Poll: Economic Worries Deepen

A CBS News/New York Times poll finds that the economy and jobs continue to be the country's most important concerns, even as the U.S. extends its troop commitment in the Middle East for a possible war with Iraq.

Americans' views of the economy are among the most negative seen in the past ten years.

And when asked to compare how things in general are going in the U.S. today compared to five years ago, 63% say things have gotten worse. Looking ahead five years, four in ten are optimistic, but a third expect things to get worse.

U.S. TODAY vs. FIVE YEARS AGO

Better today:
14%
Worse today:
63
About the same:
21

LOOKING AHEAD FIVE YEARS

Optimistic:
41%
Pessimistic:
32
No Change:
21

Negative views about the state of the country today are affected strongly by views on the economy. About eight in ten of those who think the economy is currently in bad shape think the country is worse today than it was five years ago.

The public would prefer to see the government lower its deficits rather than cut taxes, as most Americans think deficits are bad. In fact, there is little public support for tax cuts, either as a vehicle for stimulating the economy or for their own wallets. Few believe the 2001 tax cut helped them significantly. And as a national priority, tax cuts pale in comparison to spending on programs such as Social Security and Medicare.

Half the public expresses doubt about the President's ability to make the right decisions about the economy -- and his overall approval rating has fallen below 60% for the first time since the September 11 2001 terrorist attacks. His rating on handling foreign policy is also the lowest it has been since that time, at 52%.

BUSH JOB APPROVAL

Overall job:
59%
Handling foreign policy:
52
Handling economy:
44

THE STATE OF THE ECONOMY
Evaluations of the current economy continue the dismal trend noted in a CBS News Poll conducted earlier this month. Only 43% now rate the economy as good, and 55% say it is in bad shape. These ratings are some of the lowest evaluations of the economy since 1993.

RATING THE ECONOMY

Good

Now:
43%
1/7/03:
41
1/02:
52
1/01:
84

Bad

Now:
55%
1/7/03:
57
1.02:
46
1/01:
15

44% think the economy is staying the same, and 39% think it is getting worse. Less than one in five Americans thinks it is improving. Many see the negative economic changes happening during the current Administration. 62% think the economy has gotten worse in just the past two years.

Given these concerns, it isn't surprising that the economy and jobs continue to dominate the public's priorities. 28% cite the economy and jobs as the most important problem for the government to address, followed by 22% who name war with Iraq and 8% who cite terrorism or homeland security.

MOST IMPORTANT ISSUE FOR GOVERNMENT

Economy/jobs:
28%
Iraq/war:
22
Terrorism:
8

And when asked to prioritize among the economy, the situation with Iraq, and the war on terror, by nearly three to one the public prefers the government concentrate on the economy rather than the situation in Iraq or the war on terror. 56% want Congress to concentrate first on the economy, followed by 22% who prefer that government focus on the war on terror and 19% who think Iraq should be the highest concern.

CONGRESS' FIRST PRIORITY: WAR ON TERROR, IRAQ OR ECONOMY?

Now

Economy:
56%
War on terror:
22
Iraq situation:
19

1/7/03

Economy:
46%
War on terror:
25
Iraq situation:
25

That represents a change from just a few weeks ago. While even then the economy ranked as a higher priority than either the war on terror or Iraq, it has become even more pressing now. Then, 46% said the economy should be the top priority.

The public's agenda for domestic issues also puts an economic issue – jobs – first, with 46% saying it should be the top priority. But reforming health care is seen as a close second (named by 36%), while enacting a tax cut is in a faraway third place (14%). Within this context, job creation has become slightly less important in the past few weeks.

CONGRESS' FIRST DOMESTIC PRIORITY SHOULD BE:

Now

Creating jobs:
46%
Reforming health care:
36
Passing a tax cut:
14

1/7/03

Creating jobs:
54%
Reforming health care:
28
Passing a tax cut:
14

THE STATE OF THE BUDGET
A majority of Americans (58%) knows the federal budget is now running at a deficit; that is an increase since one year ago, when 48% thought the government was spending more money than it takes in. But more ominously, 69% think budget deficits are a bad thing.

