WASHINGTON – Most Americans think jarring economic problems will erupt if lawmakers fail to increase the government’s borrowing limit. Yet they’re torn over how or even whether to raise it, leaning toward Republican demands that any boost be accompanied by spending cuts.
According to an Associated Press-GfK poll, 53 per cent say that if the debt limit is not extended and the U.S. defaults, the country will face a major economic crisis. An additional 27 per cent say such a crisis would be somewhat likely, while just 17 per cent largely dismiss the prospects of such damage.
Separately, Republican officials said Wednesday that GOP lawmakers may seek a short-term extension of the debt limit, thus avoiding a default as early as next month by the U.S. Treasury while they try to negotiate spending cuts with President Barack Obama over the next few months. “The worst thing for the economy is for this Congress and this administration to do nothing to get our debt and deficits under control,” said Rep. Paul Ryan, the party’s 2012 vice-presidential candidate who is chairman of the House Budget Committee.
The poll’s findings echo many economists’ warnings that failure to raise the debt ceiling and the resulting, unprecedented federal default would risk wounding the world economy because many interest rates are pegged to the trustworthiness of the U.S. to pay its debts. Obama and many Republicans agree with that, though some GOP lawmakers eager to force Obama to accept spending cuts have downplayed a default’s impact.
When asked which political path to follow, 39 per cent of poll respondents support the insistence by House Speaker John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., that deep spending cuts be attached to any measure increasing the debt ceiling. That’s more than the 30 per cent who back Obama’s demand that borrowing authority be raised quickly and not entwined with a bitter fight over trimming the budget.
An additional 21 per cent oppose boosting the debt ceiling at all.
The survey was conducted as the two parties gird for a debt-limit battle that is likely to dominate the next two months in the capital. The fight is sure to underscore partisan differences over how to curb federal deficits that have surpassed $1 trillion for four straight years. Obama insists that besides spending cuts there should be more tax increases on the wealthy, which the GOP opposes.
While saying he will refuse to negotiate on the debt ceiling, Obama has said he will bargain separately on finding ways to reduce the annual federal deficit.
Despite the majority in the survey who fear severe economic problems if the debt limit is not raised, in a separate question only about 3 in 10 supported the general idea of increasing the ceiling. Four in 10 opposed it, with the rest expressing neutral feelings.
Democrats were about twice as likely as Republicans to support boosting the borrowing limit, while Republicans were likelier than Democrats by a similar margin to oppose an increase.
The government reached its $16.4 trillion borrowing limit Dec. 31 but has avoided default by using cash from pension and other funds it administers, money that will eventually be replaced. Treasury Secretary Timothy Geithner has said his ability to use such bookkeeping measures will be exhausted by early March or sooner.
Wayne Wiedrich, 46, an engineering inspector in Williston, N.D., said in a poll follow-up interview that he agrees that failure to boost the debt ceiling would risk severe problems.
“But on the other hand, it’s not doing the economy any good to raise the debt limit, print money and spend money we don’t have. One of these days China will come knocking on our door and say, ‘We own you,'” he said, referring to the country that holds more U.S. debt than any other nation.
Homemaker Sherry Giordano, 59, of Feasterville, Pa., disagreed.
“It has to be done,” she said of raising the borrowing limit. “We shouldn’t risk our reputation or spend money and time arguing about it. We have to pay our debts.”
The survey showed slight shifts in concerns about the economy and federal budget deficits. Eighty-six per cent consider the economy a top issue, down 5 percentage points from last summer, while 76 per cent have the same view on federal deficits, up 7 points since then.
Around one-third expect the economy to worsen over the next year, the highest figure in AP-GfK polling in nearly two years. Less than 1 in 4 think the economy is in good shape, a fairly stable number since last summer.
Despite the slight edge people give the GOP’s debt limit path, the survey showed Obama with some advantages as he begins his second term.
Fifty-four per cent approve of how he is handling his job, a figure that has changed little over the past year. That is more than triple Congress’ 17 per cent approval rating, which edged down 6 percentage points since early December, before the two sides’ “fiscal cliff” fight ended with Republicans largely accepting Obama’s demands to raise taxes on the country’s highest earners.
Democrats also have a slight 41 per cent to 36 per cent advantage over Republicans as the party more trusted to handle the economy.
Both Obama and Congress have fallen in the public’s esteem after their last battle over the debt ceiling.
In AP-GfK polling in June 2011, the president held a 52 per cent approval rating. By August, it had declined to 46 per cent after down-to-the-wire negotiations with Congress. Congressional approval ratings fell even further, from an already weak 21 per cent in June to just 12 per cent after the year’s debt limit standoff finally ended.
When it comes to finding savings to balance the budget, nearly half prefer cutting government services as the GOP wants, 3 in 10 would rather increase taxes and about 1 in 10 would do both. The percentage backing cuts in federal services has dropped 13 percentage points since the spring of 2011, while the number supporting tax cuts has changed little.
The poll also highlighted how public support dwindles when people are asked about specific cuts.
Given four ideas for reducing budget deficits, only one got majority support: charging top earners higher Medicare premiums, backed by 60 per cent. That included roughly even proportions of Democrats and Republicans, and majorities of all income groups in the poll.
Only 30 per cent back slowing the growth of annual Social Security benefit increases, which Obama agreed to accept in failed talks with Boehner on crafting a deficit-reduction compromise during the “fiscal cliff” fight. Just 35 per cent support gradually raising the current Medicare eligibility age of 65, and 41 per cent support defence cuts.
The poll involved landline and cellphone interviews with 1,004 randomly chosen adults and had a margin of sampling error of plus or minus 4 percentage points. It was conducted from Jan. 10 to 14 by GfK Roper Public Affairs and Corporate Communications.
AP news survey specialist Dennis Junius contributed to this report.