Only 26 percent say they have full understanding of the cliff's economic consequences: Pew
Can the looming fiscal cliff be avoided? Just over half of Americans doubt that the White House and Congress will work together to reach an agreement by the Dec. 31 deadline, according to a Pew Research Center for the People and the Press and The Washington Post survey released Tuesday.
Fifty-one percent believe that the two sides will not reach an agreement on the automatic spending cuts and tax cuts vs. 38 percent who are pessimistic.
Following the election last Tuesday, the fiscal cliff has dominated the news cycle and emerged as the biggest economic issue facing the country. Fifty-six percent of affluent investors surveyed last month by Millionaire Corner say they understand the concept of the fiscal cliff. Wealth level is a significant factor in grasping this issue. One-third of households with a net worth of less than $100,000, for example, said they understand what people are talking about when the fiscal cliff is being discussed, vs. 72 percent of Millionaires.
As with the Pew survey, our poll revealed a decided lack of confidence that a bipartisan agreement could be reached to avoid the fiscal cliff, which the Congressional Budget Office recently reiterated could plunge the country back into a recession if not averted, Fifty-three percent of affluent investors we surveyed said they do not believe the White House and Congress will reach a solution.
The Pew survey mirrors our findings. Only 26 percent of the 1,000 surveyed adults said they understand the financial consequences of the fiscal cliff. About four-in-ten said they understand the impact of these measures either not too well (23 percent) or not at all well (17 percent).
Of those who said they understand the potential consequences of the fiscal cliff either very well or fairly well are more likely to say that it will have a major impact on the U.S. economy (75 percent) and their own personal finances (48 percent). In comparison, 58 percent who have less of a grasp on the fiscal cliff think it will have major impact on the economy while 38 percent believe it will have a major impact on their personal finances.
Not surprisingly, Pew found a definite partisan divide between Republicans and Democrats in their attitudes toward the fiscal cliff. More than three-quarters (79 percent) of Republicans surveyed said they believe the effect on the economy would be negative vs. 50 percent of Democrats. Similarly, Republicans are more skeptical (66 percent vs. 25 percent) that an agreement would be reached
Should the deadline pass without a solution, the Tax Policy Center estimates that 90 percent of households would be hit with a tax increase averaging about $3,600 next year. The nation’s top 1 percent would see their taxes increase by more than $120,000, while middle-income households would pay about $2,000 more.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.