher, at 63 percent, but at least that's less than many of its high-60 percent readings during the past several years.

In terms of cutting spending on Medicare, 78 percent of the public is opposed. Interestingly, 65 percent of the public also opposes changing the form of Medicare (as approved in the House budget). This is almost unchanged from public sentiment nearly 15 years ago.

For Medicaid cuts, the opposition number drops slightly to 69 percent, and for military spending cuts it drops again, but 56 percent of the public is still opposed to spending cuts. What they're not opposed to is higher taxes on the rich, which 72 percent of Americans would like to see, according to this week's ABC-Washington Post poll.

And the McClatchy-Marist poll, also out this week, reported that nearly 70 percent of the public opposed raising the debt ceiling. And you know that's got to happen, right?

The only good news in this disconnect between the public and political positions is that the political parties have strong incentives to minimize polling-booth wrath by compromising to jointly deliver such unwelcome news to the public. And you know that's got to happen, right?

Twitter: @PhilMoeller