Last November I wrote a column titled “Serious Talk about Fixing the Budget Deficit.” Everyone likes the idea of fixing the budget deficit, but there is this little matter of actually doing it. Everyone wants to cut government spending, but no one wants whatever is important to them cut.
As I wrote then, “Can you handle the truth? It won’t be pretty. The truth is if we are really serious about getting ourselves out of this economic mess, everybody is going to have to share in the pain.”
Since then, there has been a lot of debate but not much has changed. What’s interesting though is that there have been lots of polls that claim to know what Americans are really thinking and feeling about the federal budget. But what people say and what they want seem to be quite different, much to the frustration of those trying to fix the problem.
Perhaps the biggest problem is the ongoing debate about the role of government. Do you think government is the solution or the problem? Of course, that argument is the cause of the great divide and the subject of much debate going back to the beginning of our country.
So what do the American people want Congress and the White House to do about the federal budget? Poll after poll shows that, when you look at the full picture, Americans are deeply divided about the issue and what to do about it.
In fact, the most consistent finding of statistically significant, nonpartisan national polls about the federal budget is that Americans are remarkably inconsistent. They want the deficit reduced or eliminated but, with very limited exceptions, they don’t want to cut spending or increase taxes to do it.
A recent Reuters poll showed that an incredible 71 percent of respondents thought the federal debt ceiling should not be raised. However, that finding completely contradicts another finding from the same poll, which showed that there was just as little enthusiasm for cutting most types of spending.
Cuts to foreign aid were popular (73 percent supported them) and about half the respondents said the Pentagon budget should be reduced. However, few people wanted Social Security or Medicare touched and fewer than 25 percent favored reductions in education.
Ironically, if you factor in the national debt, which can’t be cut by legislative action or voter preference, and leave untouched the spending that the respondents wanted to preserve, the remaining spending that could be cut isn’t enough to eliminate the deficit or to stop the government from further borrowing. This is despite the fact that almost three-quarters of the respondents said that’s what they want. No wonder we can’t agree on the solution.
A Gallup poll from late January showed a similar lack of interest in cutting almost anything but foreign aid, even though only 16 percent supported raising the debt ceiling without a deficit reduction agreement in place. That followed a Gallup poll in December that showed little support for tax increases on anyone but the wealthy.
A CNN/Opinion Research poll taken at about the same time also found that about 70 percent of respondents wanted the deficit reduced in general, but equal or higher percentages opposed spending reductions in areas that actually could significantly lessen the government’s red ink.
So what does all this prove? It proves what we all knew — that this is not going to be easy. We can’t even agree on what the problem is and everyone’s role, let alone the solution.
Even though the budget is a numbers problem, these deep contradictions clearly show that the budget is not a rational issue for most Americans. It’s an emotional issue, and that’s why policymakers, interest groups and others typically fail to gain much traction in the debate with graphs and charts. Desires, dreams and hopes are more important than statistics.
These emotional responses expose the pitfalls of focusing on spending reductions and tax increases. That approach is based on a negative emotion — fear of what will be lost — instead of emphasizing the positive possibilities of a future when the deficit is no longer a concern. That could be a tough sell.
As far as reducing spending, it’s important to note that we’re beyond the easy, low-hanging fruit. We’re now talking about reducing important programs that people care deeply about. A current proposal for $1.1 trillion in savings over the next 10 years is a nice start but would barely dent deficits that congressional budget analysts say could approach $12 trillion through 2021. The deficit is projected to approach $1.5 trillion this year and will remain above $1 trillion in 2012 under the latest new spending plan.
So now the battle looms over where cuts should come from. For those of you who are in office and representing all of us, do you have the courage to do what is really necessary to fix the problem, even though it will make everyone angry? For the sake of all our futures, I hope so. Thanks for reading.
NICK MASSEY is a financial adviser and owner of Householder Group Financial Advisors in Edmond. Massey can be reached at www.nickmassey.com. Securities offered through Securities Service Network Inc., member FINRA/SIPC.