64 Percent Oppose Raising the Debt Ceiling; 25 Percent Say Failing To Do So Will Cause Major Economic Crisis

f058debtceilinga 600x400 64 Percent Oppose Raising the Debt Ceiling; 25 Percent Say Failing To Do So Will Cause Major Economic Crisis

Congress recently suspended the
statutory debt ceiling until late May 2013. Congress did not raise
the debt ceiling to a specified limit, but allowed automatic
increases in the limit by the amount required to fund US government
obligations through approximately May 19th. The
latest Reason-Rupe
poll finds that Americans overwhelmingly oppose an
increase in the debt ceiling 64 to 29 percent. Although Congress
has kicked the can down the road, come May, they will have to
overcome this hurdle of public opposition to raising the debt
ceiling.Running counter to the investor and political classes’ belief,
62 percent of Americans do not believe failing to raise the debt
ceiling would cause a major economic crisis. Only 25 percent
believe a major economic crisis would ensue. Nevertheless,
expectations are nuanced, with 30 percent who suspect failing to
raise the debt ceiling could cause a minor economic downturn while
32 percent think it would not cause serious economic problems or
could even help the economy.Americans less concerned with
the current level of government spending are more likely to support
raising the debt ceiling. For instance among those who believe the
federal government spends the right amount or too little, half want
to raise the debt ceiling. In contrast, among those who believe
federal spending is too high, 71 percent oppose raising the debt
ceiling. Likewise three quarters of Americans who strongly support
cutting government spending to balance the budget also oppose
raising the debt ceiling. Only half agree among Americans who are
less enthusiastic to cut government expenditures.Americans who believe the federal budget deficit is an urgent
problem that must be addressed now rather than when the economy
gets better likely view the debt ceiling as a means to this end,
with 74 percent opposing a debt ceiling increase. Conversely, among
Americans who believe the deficit is a major problem but should be
addressed later, 58 percent support raising the debt ceiling.Intransigence on spending and the debt ceiling is likely drien
by skepticism over government spending efficacy. Opponents of the
debt ceiling increase believe the federal government wastes 50
cents out of every tax dollar it collects; supporters of the debt
ceiling increase think the government wastes 40 cents out of every
dollar.Moreover, only 17 percent of Americans believe that the 39
percent per person increase in federal spending, adjusted for
inflation, since the 1990s improved the quality of life in America.
Among those who believe increased government spending reduced the
quality of life, 77 percent oppose raising the debt ceiling.
Sixty-four percent agree among those who did not perceive much of
any impact. Only those who perceived an increased in quality of
life favor raising the debt ceiling 50 to 39 percent.This demonstrates that opposition to raising the debt ceiling is
highly correlated with concerns over federal spending. In order for
Congress to garner public support for its likely inevitable debt
ceiling increase in May, they will have to demonstrate how Congress
will address spending.In the coming weeks, Congress faces three opportunities in which
it can address the level of government spending. First, on March 1
the $1.2 trillion sequester carried out over the next decade will
go into effect. Congress may find the sequester undesirable enough
to enact other spending cuts, entitlement or tax reform proposals.
Second, by March 27 Congress must authorize new spending to fund
government operations as current stopgap funding measures are
scheduled to expire. To avoid a government shut down, Congress may
be motivated to deal with spending cuts. Third, April 15thlawmakers
must agree to a budget resolution for fiscal year 2014, which can
include a debt ceiling increase. If they fail to reach a
resolution, salaries will be withheld until a resolution is
passed.

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64 Percent Oppose Raising the Debt Ceiling; 25 Percent Say Failing To Do So Will Cause Major Economic Crisis

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