Poll: California voters expect debt standoff to be solved, fear economic damage if it isn't (2023)


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.


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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.

(Video) GOP debt ceiling politicking could harm veterans Rep. Khanna says

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.

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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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Berkeley IGS/L.A. Times poll results

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(Video) Biden races back to Washington for debt ceiling talks




What is the new U.S. debt ceiling? ›

Debt ceiling suspended until 2025

Currently it is $31.4tn (£25tn). This includes paying for federal employees, the military, Social Security and Medicare, as well as interest on the national debt and tax refunds.

How high is the US debt ceiling? ›

What is the debt ceiling? Created by Congress in 1917, the debt limit, or ceiling, sets the maximum amount of outstanding federal debt the U.S. government can incur. In January 2023, the total national debt and the debt ceiling both stood at $31.4 trillion.

What is the debt ceiling deal? ›

Debt ceiling deal suspends US borrowing limit until 2025, after the next election. This week, US lawmakers will vote on a deal to suspend the nation's borrowing cap until January 2025, meaning debt can grow beyond the ceiling.

What is debt ceiling 2023? ›

$31.4 Trillion debt ceiling limit. Reached on January 19, 2023.

Who owns the most U.S. debt? ›

The Federal Government Has Borrowed Trillions, But Who Owns All that Debt? At the end of 2022, the nation's gross debt had reached nearly $31.4 trillion. Of that amount, about $24.5 trillion, or 78 percent, was debt held by the public — representing cash borrowed from domestic and foreign investors.

When was the last U.S. debt ceiling crisis? ›

In 2011, the U.S. reached a crisis point of near default on public debt. The delay in raising the debt ceiling resulted in the first downgrade in the United States credit rating, a sharp drop in the stock market, and an increase in borrowing costs.

How much debt does the average American hold? ›

Average American household debt statistics

The average American holds a debt balance of $96,371, according to 2021 Experian data, the latest data available.

Why does the US have so much debt? ›

Since the government almost always spends more than it takes in via taxes and other revenue, the national debt continues to rise. To finance federal budget deficits, the U.S. government issues government bonds, known as Treasuries.

Why is the US the most in debt? ›

Louis Fed shows America's debt-to-GDP ratio is about 120 percent, thanks in part to COVID-driven spending in 2020. The ratio has typically spiked at the end of America's wars. It hit 113 percent right after World War II. The modern low was around 30 percent in 1981.

What happens if we don't raise the debt ceiling? ›

If the debt ceiling binds, and the U.S. Treasury does not have the ability to pay its obligations, the negative economic effects would quickly mount and risk triggering a deep recession. The economic effects of such an unprecedented event would surely be negative.

What happens if the US defaults on its debt? ›

U.S. debt, long viewed as ultra-safe

Its debt, long viewed as an ultra-safe asset, is a foundation of global commerce, built on decades of trust in the United States. A default could shatter the $24 trillion market for Treasury debt, cause financial markets to freeze up and ignite an international crisis.

Who does the US owe money to? ›

The US government owes trillions of dollars in debt to foreign entities, including governments, central banks, companies, and individual investors. This debt includes US Treasury bonds and other securities, which are popular as they are considered safe investments.

Does China have more debt than the US? ›

The United States, holding the highest national debt globally, has a total of $31.68 trillion, representing a YoY increase of $1.3 trillion or 4.28%, reaching $30.38 trillion. Therefore, China's national debt has surged almost three times that of the United States in the past 12 months.

How much is China's debt? ›

China: National debt from 2018 to 2028 (in billion U.S. dollars)
CharacteristicNational debt in billion U.S. dollars
7 more rows
Apr 14, 2023

What was the largest debt crisis in history? ›

This was the worst financial and economic disaster of the 20th century. Many believe that the Great Depression was triggered by the Wall Street crash of 1929 and later exacerbated by the poor policy decisions of the U.S. government.

When did the US get in so much debt? ›

Between 1980 and 1990, the debt more than tripled. The debt shrank briefly after the end of the Cold War, but by the end of FY 2008, the gross national debt had reached $10.3 trillion, about 10 times its 1980 level.

Why did the US have so much debt in 1789? ›

Paying for the American Revolutionary War (1775 - 1783) was the start of the country's debt. Some of the founding fathers formed a group and borrowed money from France and the Netherlands to pay for the war.

How many Americans are 100% debt free? ›

Fewer than one quarter of American households live debt-free. Learning ways to tackle debt can help you get a handle on your finances.

What age do most people pay off their mortgage? ›

“Because while previous generations might be footloose and mortgage free by their 50s, increasingly we're saddled with debts as we head into retirement. The group says that the average age people expect to repay their mortgage is 57-and-a-half years.

What is the average credit score in the US? ›

Credit scores are three-digit numbers that show an important piece of your financial history. Credit scores help lenders decide whether to grant you credit. The average credit score in the United States is 698, based on VantageScore® data from February 2021. It's a myth that you only have one credit score.

