deliberate decisions about the 2012 federal budget

1

Deliberate Decisions About the 2012 Federal Budget

How the American Public Would Reduce Spending and Increase Taxes to Shrink the Budget Deficit

Curtiss Cobb, Norman Nie and Saar Gold

67th Annual Conference of the American Association for Public Opinion Research (AAPOR)May 2012, Orlando, FL.

2

1. The Budget Dilemma

2. The Budget Exercise

3. The Overall Solution

4. The Details

5. Conclusion

Outline

2

3

1. The Dilemma

The American public is more concerned over the state of the economy and issues related to government spending than any other issues.

3

0 10 20 30 40 50 60

Crime/Violence

Other

Environment

State/Local Finances

National Security

Iraq/Afghanistan Wars

Price of Fuel

Education

Healthcare

Federal Deficit

Unemployment

Economy

Most Important 2nd Most Important

4

1. The DilemmaThe 2012 Federal Budget projects:

$2,628 billion in revenue -$3,729 billion in spending$1,101 billion deficit

4

Leaders in Washington DC are unable to reach a compromise to deal with the budget deficit.

Can the American public do what Congress and the President cannot?

5 5

Probability-based ABS recruitmentRecruitment takes place throughout the yearRepresentative of U.S. adultsIncludes:

Adults with no Internet access (24% of adults)• KP provides laptop and free ISP

Cell phone only (30% of adults)Spanish-languageExtensive profile data maintained on each member

• demographics, attitudes, behaviors, health, media usage, etc.

Samples from the panel are assigned to projects• e-mail invitations and a link to the online survey questionnaire

55,000+ members 55,000+ members

66

2. The Budget Exercise

• 1,778 interviews with U.S. general population adults

• Fielded from July 28 through August 9, 2011

• Interactive Budget Exercise- 28 area of federal spending presented in random order

- All 6 personal income tax brackets and the average corporate tax rate

- Randomized whether respondents received spending or taxes first

- Immediate feedback to respondents

- Allowed respondents to change responses as much as they wanted until they reached their preferred solution

7

1. The Budget Exercise

Spending

7

8

2. The Budget Exercise

Revenue

8

99

3. The Overall Solution

The “average” American wants…

Results in a $27 billion surplus for 2012.

*Spending and Revenue do not match total federal spending or revenue due to only asking respondents about a subset of programs and taxes.

1010

3. The Overall Solution

Distribution of Spending Solutions0

50

100

150

200

250

Fre

que

ncy

0 1000 2000 3000 4000

Spend Less than Projected Spend More than Projected

19% wants less than $1 trillion in spending.

3% want to increase spending.

1111

3. The Overall Solution

Without the slash and burn crowd, the “average” American wants to cut spending by 13% and increase revenue through taxes by 10%.

That amounts to $3 in spending reductions for every $1 in new tax revenue.

1212

3. The Overall Solution

There are clear differences across the political spectrum, but every group’s total solution is within $100 billion of each other.

Overall SpendingReduction

OverallRevenueIncrease

RemainingDeficit

DemocratsRepublicansIndependents

$427 B$540 B$469 B

$182 B$ 80 B$163 B

$492 B$481 B$469 B

LiberalsConservativesModerates

$432 B$535 B$420 B

$239 B$ 95 B$129 B

$430 B$471 B$552 B

1313

3. The Overall Solution

Average Desired Tax Rate for High Earners and Corporations

$174,400 to $379,149

(Currently 33%)

$379,150 or More(Currently 35%)

Average Corporate Rate (Currently 35%)

All Americans 33.5% 37.6% 38.3%

DemocratsRepublicansIndependents

34.0%32.6%34.0%

38.9%35.7%38.0%

40.0%35.9%38.6%

LiberalsConservativesModerates

35.4%32.8%33.2%

40.4%36.4%36.9%

41.2%36.5%38.2%

1414

3. The Overall Solution

There is almost no taste for making major cuts to entitlement programs.

Cut by more than 15%

Cut by10-15%Cut by 1-10%

Individual want to raise taxes on those that earn more than they do themselves and on corporations.

1515

3. The Overall Solution

The solution looks simple at this level, however….

The Devil is always in the details.

1616

4. The Details

With few exceptions, agreement on spending is highest among categories the public wants to cut least (on average)…

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Social Security

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Veterans' Benefits

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Medicare

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Justice

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Healthcare

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Regular Military

7% Cut 5% Cut 11% Cut

13% Cut 13% Cut 20% Cut

Highest Agreement

1717

4. The Details

And lowest among categories the public most wants to cut.

Lowest Agreement

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Oil/Gas Subsidies

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Childcare Assistance

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Military Aid

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Science/Medical Research

01

02

03

04

05

06

0

Perc

en

t

0 .5 1 1.5 2

Ag Subsidies0

10

20

30

40

50

60

Perc

en

t0 .5 1 1.5 2

Higher Education

56% Cut 5% Increase 30% Cut

13% Cut 23% Cut 1% Cut

1818

4. The Details

SOCIAL WELFARE (W)Medicare

Social SecurityHealthcare Services

Federal Employee RetirementUnemployment CompensationFood & Nutrition Assistance

Income Assistance

SPECIAL INTEREST (I)State Department

Agricultural SubsidiesChildcare Assistance

Corporate Tax SavingsOil & Gas Subsidies

SECURITY (S)Federal Administration of Justice

Homeland SecurityRegular Military Operations

Iraq/Afghanistan Wars

THE FUTURE (F)TransportationElectrical Grid

Scientific & Medical ResearchEnvironment & Natural Resources

Elementary & Secondary EdHigher Ed

Moreover, there are 4 competing spending priorities, which makes reaching a compromise a multi-dimensional problem with no median vote

1919

4. The Details

Ranked spending priorities show differences along partisan lines

Partisanship

Rank Priority

Lib Dem

Mod/Con Dem

Mod/Lib Ind

ConInd

Mod/LibRep

ConRep

1st F I W S I S

2nd W W F W W I

3rd I S S F S W

4th S F I I F F

W=Social Welfare; S=Security; F=The Future; I=Special Interest

2020

4. The Details

Ranked spending priorities show differences along age and race/ethnic lines.

W=Social Welfare; S=Security; F=The Future; I=Special Interest

Age Groups Race/Ethnicity

Rank Priority

18-34 yrs.

35-44 yrs.

45-54 yrs.

55+ yrs.

White Black Hispanic

1st I F S W S I I

2nd F I W S W W F

3rd S S I I F F S

4th W W F F I S W

21

1. The average solution is $3 in less spending for every $1 in new revenue.

2. Differences in political views seem relatively modest.

3. There is almost no taste for making major cuts to existing domestic entitlement programs.

4. Moreover, there are 4 competing spending priorities, which makes reaching a compromise a multi-dimensional problem with no median vote.

5. Conclusions

21

22

Thank you!

curtiss.cobb@gfk.com

Curtiss L. Cobb III is Director of Survey Methodology at GfK.Norman H. Nie is Professor Emeritus of Political Science at the University of Chicago and Stanford University, and co-founder of Knowledge Networks, now a GfK company.Saar Golde is Data Solutions Architect at Revolution Analytics.