07/02/2010 04:34 pm ET Updated May 25, 2011

Listening to America Speak(s) on the Budget

On June 26th, a group called America Speaks held a series of day-long "town meetings" across 60 cities, engaging 3,500 people in a discussion about the federal budget and long-term deficits. This effort has been criticized by some -- including Dean Baker and Roger Hickey -- and defended by others -- including Archon Fung -- on HuffPost.

The materials and process were far from perfect, but the results do show some interesting trends. In particular, participants believed that most of the adjustment should be through revenue increases and reductions in defense spending.

As part of the content review process, I provided some feedback on draft documents (my boss, EPI President Lawrence Mishel, was part of the National Advisory Committee). While the background and options documents were not ultimately what I would have written, they did provide valuable context and presented participants with a wide (though incomplete) range of options.

Despite the shortcomings in the materials and process, I do believe that the exercise had merit (keeping in mind that the results should be viewed with caution, since the participants--who sat though a day of budget discussions--are unlikely to be representative of a typical voter).
America Speaks has not yet issued a final report, but a couple things jump out from the preliminary nation-wide results:

  • People realize that the current economy is in poor health, and that there is a role for government to help spur the recovery: 61% of the participants thought that the government should be doing more to strengthen the economy.
  • Participants relied heavily on revenue increases and defense reductions to narrow the budget gap. About three-fifths (59%) of the adjustments that received more than 50% support were on the revenue side of the budget. Three fourths (75%) of the adjustment was either revenue increases or defense reductions. People supported tax increases on the wealthy, on corporations, and on stock transactions. The most popular general revenue option was a 5% surcharge for people with incomes of more than1 million per year. They also supported a carbon tax.
  • On social security, the two options that received majority support included an increase in the retirement age to 69 and to increase the cap on income subject to the payroll tax. Given the savings in these options, 65% of the fiscal adjustment was on the revenue side. [UPDATE: 7/15/10: Due to a reported error in the tabulation software, AmericaSpeaks will correct their initial findings with fewer participants supporting an increase in the retirement age.] (Currently, the social security payroll tax is only levied only on income below a certain cap, currently106,800, with income above that about not subject to the payroll tax.)
  • -- The option to increase in the cap on the payroll tax was modest: increasing the cap so as to cover 90% of earnings economy-wide. Participants were not given the option to go higher or to eliminate the cap altogether. Given the strong support for this option (85%), I would expect strong support for an even greater revenue adjustment. In fact America Speaks reports that many participants provided additional feedback suggested removing the limit altogether.

  • --The option to raise the retirement age to 69 received only a slight majority, 52%. However this result is at odds with other polling on the issue - for example a 2005 poll by the Pew Research Center found that "...there is considerable public opposition to proposals that would raise the retirement age (72% opposed)" A more recent poll by AARP also confirms this opposition with just 33% supporting an increase in the retirement age. The America Speaks results may come from the fact that participants had higher incomes (and likely more education) than the public as a whole, meaning they might work in less physically demanding jobs on average.
  • Cuts to defense spending gained more support than cuts to other items in the budget, with 85% supporting some cuts and 51% hitting the max option of a 15% reduction. Additional feedback indicated many wanted more.
  • Reductions in health spending and other parts of government were more modest. There was less than 50% support for increases greater than 5% in each category. It is important to note that participants were not given specific options in these cases - there was no ability for participants to indicate how they would prefer to achieve these savings. Would they cut education? Highway spending? Farm subsidies? Foreign aid? Increase co-pays? Decrease coverage? We can't say. Thus, as a practical matter, these responses provide very little guidance to policymakers about people's priorities.

Finally, it should be noted that the adjustments that received over 50% support only cover about two-thirds of the $1.2 trillion in costs that participants were asked to save by 2025. America Speaks reports that less than half of the 350 working groups achieved the stated budget target.

The deficit issue is often presented as one in which policymakers lack the will to tackle a difficult issue. This may still be the case, but it is also clear that there is currently no national consensus about the set of measures that need to be taken to fully address the issue. It is clear that much more work needs to be done to develop budget options and to present these to the public; however, it is also clear that there are many options currently on the table that have significant support and that would move us towards long-run sustainability.

[[UPDATE: 7/15/10: Due to a reported error in the tabulation software, AmericaSpeaks is correcting the findings for several of their options. The most notable change from the initial findings is in the corrected numbers for Social Security.]]