How is the US the richest country with so much debt? ›

The United States boasts both the world's biggest national debt in terms of dollar amount and its largest economy, which resolves to a debt-to GDP ratio of approximately 128.13%. The United States' government's spending exceeds its income most years, and the US has not had a budget surplus since 2001.

Which country has the highest debt? ›

Japan's debt-to-GDP ratio is the highest in the world due to a prolonged period of economic stagnation and demographic challenges.

Why is US in debt to China? ›

U.S. debt to China comes in the form of U.S. Treasuries, largely due to their safety and stability. Although there are worries about China selling off U.S. debt, which would hamper economic growth, doing so in large amounts poses risks for China as well, making it unlikely to happen.

Is China in a debt crisis? ›

China's debt is nearly 44% of its GDP and its local governments owe nearly $5.14 trillion. With the economic slowdown and collapse of land sales revenue, provinces and local governments in China are facing an embarrassing situation.

What country has more debt than the US? ›

Japan tops the ranking with central government debt of 221 percent of GDP, followed by Greece, Sudan, Eritrea, and Singapore. Not long ago, the U.S. was among the least indebted countries.

Is any country not in debt? ›

The best example can be taken from Hong Kong (it is a one of the debt free countries), whose economy has the least debt to GDP ratio. It is an almost debt free country. It has a well-regulated financial system and large foreign reserves.

What happens if the government shuts down? ›

When there is a government shutdown, federal agencies are required to classify their employees as either “essential” or “non-essential.” The employees classified as “essential” continue to work during the shutdown. However, the employees classified as “non-essential” are put on unpaid furlough.

What events are causing the US to go into debt? ›

Notable recent events triggering large spikes in the debt include the Afghanistan and Iraq Wars, the 2008 Great Recession, and the COVID-19 pandemic.

Has the US ever defaulted? ›

The US briefly entered default in 1979, which the Treasury blamed on an accidental cheque processing issue, but an intentional default would shock the financial system, where more than $500bn in US debt gets traded every day.

How long will it take to pay off the US national debt? ›

To pay back one million dollars, at a rate of one dollar per second, would take you 11.5 days. To pay back one billion dollars, at a rate of one dollar per second, would take you 32 years. To pay back one trillion dollars, at a rate of one dollar per second, would take you 31,688 years.

Is debt inheritable in the US? ›

No, when someone dies owing a debt, the debt does not go away. Generally, the deceased person's estate is responsible for paying any unpaid debts. When a person dies, their assets pass to their estate. If there is no money or property left, then the debt generally will not be paid.

How many times has the debt ceiling been raised? ›

Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents.

How much money does the US owe everyone? ›

Nearly all of that debt – about $31.38 trillion – is subject to the statutory debt limit, leaving just $25 million in unused borrowing capacity. For several years, the nation's debt has been bigger than its gross domestic product, which was $26.13 trillion in the fourth quarter of 2022.

How much money does France owe the United States? ›

Amount of the French Debt
French obligations received by U. S. treasury under Liberty Loan acts$2,997,477,800.00
Bonds received by Secretary of War in payment for surplus war supplies407,341,145.01
(interest on war-surplus bonds has been regularly paid)
TOTAL DEBT$4,137,224,354.57
4 more rows

How much money does the United States really owe? ›

How Did U.S. Debt Get So High?
YearOutstanding DebtYear-Over-Year Increase
8 more rows
Apr 20, 2023

Who does the US owe debt to? ›

The US government owes trillions of dollars in debt to foreign entities, including governments, central banks, companies, and individual investors. This debt includes US Treasury bonds and other securities, which are popular as they are considered safe investments.

What's the current US national debt? ›

What is the U.S. National Debt amount? The current U.S. debt is $31,462,154,854,903 as of May 23, 2023.

How much U.S. debt does China own? ›

Top Foreign Holders of U.S. Debt
RankCountryU.S. Treasury Holdings
1🇯🇵 Japan$1,076B
2🇨🇳 China$867B
3🇬🇧 United Kingdom$655B
4🇧🇪 Belgium$354B
6 more rows
Mar 24, 2023

What country does the US owe the most money to? ›

Foreign governments who have purchased U.S. treasuries include China, Japan, Brazil, Ireland, the U.K. and others. China represents 29 percent of all treasuries issued to other countries, which corresponds to $1.18 trillion. Japan holds the equivalent of $1.03 trillion in treasuries.

How much is US in debt to China? ›

China holds about $1 trillion of U.S. debt, about 3% of all U.S. debt outstanding.

Why is the US in so much debt? ›

Since the government almost always spends more than it takes in via taxes and other revenue, the national debt continues to rise. To finance federal budget deficits, the U.S. government issues government bonds, known as Treasuries.

Who does the US borrow money from? ›

The federal government borrows money from the public by issuing securities—bills, notes, and bonds—through the Treasury. Treasury securities are attractive to investors because they are: Backed by the full faith and credit of the United States government.


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