Voters Back Tough Steps to Reduce Budget Deficits

By JONATHAN WEISMAN

RICHMOND, Va.—Frustrated voters, fixing on the $1.5 trillion federal deficit as a symbol of Washington's paralysis, appear increasingly willing to take drastic steps to address the red ink.


Leonard Anderson, 56 years old, a Richmond, Va., drug-maker engineer and a Republican, said he would be willing to accept a national sales tax to raise revenues. Kimberly Moore, 46, a Richmond Democrat and bank information-technology analyst, said everyone will have to accept budget cuts. And at 67, Paul DesJardins, a Henrico, Va., Republican, said he would accept higher Medicare co-payments and deductibles.

"As Americans, we're all going to have to cut back and take less," said Lois Profitt, a 58-year-old small-business owner and political independent from Chesterfield, Va.

With the November midterm elections looming, voters appear ahead of Washington in grappling with the tough choices to come, according to national polling and a focus group commissioned by The Wall Street Journal in the bellwether city of Richmond.

More
See the poll questions on the federal deficit
See the full poll results

That is a source of political peril for both Democratic and Republican parties, which are trying to talk about the deficit without addressing the specifics of how they would tackle it. Leaders on both sides of the aisle worry about being attacked if they produce a package of painful spending cuts or tax increases. And to reinforce lawmakers' anxiety, voters remain divided about what ought to be done.

"It's a brutal predicament for politicians because the rhetoric of deficit cutting is enormously popular, but the details are incredibly unpopular," said Matt Bennett, a vice president at the Democratic group Third Way, which has polled extensively on the issue.

For meaningful deficit reduction to happen, Republicans and Democrats likely would have to work together to slash spending or raise taxes. Instead, Republicans are attacking Democrats for planning to allow some Bush-era tax cuts to lapse. Democrats are accusing Republicans of plotting the privatization of Social Security. And neither party has convinced Americans it is serious about the problem.

Republicans are seen as the party most trusted to reduce the deficit by 32%, compared to 24% for Democrats, according to a new Wall Street Journal/NBC News poll. But a plurality of 40% see no difference between the two parties on the issue.

The White House professes to be relatively sanguine about the short-term deficits, half of which stem from collapsing tax receipts and rising spending on programs associated with the recession. The president has largely kicked deficit reduction to a bipartisan commission that will report back in December.

"If Barack Obama wasn't serious about this, he wouldn't have set it up," White House press secretary Robert Gibbs said of the commission. "We're not going to eliminate three gimmicks and a loophole and call it a day."

But the president may run into opposition in his own party. A group of liberal economists argue that deficit cutting now would kill off the struggling recovery and send the deficit soaring higher. And complicating matters for Democrats, some liberal interest groups argue that Social Security is sound and in no need of serious change.

Voters seem more impatient and say they want their political leaders to take a stand. "I wish the politicians would be hard-a—, and be like, 'You know what? It's going to be horrible for the next few years, but you've got to shut up," ' said Jennifer Ciminelli, a 35-year-old political independent in Richmond, Va., and one of 12 Virginians who participated in the Journal's focus group. It included four independents, four Republicans and four Democrats.

Virginia is a new swing state that voted for President Barack Obama in 2008 then elected a Republican governor, Bob McDonnell, the next year. Most of the focus group hailed from the congressional district of House Minority Whip Eric Cantor, a rising force in Republican politics who has made fiscal rectitude as well as tax cutting a mantra. Some came from the district of Rep. Bobby Scott, a liberal Democrat. Just to the west and south is the district of freshman Democratic Rep. Tom Perriello, one of the most embattled incumbents in the country.

Even among such diverse voices, the nation's fiscal problems were a central concern. At $1.47 trillion, the federal deficit this fiscal year exceeds all defense and nondefense spending at Congress's discretion by $110 million. In other words, lawmakers could eliminate the entire military, all federal education, agricultural, housing programs, federal prisons, the Central Intelligence Agency, Federal Bureau of Investigations, Coast Guard and border patrol, and the nation would still be in the red.

Half of the current deficit stems from falling tax revenues and rising spending on programs associated with the recession, such as unemployment insurance and food stamps, along with temporary measures such as the stimulus and the Wall Street bailout. The administration projects the deficit—now at 10% of the economy—will fall to 3.4% of the gross domestic product by 2014 as these programs end and the economy recovers.

