American Public Shows How it Would Cut the Budget Deficit

Public Proposes Federal Budget Dramatically Different Than House or White House
March 3, 2011

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American Public Shows How it Would Cut the Budget Deficit

An innovative study has found that when a representative sample of the American public was presented the federal budget, they proposed changes far different from those the Obama administration or the Republican-led House have proposed.

The biggest difference in spending is that the public favored deep cuts in defense spending, while the administration and the House propose modest increases. However, the public also favored more spending on job training, education, and pollution control than did either the administration or the House. On average the public made a net reduction of $146 billion--far more than either the administration or the House called for.

While there were some partisan differences in the magnitude of spending changes, in two out of three cases average Republicans, Democrats and independents agreed on which items should be cut or increased.

The public also showed readiness to increase taxes by an average of $292 billion--again, far more than either the administration or the House.

"Clearly both the administration and the Republican-led House are out of step with the public's values and priorities in regard to the budget," comments Steven Kull, director of the Program for Public Consultation (PPC), which conducted the study. PPC is a joint program of the Center on Policy Attitudes and the School of Public Policy at the University of Maryland. Unlike in conventional polls, PPC consults with the public by presenting respondents with information on policy issues and a range of options to address them. In this case respondents were presented the discretionary budget, with descriptions of each program, and allowed to make changes.

On average, the public cut defense spending by 18%, reducing it by $109 billion. By contrast, the president's proposal increases defense spending by 4% and the House calls for increasing it 2%. For intelligence agencies the public cut 15%, while the administration says the agencies would grow, though at a slower pace.

The most dramatic differences were for job training and higher education. The public increased job training a whopping 130%, while the House cut it by a stark 47%. The administration nicked it 3%. For higher education, the House cut it 26%, the administration increased it 9% and the public increased it 92%.

Energy and the environment were also major areas of difference. The House bill cuts the Department of Energy's work on renewables and efficiency by 36%, while the administration increases it 44%. The public went even further, increasing it 110%. While the House cuts the EPA's budget by 39% and the administration cuts it by 13%, the public increased spending on pollution control by 17%.

The public cut the space program 17%, while neither the administration nor the House made significant changes. The administration made modest increases to science, as did the public (5%), but the House cut it by 12%.

The public cut spending for foreign aid that is meant to serve strategic purposes. Aid to countries "of strategic concern"--known as the Economic Support Fund--was cut a substantial 23% while military aid was cut 15%. The administration cut the Economic Support Fund 9% while the House cut it 6%, but neither made significant cuts to military aid.

For more altruistic forms of aid, on balance the public made little change--increasing humanitarian aid by 18%, cutting development assistance 14% and leaving spending on global health essentially unchanged. In the president's 2012 proposal, humanitarian assistance funding is cut 8%, while funding for global health gets an increase (11%) and so does development assistance (12%). In the House bill, humanitarian assistance is cut 17%, global health by 6% and development assistance by 18%.

The administration is calling for large scale increases to federal spending in highways (53%), air travel and roads (36%), and mass transit (109%). The House made a deep cut (27%) to mass transit. The public, meanwhile, makes modest cuts to highways (9%) and air travel and roads (7%), but leaves mass transit essentially unchanged.

For this analysis the changes the public made in the budget exercise were compared to the OMB projected budget for 2015, while those the administration made were in its 2012 budget proposal relative to the previous year. Changes by the House were based on the recently-passed changes to spending for 2011. (2011 spending is lower than 2015 projections but the distributions are very similar; thus comparisons of percentage changes are meaningful.)

Besides making changes to spending, respondents were presented a series of options for increasing revenue. On average respondents increased revenues by $292 billion. The largest portion was from income taxes: majorities increased taxes on incomes over $100,000 by 5% or more and increased them by 10% or more for incomes over $500,000. Majorities also increased corporate taxes and other excise taxes.

For the estate tax, a majority (77%) favored reverting at least to the 2009 levels, taxing estates over $3.5 million at a 45% rate. Only 15% of respondents supported the estate tax levels recently passed: taxing estates over $5 million at a 35% rate.

The Obama administration holds to its position that the Bush-era tax cuts for incomes above $250,000 should be allowed to expire, and now proposes this for after 2012. By 2015 this would generate $97.2 billion in revenues. The House leadership has so far not made any proposal to increase tax revenues and has favored making the Bush tax cuts permanent.

The public study was fielded December 18-29 with a sample of 793 respondents (margin of error plus or minus 3.5%). It was conducted using the web-enabled KnowledgePanel®, a probability-based panel designed to be representative of the U.S. population. Initially, participants are chosen scientifically by a random selection of telephone numbers and residential addresses. Persons in selected households are then invited by telephone or by mail to participate in the web-enabled KnowledgePanel®. For those who agree to participate, but do not already have Internet access, Knowledge Networks provides a laptop and ISP connection. More technical information is available http://www.knowledgenetworks.com/ganp/reviewer-info.html.

ENDS

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