As the United States Government approaches the point where it must raise its debt limit—also known as the ‘debt ceiling’—or otherwise face an unprecedented, potentially catastrophic financial situation, the administration of President Joe Biden and Congressional Republicans remain at loggerheads over how to proceed.
The Biden Administration wants Congress to pass a ‘clean’ bill to raise the debt ceiling before dealing with government spending separately. Republicans, led by House Speaker Kevin McCarthy, want to link the two issues, insisting Congress will only pass a bill to raise the debt ceiling if government spending cuts are included. In a key victory for the Speaker, the House last week passed a bill which would raise the debt ceiling in exchange for an estimated $4.8 trillion in discretionary spending cuts over the next ten years.
President Biden has since invited Speaker McCarthy and Republican leader in the Senate, Mitch McConnell, to the White House for discussions on 9 May. Meanwhile, the clock is ticking. Treasury Secretary Janet Yellen recently warned that the United States could default as soon as 1 June if no agreement is reached.
Last week, as the back-and-forth between the White House and Capitol Hill continued, we at Redfield & Wilton Strategies asked Americans their views on how to proceed on the debt ceiling.
Their responses overall indicate a preference for the Republicans approach of including spending cuts as part of a bill to increase the debt limit, with the important caveat that they were not asked if they supported specific spending cuts to named Government programs in exchange for raising the debt limit.
On spending, Americans generally agree that—in the abstract—the Government is spending too much. 50% of all voters agree the Government is spending too much, against 25% who say it is spending the right amount and a further 10% who say it spends too little.
There is a wide partisan split on this question. 69% of Trump 2020 voters say the government is spending too much, against about half as many Biden 2020 voters (37%) who hold the same view. A plurality of Biden 2020 voters (38%) instead feel the Government is spending about the right amount.
To be sure, polling has shown that most Americans tend to think the Government is spending too much in general while also thinking the Government is spending too little on specific programs like Social Security, healthcare, and education. Matching the general to the particular will therefore be a challenge—although many of the most popular programs, such as Social Security, are considered part of ‘mandatory’ spending and are therefore already not included in the House bill’s ‘discretionary’ spending cut.
32% of Americans would support—against 31% who would oppose—the administration’s preferred option of a clean debt ceiling increase without including any specific measures to limit spending. 48% of Biden 2020 voters would support such a bill, while the same percentage of Trump 2020 voters would oppose it.
72% of Americans are at least slightly familiar with the alternative, Republican-backed bill which passed the House of Representatives.
Among those who are at least slightly familiar with the bill, 44% support it, while 19% oppose it. A majority of Trump 2020 voters (56%) who are aware of the bill support the Republican-backed legislation, as do a plurality of Biden 2020 voters aware of the bill (36% support vs 27% oppose).
When all respondents are asked which of the House’s debt ceiling bill or the Administration’s proposed clean debt ceiling increase they would prefer, 50% select the House’s bill requiring spending cuts, while 25% would prefer a debt ceiling bill without requirements for spending cuts included.
64% of Trump 2020 voters would prefer a bill with requirements for government spending cuts included, as do 45% of Biden 2020 voters (35% of whom would prefer a ‘clean’ debt ceiling bill).
The US national debt now stands at over $31 trillion, having grown from a little over $5 trillion since the year 2000. Despite ideological differences on government spending and deficits, Presidents Bush, Obama, Trump, and now Biden have all overseen large increases in the national debt. Looking ahead, the Congressional Budget Office currently forecasts that an extra $19 trillion will be added to the national debt in the next decade.
In short, however the current deadlock over the debt ceiling is resolved, Republicans and Democrats must grapple seriously with spending and the national debt in order to take the United States off what the Chairman of the Federal Reserve, Jerome Powell, calls its current “unsustainable fiscal path.”
