RUTHFULLY YOURS

If Congress thinks it can once again kick the can down the road when it comes to federal debt and deficits, it might be surprised if it thinks voters really won’t pay much attention. They will, and yes they care about the future danger posed by soaring deficits and debt, the latest I&I/TIPP Poll shows.

Congress’ current debate over how much spending to cut, whether to extend President Donald Trump’s 2017 tax cuts, and whether to increase the current $36 trillion debt ceiling by $4 trillion, will all depend on how voters view those moves – and whether they view them as cynical or good-faith efforts to rein in debts, deficits and spending.

To gauge current public sentiment, the national online I&I/TIPP Poll (which sampled 1,395 adults from May 28 to May 30) asked voters the following question: “How concerned are you about the federal budget deficit, which is projected to stay above $2 trillion yearly?”

If you thought they wouldn’t care much, you would be wrong. Three-fourths said they were either “very concerned” (41%) or “somewhat concerned” (34%). Only 15% professed to being either “not very concerned” (11%) or “not at all concerned” (4%). Just 9% were “not sure.”

For a change, opinions on this topic were almost uniform across the political spectrum: Democrats (76% concerned, 16% not concerned), Republicans (79% concerned, 15% not concerned) and independent/third-party voters (72% concerned, 14% not concerned) were eerily identical in their responses.

Delving further, I&I/TIPP asked: “The 2017 tax cuts are set to expire soon. What should Congress do?” Respondents were given four possible answers: “Make all the tax cuts permanent”; “Keep tax cuts only for middle- and lower-income Americans”; “Let all tax cuts expire to reduce the deficit”; and, again, “not sure.”

This time, answers were more variable. About 28% said they’d make the cuts permanent, while a larger 36% said they’d make the cuts permanent only for middle- and lower-income Americans. Just 13% said they’d eliminate all the 2017 cuts to help reduce the budget red ink.

But on this question, the political consensus breaks down a bit.

Among Dems, 20% say they’d keep all the tax cuts in place, while 45% said they’d only hold tax cuts for middle-income and lower-income earners, not those deemed wealthy, and 14% said they’d let all the tax cuts expire.

Independents weren’t too different, with only 22% saying keep all the tax cuts in place, 38% wanting tax cuts to continue for middle-class and below, and 13% wanting all the tax cuts to go away to shrink the deficit.

Republicans, however, were very different: 42% want all the tax cuts to remain, while 28% said keep them only for the middle-incomes and below, and 13% wanting them to expire.

It should be noted that an unusual share of respondents – 26% – were “not sure” about what should happen among the choices given. But it’s also clear that Dems and independents are more likely than Republicans to support excluding the wealthy from tax reductions.

As a matter of policy, I&I/TIPP asked the segment of voters who wanted to make tax cuts either permanent or provide them for middle- and lower- class if they would still support them when they come to know the price tag: the tax cuts will add $3.5 trillion to the debt over the next 10 years.

Specifically, they were asked: “If making the 2017 tax cuts permanent adds $3.5 trillion to the national debt over 10 years, would you still support keeping them?”

To this, 33% responded “Yes, the tax cuts are worth it, even if they add to the debt,” while a larger 41% answered “Only if paired with spending cuts to offset the cost,” and another 19% said “No, we can’t afford that level of added debt.”

Once again, Republicans led the tax-cut parade, with 43% supporting tax cuts regardless of the fiscal impact, compared to 29% of Democrats and only 23% of indie voters.

The tax cuts plus spending cuts response formed something of a consensus: Democrats (37%), Republicans (43%) and independents (43%) held strongly similar views. And while one in four Democrats and independents argued “we can’t afford” more debt plus tax cuts, only one in 10 Republicans agreed.

Finally, respondents were asked: “To reduce future deficits, which of the following should be the top priority?”

Their answers: 23% said “Cut government spending now”; 24% urged “Raise taxes on higher-income Americans”; 24% pushed for “Do both: cut spending and raise taxes”; 12% backed “Grow the economy through more tax cuts”; and, least of all, only 4% wanted to “Rescind remaining post-COVID emergency spending.”

What to make of all this?

For one, the results demonstrate clearly why Congress has so much trouble cutting deficits, debt and spending: Building political consensus is difficult when there is no majority view to coalesce around.

For another, it shows how U.S. taxpayers and their elected officials will be wrestling with massive deficits, debt and spending for the next decade or more, a legacy of Congress’ $4.5 trillion stimulus and “deficit reduction” response to the COVID virus.

All this spending was premised in large part on “reducing the deficit,” something that in retrospect was a cruel joke.

The economic reasoning for this was two-fold, as economist Sam Louis Taylor noted in a 2022 Richmond Federal Reserve Bank Policy Update.

“The first is that by reducing the deficit, the law will put downward pressure on demand and, thus, be anti-inflationary. The second is that the spending provisions in the bill will lower the cost of certain inflation-driving goods, like energy and health care, over time.”

Of course, none of that came to pass.

With Obamacare still distorting health insurance markets and states now giving free care to millions of illegal immigrants at taxpayers’ expense, health care is more expensive than ever.

Meanwhile, prices for domestic energy remain stubbornly high, thanks in large part to growing reliance on unreliable alternative energy sources and past refusal to take advantage of the U.S.’ plentiful oil and gas resources. High energy prices elevate the cost of everything else.

As for “reducing the deficit,” $2 trillion a year deficits for the next decade and beyond are what await us, unless the government begins cutting spending now. With $2 trillion a year in red ink, our national debt will go up by more than a third from the current $35 trillion level.

But getting binding agreements in Congress, at least ones that really make a difference, is very difficult. Indeed, it’s not easy anywhere. Just look at the current spectacle of Trump and his erstwhile billionaire supporter Elon Musk having a public fight over the budget.

As the I&I/TIPP Poll shows, Americans want to shift directions on the budget. Yes, they want tax cuts. But they also want spending cuts. With a return to solid U.S. economic growth and basic fiscal responsibility, both are possible.

I&I/TIPP publishes timely, unique, and informative data each month on topics of public interest. TIPP’s reputation for polling excellence comes from being the most accurate pollster for the past six presidential elections.

Terry Jones is an editor of Issues & Insights. His four decades of journalism experience include serving as national issues editor, economics editor, and editorial page editor for Investor’s Business Daily.