The Times Poll : Public Favors Freeze as Way to Trim Deficit

Americans are more in favor of a deficit-reduction proposal that is being fashioned by GOP senators that would likely freeze all spending--including defense and Social Security--than the Reagan Administration’s plan to reduce the red ink by deep cuts in social programs, according to the latest Los Angeles Times Poll.

But the margin of approval is a narrow 7 points (46%-39%), indicating that there is no clear consensus within the nation for a way out of the red-ink maze.

In addition, the poll found that the public remains highly skeptical of claims from both the White House and Capitol Hill that taxes will not be raised this year.

72% See Tax Hike

The nationwide survey showed that an overwhelmingly 72% of Americans believe that taxes will go up this year, no matter what deficit-reduction plan is finally adopted. Only 22% said taxes would not go up and 6% said they were unsure.

If taxes have to be raised, the least objectionable would be a hike in the excise taxes on such items as cigarettes and liquor. That is not an unusual finding, because these so-called “sin” taxes are the most discretionary levies that taxpayers face and are often rated in public opinion surveys as the least objectionable taxes.

The next most preferred was an increase in corporate taxes, selected by 27% of respondents to the poll. Only 10% said they would favor raising personal income taxes, potentially among the biggest sources of new federal revenues but politically one of the most difficult to tap.

But by almost 5 to 1, Americans prefer trimming government expenditures to levying higher taxes to bring down the deficit.

Despite this overwhelming preference for spending cuts, however, the poll also found that the public is not in a mood for any serious budget surgery.

The programs most favored for cutting were the arts and college student loans, which together account for only about 0.4% of the total $952-billion budget this fiscal year. The budget for the National Endowment for the Arts is a relatively minuscule $143 million in the current fiscal year, which began Oct. 1, while spending for student loans totals $3.4 billion.

Moreover, those two programs are the only ones out of a list of 10 in the poll that a majority of respondents wanted to cut.

Least favored options for reducing the deficit were cancellation of next year’s cost-of-living raise for Social Security beneficiaries, which could save an estimated $7 billion out of an expected deficit of around $215 billion, and cuts in the $8.5-billion Aid to Families with Dependent Children, one of the government’s largest welfare programs.

Despite the opposition to scrapping next year’s Social Security cost-of-living raise, respondents nevertheless favored the Senate GOP deficit reduction plan, which may well include that provision along with a freeze on defense spending.

The poll, which surveyed a scientific cross section of 1,847 voting-age Americans from Jan. 19-24 by telephone, was conducted at a time when the Administration was hastening to complete its budget plan for the 1986 fiscal year.

The President is scheduled to present his annual budget message to Congress next Monday. That document is expected to propose that a wide array of social programs be either frozen at current spending levels, severely cut back or eliminated outright. The Pentagon budget would be allowed to increase by about 6% after discounting for inflation and next year’s cost-of-living hike for Social Security beneficiaries would remain intact.

Overall, the Administration wants to hold total government expenses other than interest payments on the national debt to around $820 billion--about the same level as in the current fiscal year after interest payments on the national debt are subtracted.

Meanwhile, Senate Republicans have been working on a package of their own to slash the projected federal budget by $50 billion in the next fiscal year through a one-year, across-the-board freeze on all spending, including the Pentagon budget and Social Security cost-of-living increases.

The poll suggests that the deficit has a low priority among the concerns of Americans--and thus Washington lawmakers may not be under any particular public pressure to do something about the red ink.

When asked what they thought posed the most serious threat this year to the nation’s economic recovery, only 8% of respondents selected the deficit--the lowest percentage among the various options presented. The chief threat was higher unemployment, chosen by 32%, followed by a jump in interest rates, selected by 15%.

The deficit was also of least concern when respondents were asked what they thought represented the most serious threat to their personal financial situation. Only 4% chose the deficit, contrasted with 27% who said an increase in inflation and 26% who said higher taxes, the two greatest concerns.

Another indication of public concern about the government’s red ink was the low response it got when those surveyed were asked about news stories to which they had been paying the most attention. The deficit came in second from the bottom with 7%. At the top of the list was the Ethiopian famine with 15%, followed by child molestation stories with 14%. At the bottom was tax reform with 4%.

The poll, conducted by Times poll director I.A. Lewis, has a margin of error of 3 percentage points in either direction.