The recently concluded debate over the nation’s debt ceiling was, without doubt, a messy process with a questionable outcome. But it was far more than that. According to a new analysis by one of the country’s leading pollsters, the standoff dealt a devastating body blow to public confidence in the economy and government that has powerful implications for the 2012 elections.
“The debt ceiling negotiation is an extremely significant event that is profoundly and sharply reshaping views of the economy and the federal government,” Bill McInturff of Public Opinion Strategies wrote in a just-completed analysis. “It has led to a scary erosion in confidence in both, at a time when this steep drop in confidence can be least afforded.”
The battle played out in Washington as a tense confrontation between President Obama and Republicans in Congress. Each side assumed that, with the outcome, the other would bear the brunt of public dissatisfaction. Obama believed he would be rewarded for appearing open to compromise and for being the adult in the room. Republicans thought they would gain by showing greater determination to cut spending.
Instead, both sides lost — badly.
“The perception of how Washington handled the debt ceiling negotiation led to an immediate collapse in confidence in government and all the major players, including President Obama and Republicans in Congress,” McInturff wrote.
McInturff is a partner in a Republican polling firm, and one of the other partners is the pollster for Mitt Romney’s presidential campaign. McInturff and Democrat Peter Hart conduct the regular polls for NBC News and the Wall Street Journal.
McInturff’s analysis is based on polling and focus groups from Public Opinion Strategies and on survey data from others, including The Washington Post. It is not a partisan document. Instead, it is a sobering look at the state of public opinion in the wake of what McInturff describes as one of those rare events — like the Iranian hostage crisis, the invasion of Kuwait by Iraq, 9/11, Hurricane Katrina or the collapse of Lehman Brothers — hat has the potential to dramatically change the political landscape.
“We are entering a new phase of the American political dialogue that has been irrevocably shifted in a way that will prove difficult to predict,” according to McInturff. “Historically, though, this type of deep voter anger, unease and economic pessimism leads to unstable and unpredictable political outcomes.”
When I talked to McInturff about his analysis, he was reluctant to make predictions about how it would affect the 2012 elections.
“I didn’t cast this in a partisan way and say this is all bad just for Democrats,” he said. “You can’t have this kind of implosion in public attitudes and not think everybody in politics is affected.”
Certainly the findings underscore the vulnerabilities for Obama in his bid for reelection, but given the public’s unhappiness and unease, Republican incumbents should not take comfort from the state of public opinion. This kind of instability could lead to unpredictable developments, including the emergence of a third-party candidate next year.
What has happened over the summer comes along with a negative turn in attitudes about the basic pillars of economic life for most Americans: their income, their investments and the value of their homes. Perceptions on each, writes McInturff, “are as weak as they have ever been during these last four difficult years.”
From the results of an August poll by The Post, McInturff's analysis underscores how badly the debt-ceiling debate shook public confidence in Washington, with 78 percent saying they are dissatisfied with the way the political system is working and 73 percent saying they have little or no confidence in Washington’s ability to solve the country’s economic problems. McInturff described that particular finding as “appalling” in its implications.
McInturff also pointed to more grim data, released Tuesday, that reflects the public’s growing pessimism: Consumer confidence plunged last month, as measured by the Michigan Consumer Sentiment Index, dropping almost 16 points from July to 55.7 percent in August. That’s the kind of thing precipitated only by a significant event, such as the Lehman Brothers collapse, McInturff said.
Most troubling for those in power is the fact that this collapse in confidence comes not at the beginning of a deep recession but years into what has proved to be a stubbornly slow recovery. McInturff noted that there are only four previous occasions, dating to 1952, when the consumer sentiment index has fallen below 65 percent: 1974, 1979, 1990 and 2008.
How long has it taken in the past for economic confidence to recover — defined as a reading in the mid-80s?
“The longest previous period was 45 months [after the 1979 decline], which, unfortunately we are going to beat by a mile,” McInturff predicted. “We are at the 40+ month mark and the measure is now sliding back to the lows not seen since the darkest days of 1980.”
For the president, the implications are particularly worrisome. Looking at elections from 1956 through 2008, the average consumer confidence index for incumbents who won reelection is 95.9. For incumbents who were defeated, the average is 78.4. The index was close to that mark earlier this year, but not any longer.
Former president Ronald Reagan suffered through a deep recession and a midterm defeat in 1982. The month before those ’82 midterm elections, the Michigan index stood at 73.4 percent. By August 1983, it had risen to 90.9 percent, and by October 1984, a month before Reagan’s landslide reelection, it was at 96.3 percent. At this point in 1979, when Jimmy Carter was president, the index was at 64.5 percent. The month before he was defeated in 1980, it stood at 62.1 percent.
Obama is starting from a deep hole. But as the broader analysis underscores, the widespread unease over the economy and the disgust with the political system put all incumbents in a tenuous position. The coming months will be critical, both in the way the economy moves and in how politicians respond to the public’s deep dissatisfaction.