Poll: California voters expect debt standoff to be solved, fear economic damage if it isn’t

As negotiations between President Biden and House Speaker Kevin McCarthy over the size of the federal budget and an increase in the nation’s debt limit drag into their third week, most California voters expect the two sides to reach a deal and fear the economic consequences if they don’t, a new statewide poll finds.

Voters may be right to expect a deal. Thursday night, the two sides appeared to be nearing an agreement that would limit some government spending in exchange for a two-year increase to the government’s borrowing limit.

The poll by UC Berkeley’s Institute of Governmental Studies, co-sponsored by the Los Angeles Times, finds a sharp partisan divide on whose negotiating position voters support: Democrats mostly side with Biden, Republicans mostly back McCarthy (R-Bakersfield) while the state’s nonpartisan voters split about evenly.

That outcome may seem predictable, but it’s not what the White House had hoped for, and it helps explain the negotiating position Biden has taken.

Democratic leaders have tried over the last several months to convince voters that Republican haggling over the debt limit is outside the limits of normal politics, an exercise in “hostage taking,” as many Democrats have said, and a “manufactured crisis,” as White House Press Secretary Karine Jean-Pierre put it Wednesday.

But the statewide poll — and similar surveys of voters nationally — indicates that argument hasn’t gained much traction beyond Democratic partisans, in part because most voters haven’t paid much attention to the talks or to the arguments from either side.

That reality has pushed Biden into negotiations he had tried to avoid, with two unpleasant options — either a true crisis that could hit as soon as next week or a compromise deal that many Democrats will find distasteful.

Painful compromise or disastrous stalemate

The negotiations are hard because neither party has the leverage to gain a true victory; a compromise will disappoint each party’s base.

Republicans this spring tacitly gave up on winning a major shift in the size of government. They dropped their talk of a plan to balance the federal budget, realizing that the cuts required to do that would be wildly unpopular with voters, even if they appeal to some party activists.

The GOP also abandoned the very unpopular idea of reducing benefits for Social Security or the government’s two giant healthcare programs, Medicare and Medicaid. Those three programs account for nearly half of federal spending. Republicans also want to increase military spending, which accounts for about 15% of the budget. They also have rejected all proposals to reduce the deficit by closing tax loopholes or phasing out some of the Trump administration’s tax cuts.

Instead, the Republicans have focused on cutting back the chunk of federal spending — less than 15% of the total — that goes to domestic programs subject to annual appropriations. They also want to impose new work requirements on some people eligible for federal benefits such as food stamps.

Although the cuts the GOP has demanded are too small to change the government’s need to borrow more money, they’re big enough to severely damage programs dear to Democrats, who spent the last two years expanding programs to combat climate change, make health coverage more affordable and achieve other party priorities.

Progressive activists and Democratic members of Congress, who had hoped to avoid negotiating over the debt ceiling at all, have become increasingly uneasy about the talks, fearing that Biden will yield too much.

On the right, many conservative Republicans have made clear they won’t vote for any deal that compromises the party’s maximum demands.

What’s kept the talks going is that the alternative is potential economic chaos.

Treasury Secretary Janet Yellen says the government will hit its credit limit as early as Thursday, although the precise date is hard to pin down since a big factor is how quickly tax receipts come in.

“It seems almost certain that we will not be able to get past early June,” Yellen said Wednesday at a conference sponsored by the Wall Street Journal.

If Congress fails to increase the limit in time, the government won’t be able to pay all its bills. That could block Social Security checks, military salaries, interest payments owed to bondholders or anything else Washington spends money on.

The government has never defaulted on its obligations. Economists in both parties say that doing so could quickly cause chaos in financial markets and likely tip the nation into a recession. Biden and McCarthy have said they want to avoid that.

California voters agree with the experts that a default would cause harm: 88% say it would be a “serious” problem, with 63% saying the problem would be “very serious.” That view is shared across party lines, the poll found.

But roughly 6 in 10 say they think it “likely” that the two sides will reach an agreement to avoid a default.

Markets so far have largely reflected the view that political leaders will find some way out of their impasse: As the talks have sputtered this week, stock prices have declined, but are still only slightly lower than they were when the negotiations began May 9.

Nationally, recent surveys have found similar results. A CNN poll released Tuesday, for example, found that 71% of Americans believed failing to raise the debt ceiling would cause major problems for the country. It also found that the share of Americans following the talks “closely” was significantly lower than in 2011, during the Obama administration, when the government came within days of a default.

The lack of close attention can also be seen in responses to polls this week that have tried to test the two sides’ talking points — the White House push for a straightforward increase in the debt limit, not tied to spending cuts, versus the Republican insistence that the two subjects be yoked together.

Depending on the precise wording of the questions, the polls by CNN, Monmouth University and Marist College came up with significantly different results. That sort of variability usually happens when voters don’t have deeply held views on a subject, Monmouth poll director Patrick Murray wrote.

“Most Americans don’t have a strong opinion on the best way to raise the ceiling or what that even means in broader terms,” he wrote in an email. That means “partisan identity will drive who gets blamed for any unhappiness that comes out of a deal.”

Many on the left flank of the Democratic Party want Biden to obviate the need for compromise by unilaterally bypassing the debt ceiling. One option they have advocated is to keep borrowing even after the limit is hit and invoke the legal argument that the debt ceiling violates the 14th Amendment’s command that the “validity of the public debt of the United States, authorized by law ... shall not be questioned.”

Biden, however, has made clear that he does not favor that path. Any unilateral move would lead to a court fight that would not be resolved in time to pay the government’s bills, he said in a news conference Sunday.

Although Biden has framed his reluctance as a matter of practicality, it also reflects a political judgment that the centrist voters who supported him in 2020 — and whose support he wants in 2024 — expect him to deliver “the normal politics he promised, and seeking compromise as a principle of how politics is supposed to work,” Marquette University political scientist Julia Azari wrote this week.

White House officials appear to have concluded that they’re more at risk of losing those centrist voters than the more progressive parts of the Democratic coalition, Azari wrote.

The poll provides some evidence of that: Biden’s job approval in California has dropped in recent months as it has nationally, giving up ground he gained last fall, but his approval is highest with those voters who identify themselves as “strongly liberal,” and that group overwhelmingly says they side with Biden’s position in the talks. He’s lost more ground with self-defined moderates.

Statewide, 48% of voters approve of the job Biden is doing, and 46% disapprove, the poll found.

In a state that Biden won by 34 points in 2020, that’s mediocre. But it’s better than voter views of the GOP leadership or of either party in Congress. Only 27% of the state’s voters approve of congressional Republicans’ performance; 68% disapprove. McCarthy’s ratings are very similar — 29% view him favorably, 49% unfavorably and 22% have no opinion. Congressional Democrats get higher marks — 43% approve, and 50% disapprove, the poll found.

The Berkeley IGS Poll was administered online in English and Spanish from May 17 to Monday among 7,465 California registered voters. The poll sample was weighted to match census and voter registration benchmarks. Because of weighting, precise estimates of the margin of error are difficult, but the results are estimated to have a margin of error of 2.5 percentage points in either direction for the full sample.

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