By a wide margin, Americans trust Republican lawmakers more than their Democratic counterparts to rein in federal spending. At the same time, most Americans believe that it is possible to balance the budget without raising taxes and cutting entitlement spending.
According to a USA Today/Gallup poll conducted last month, 48 percent of Americans favor Republicans’ handling of the budget battle while 36 percent favor Democrats. A Bloomberg poll published in March showed that most Americans reject the sort of measures that are necessary to shrink the deficit however — the sort of measures that Republicans have proposed.
While tax hikes for millionaires are popular, 61 percent of Americans don’t believe that raising taxes in general is necessary to reduce the deficit.
Republicans argue that spending cuts and stable tax rates, if not tax cuts, are necessary to stir investment and job growth and a little over half of the American public agrees with them.
While the concept of austerity is popular, when it comes to specific cuts, people are less adamant. Public pension and health support programs, which are primarily responsible for long-term spending growth, are dear to people. A Republican plan to effectively privatize Medicare, which finances health care for seniors, for future retirees, remains controversial.
Facing a $1.6 trillion shortfall this year, Republicans argue that the federal government is “broke” and that politicians can no longer afford to squabble over relatively minor, multimillion dollar spending cuts. They threatened a government shutdown earlier this year to extract concessions on the current fiscal year’s spending from the president and his party. The two sides compromised on several tens of billions in cuts to welfare provisions, including financial assistance for the working poor, heating benefits and subsidies for community organizing activities in poor neighborhoods.
Democrats have cast even these measures as potentially “reckless” however and insist that further austerity cannot come at the expense of the most vulnerable of citizens, including retirees and the unemployed. Yet over the next 25 years, government spending on mandatory health-care programs, including Medicare, Medicaid and insurance subsidies, along with Social Security benefits is projected to increase from roughly 10 percent of GDP this year to about 16 percent.
Already, the three largest of entitlement programs account for a third of federal spending. They will likely swallow up half of the budget by the end of this decade.
Starting with their budget proposal for the fiscal year 2012, Republicans supported more than $6 trillion in federal spending cuts over the next ten years which would only barely balance the budget by the end of this decade. President Barack Obama suggested some $4 trillion in deficit reduction in turn but offered no specifics except to say that tax increases should be part of a balanced fiscal approach.
Before the battle over the 2012 budget, which should take effect October 1, can commence, Congress is set to vote on raising the $14.3 trillion federal debt ceiling. The Treasury Department expects that it will exceed its borrowing authority later this spring. A number of fiscally conservative and libertarian lawmakers intend to vote against raising the debt ceiling. Others want to use the vote as leverage to negotiate new spending reductions.