Fifty-one percent of respondents believe Obama and GOP lawmakers will not settle on alternatives to nearly across-the-board tax increases and massive spending cuts. (The poll found 38% thought an agreement would be reached and 11% had no opinion.) Those surveyed expressed considerable anxiety about such a failure.
It appears the political ramifications of inaction would harm Republicans more than Democrats. If talks fail to ward off the $500 billion in tax hikes and spending cuts, the poll showed, 53% would be inclined to blame congressional Republicans and 29% would blame Obama. Ten percent said they would blame both sides equally.
Lawmakers and President Obama created the end-of-year deadline for action with their agreement in August 2011 that raised the national debt ceiling. The earlier pact said the automatic cuts and tax increases (which would eliminate tax cuts first put in place under President George W. Bush) would take effect if Washington did not come up with alternatives by the end of 2012.
An impasse has been created by Obama’s insistence on including tax increases for the wealthy in his alternative, while Republicans in the House, in particular, have demanded achieving the budget goals only through cutting programs. Exit polls after last week’s election showed that 60% of voters favored tax increases for those who earn the most.
More than 60% of Americans believe that a failure to compromise would hurt the U.S. economy and about that number feel their personal finances would take a hit. If the two sides can’t compromise, 90% of Americans will see their taxes go up — with the biggest jumps for top income earners.
Economists said that broad loss of disposable income, combined with cuts to defense and other programs, could throw the economy back into recession.