But then long-term demographic problems kick in, which in some ways dwarf the short-term deficit spike. With the baby boom generation retiring, the deficit will begin rising again because of rising Social Security, Medicare and Medicaid spending. The accumulated debt held by the public will exceed 77% of the economy within a decade, not including the debt the government owes itself for raiding Social Security taxes for decades.

"The country's going to deteriorate," said Mary Beth Davis, a 27-year-old professional photographer and Democratic-leaning independent from Midlothian, Va. "It already is."


Washington is making a show of tackling the problem. Republicans have started resisting politically inviting bills—such as a recent bill to prevent layoffs of teachers and police officers—in an effort to regain the mantle of fiscal rectitude. And a group of House Democrats last month broke with their leaders to propose unpopular spending cuts that they say are necessary to win the public's trust on the issue, such as cutting agriculture subsidies.

"The deficit plays into people's anxieties," said Rep. Peter Welch (D., Vt.), a founding member of the House's new Spending Cuts and Deficit Reduction Working Group. "They believe all this government spending is making their positions more precarious without helping them personally."

But the leadership of both parties have steadfastly resisted offering solutions. Mr. Cantor, who would likely become House majority leader if his party wins back control, pointed to the experience of his colleague, Rep. Paul Ryan (R., Wis.). Mr. Ryan's detailed "road map" to a balanced budget has been attacked by Democrats who have tried to tie his proposals, such as a voucher system for Medicare, to the GOP leadership.

Mr. Cantor acknowledged a hunger for straight talk on the deficit. But he added, "We have to embark on an incremental approach to rebuild confidence, so we can live up to what people want."

Mr. Ryan has drawn a different conclusion. On Tuesday, he said, he was putting air in his wife's tire in Janesville, Wis., when a constituent asked him about his deficit plan. The voter wasn't taken aback as Mr. Ryan spelled out big cuts in domestic spending. "These things are thought of as such third rails," said Mr. Ryan. "They become a political weapon to be used against you. But people are ready for this stuff. They're ready to hear the truth."

The focus group, however, also showed evidence of the perils most in Washington seek to avoid. Craig Christmas, 38, a Democrat and public-school guidance counselor, said he didn't want to cut education or see his taxes rise. Randy Rowekamp, 61, a retired information-services worker from Midlothian, Va., who describes himself as an independent who leans Republican, railed against Washington profligacy and was reluctant to embrace specific cuts.

"You hurt people. There are people living on Social Security. If you start taking that away or lowering it, you're impacting a person's life," he cautioned. Ms. Davis, the photographer, adamantly opposed raising the eligibility age for Medicare.

"This is a mirror of what Americans think," exclaimed Ms. Moore, the bank analyst, sounding exasperated. "You have an electorate that is impossibly fickle and difficult to please but who cannot articulate exactly what needs to be done."

Such frustrations emerge nationally in the most recent Wall Street Journal/NBC News poll. In it, 74% said it would be acceptable to change Medicare to provide larger subsidies for low-income seniors, while cutting subsidies for the more affluent. Sixty-four percent would accept capping Medicare and Medicaid payments to health-care providers, while 58% backed subjecting incomes over $107,000 to Social Security taxes.

But 57% found cuts to national security and defense weapons systems unacceptable. Slowly raising the retirement age to 70 to reduce Social Security costs was acceptable to only 36% of those polled. Raising the eligibility age for Medicare was even less popular.

"Folks want to cut the deficit, but they say, 'Don't touch my Social Security. Don't touch my Medicare. Don't cut defense spending, and don't raise my taxes,"' said Rep. Gary C. Peters (D, Mich.), another member of the House budget-cutting task force. "This is going to take courage."

Still, veterans of the budget wars see one reason for optimism in the subtle shifts in public opinion. Unlike politicians, most Americans don't seem to place partisan blame on one party or another, so neither party can claim the high ground. "There's no end in sight, and it's both parties," said Dani Saunders, 31, a conservative independent who keeps the books for her husband's Richmond tattoo parlor.

Write to Jonathan Weisman at jonathan.weisman@wsj.com

http://online.wsj.com/article/SB1000142 ... 89976.html