There's consensus in Washington the federal government deficit must be reduced. But as politicians haggle and battle over how to do it, they should take heed of recent polls suggesting our elected leaders are out of step with the American people, who in turn are confused about the true cause of the deficit.
First, nearly 80% of Americans want a budget compromise rather than a government shutdown, according to a new Bloomberg National Poll, similar to a recent WSJ/NBC poll.
Second, and perhaps more importantly, there's a disconnect between what the polls say Americans want to cut and where the "real" money is. Consider:
- -- Only 20% of respondents to the Bloomberg poll favor cutting Medicare benefits and less than 45% believe cutting Medicare benefits and raising the age for Social Security benefits would have a "large impact" on the deficit. (The WSJ/NBC poll showed less than 25% of Americans support making significant cuts to Social Security or Medicare.)
- -- 72% of respondents says cutting foreign aid will result in "substantial savings" while 75% say the same of pulling troops out of Iraq and Afghanistan. Large majorities back both moves. (A recent study from Republican pollsters at the Tarrance Group had similar findings.)
The problem here is that entitlement programs account for about 40% of the federal budget and are the main drivers of the nation's long-term deficit. Conversely, foreign aid is only about 1% of federal spending and the wars in Iraq and Afghanistan account for less than 5% of President Obama's proposed budget, Bloomberg reports.
In the accompanying video, Dan Gross and I discuss the yawning gap between the public's perception and the reality of what's driving the deficit.
On a related note, a vast majority of Americans (81% in the WSJ poll) support raising taxes on the wealthy to help cut the deficit.
Here too, the politicians are out of step with their constituents: Republicans seem adamantly opposed to raising any taxes and are focused solely on cutting discretionary spending. Meanwhile, scant few Democrats opposed the lame-duck compromise to extend the Bush tax cuts. Certainly, there's no (public) talk of raising taxes on the wealthy in the ongoing budget debate, even if uber-rich Americans like PIMCO's Bill Gross say it's the right thing to do. (See: Bill Gross: "Of Course" the Wealthy Should Pay Higher Taxes, Corporations Too)
Overall, what we have here is a failure by politicians both to communicate with their constituents and lead on this issue vs. pander to big donors and those at either extreme of the political spectrum. And what Dan Gross calls the "fiscal clown show" rolls on.