The political standoff over raising the federal debt ceiling, now in its fourth month, has brought the country within four weeks of defaulting on its financial obligations. As the impasse has become an exercise in political brinksmanship, both Republicans and Democrats appear to be betting that public opinion is on their side.
They’re both right and both wrong, according to recent public opinion polls.
While the public has strong and sometimes contradictory opinions about the debt ceiling and federal spending, the overwhelming majority of Americans believe the parties should negotiate, compromise, and raise the debt ceiling to avoid a default.
The Standoff
President Joe Biden and House Speaker Kevin McCarthy (R-Calif.) have been at odds over the debt ceiling since January when Treasury Secretary Janet Yellen warned that the nation was close to its statutory borrowing ceiling.The limit, imposed by Congress, restricts the total amount of debt the government can hold at any one time. Since the United States usually operates on a deficit budget, borrowing is needed both to fund ongoing operations and pay interest on the national debt of $31.4 trillion.
When nearing the debt ceiling, Congress usually raises the cap without a fuss. But in recent years, the occasion has been used as an opportunity for the party controlling Congress to extract either spending cuts or spending increases from the other side.
When that occurs, it raises the possibility that the government might have to slow bill payments or miss some altogether. That could take place as soon as June 1, according to Yellen.
McCarthy will not consider raising the ceiling until the president agrees to limit future spending. Biden insists Congress approve a debt-ceiling increase without prior conditions.
Both men, along with other congressional leaders, are set to discuss the matter on May 9. Yet the White House insists the president will not negotiate. He will instead remind Congress of its duty to pay the nation’s bills. At the same time, he is expected to open a separate dialogue on future spending.
Just Fix It
McCarthy said the American people want to see negotiation and compromise. “Even Democrats on the left side of the aisle say the president needs to sit down and negotiate,” he told reporters on April 26. “More than 70 percent of Americans think we should sit down and negotiate.”For his part, Biden maintained that America cannot default on its debts, no matter what, so the ceiling should be lifted immediately.
The American people agree with both.
Some 70 percent of the people, including most Republicans, said they want their representatives to compromise and find solutions to the problem, according to a February poll conducted by NPR, PBS NewsHour, and Marist.
An April poll by Echelon Insights showed that 74 percent of voters, including a majority of Democrats, agreed with the statement that “President Biden should agree to negotiations and try to find common ground around the debt ceiling, including some reductions in government spending.”
Perhaps most telling, 70 percent of respondents said that Congress should raise the debt ceiling if necessary to avoid a default, according to an April poll by CBS.
When the question was presented without mentioning the possibility of default, only 46 percent said the debt ceiling should be raised.
Which should come first, raising the debt ceiling or an agreement on spending cuts? About 58 percent of Americans agree with Biden’s idea that raising the debt ceiling should be handled separately from discussions on spending cuts. That includes 48 percent of Republicans, according to a poll by The Washington Post and ABC News that concluded on May 3.
The consistent finding is that most Americans want negotiation and compromise, not default, regardless of their political affiliation.
Cuts Yes, Mine No
Most Americans, 60 percent, think the government spends too much money, according to a poll conducted by the Associated Press and NORC in March.The percentage of people who think Washington spends too much was highest among Republicans at 88 percent. Some 60 percent of independents thought so, while just 34 percent of Democrats said the government is overspending.
However, when asked to judge the appropriate level of government outlays in specific areas, the same respondents identified only one out of 16 categories in which the government spends too much: assistance to other countries. Over two-thirds of respondents said the level was too high.
For each of the remaining categories, a large majority of respondents said the level of spending is either “too little” or “about right.”
A majority said the government spends too little on education, health care, Social Security, Infrastructure, assistance to the poor, Medicare, border security, assistance for child care, and drug rehabilitation.
A poll conducted by Pew Research in 2019 returned nearly identical findings.
Plenty of Blame
“Defaulting on our debt is not an option,” McCarthy said at the outset of the debt standoff. He has consistently maintained that Republicans will not allow the country to skip a payment. He has said that point of the exercise is to force a discussion on what he calls runaway government spending.In the unlikely event that the standoff is not resolved, sending the country into default, both history and current polling show who will bear the blame for such an event: Republicans and Democrats, in almost equal measure.
If a default does occur, 39 percent of the people would mainly blame Republicans in Congress, and 36 percent would blame Biden. Another 16 percent said they’d blame both equally, according to The Washington Post and ABC News poll.
In the past, that’s exactly what has happened. In the wake of 2011 negotiations on the debt ceiling between President Barack Obama and Republicans in Congress, the approval rating for the Republican party dropped from 41 percent to 33 percent in a single month. Obama’s approval rating dipped to 40 percent, the lowest level of his tenure. President Donald Trump and congressional Democrats also saw their approval levels dinged after a similar standoff in 2019.
History shows that Americans do not like political fights that spill over into the economy.
“But Americans may not penalize the GOP at the ballot box for it,” said Nathaniel Rakich, an elections analyst at FiveThirtyEight. “That’s because the political effects of these crises are short-lived; there’s always another news cycle that replaces it.”
Kick the Can
With the clock ticking on a possible default, the debt ceiling showdown has taken on increased urgency. Noting that time could expire at the end of the month, Yellen wrote to congressional leaders on May 1, “I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible.”While both McCarthy and the White House have refused to consider a short-term increase in the debt ceiling, a growing list of experts say it might be the best option for the time being.
“I think there’s a path forward, a viable political path forward here. And I think the first thing that needs to be done is the debt limit needs to be suspended,” Mark Zandi, chief economist at Moody’s Analytics, told the Senate Budget Committee on May 4.
“There’s no time to get this [negotiation] done before the x-date,” he said. “And I would recommend suspending the limit to the end of the current fiscal year, the end of September.”
Noting the current turmoil in the banking industry, rising interest rates, and the possibility of entering a recession, Desmond Lachman, a senior fellow at the American Enterprise Institute (AEI), offered a similar assessment.
“A sensible start might involve raising the debt ceiling for a few months to give time for substantive negotiations on an economic program that might be in the country’s long-term economic interest,” Lachman wrote in a May 3 op-ed for AEI.
“Such a compromise might represent a start to ending Washington’s current political dysfunction and save the country from an economic and financial market calamity.”