FEDERAL BUDGET IS:

Now

In deficit:
58%
In surplus:
23
Even:
13
2/02

In deficit:
48%
In surplus:
30
Even:
17

Concern about budget deficits carries over to the state budgets. 54% of Americans think the fiscal crises facing some of the states -- being unable to balance their budgets without raising taxes and cutting services -- is a very serious problem for the nation as a whole, and an additional 39% think it is somewhat serious.

Given the pervasive negative view of budget deficits at both the national and the state level, the public does not give a high priority to tax cuts. When asked whether they would prefer reducing the federal budget deficit or cutting taxes, by a small margin the public opts for reducing the deficit.

WOULD YOU PREFER…?

Reducing budget deficit:
48%
OR
Cutting taxes:
44

Tax cuts also take a back seat to social spending. By a large margin, the public would prefer preserving programs such as Social Security and Medicare over a tax cut.

WOULD YOU PREFER…?

Preserving Soc. Security:
85%
OR
Cutting taxes:
12

Even Republicans are hesitant about supporting tax cuts over other spending alternatives. Although 49% prefer cutting taxes to reducing the deficit, nearly as many -- 43% -- opt for deficit reduction. They strongly prefer preserving Social Security and Medicare over tax cuts.

Furthermore, Americans say their recent experience with a tax cut has had little impact, on them personally and on economic growth. 65% think the tax cuts enacted in 2001 made no difference to the economy one way or the other, and by 56% to 36%, a majority thinks that lowering the budget deficit would be a better way to improve the national economy than enacting a tax cut.

WHICH IS BETTER FOR IMPROVING THE ECONOMY?

Reducing the deficit:
56%
Cutting taxes:
36

Even Republicans, whose party has long championed tax cuts, have mixed views on their effectiveness in stimulating the economy. 49% think lowering the budget deficit is a better way to spur the economy, while 44% think tax cuts are the most effective.

On the personal side, 76% say the 2001 tax cuts made no difference in their own pocketbooks.

DID 2001 TAX CUTS MAKE A DIFFERENCE TO YOU?

Yes

All:
20%
17
$30k-$50k:
25
>50k:
18%

No

All:
76%
79
$30k-$50k:
70
>$50k:
80

Those for whom the 2001 tax cuts made the most impact are in the $30k to $50k middle income range, but even among this group, only 25% say the tax cut made a difference in the amount of money they have.

Regardless of what the President says on the subject, most Americans also expect to pay more, not less, in taxes over the next two years. 60% think that in the next two years their taxes will increase, and 28% think they will stay the same. Only 11% expect a decrease in the taxes they pay.

EXPECT YOUR TAXES WILL:

Increase:
60%
Decrease:
11
Stay the same:
28

Those making over $30k a year are most likely to expect a tax decrease, although majorities of this group still expect their taxes will rise.

One new presidential tax cut proposal -- eliminating the tax that stockholders pay on dividends -- gets less than resounding support in principle. Most Americans believe that stockholders should pay taxes on those dividends; 52% think those dividends should be taxed, and 38% think stockholder should not pay taxes on dividends. Investors' views are more mixed, as are the views of those who receive stock dividends.

Less than one third of Americans say the Bush Administration has a clear plan when it comes to dealing with the economy, and 61% say the Administration is just reacting to events as they occur.

DOES THE BUSH ADMINISTRATION HAVE A CLEAR PLAN FOR ITS ECONOMIC POLICY?

Clear plan:
31%
Reacting to events:
61

THE STATE OF THE PRESIDENT
A week before his scheduled State of the Union speech, President Bush's overall job approval rating stands at 59%, down from 64% at the beginning of this year. His approval rating on foreign policy is 52%, the lowest it has been since the September 11 terrorist attacks. 44% of Americans now approve of his handling of the economy. Majorities of Americans are expressing doubts about the President's priorities for the country, and his ability to make the right economic decisions.

BUSH JOB APPROVAL

Overall

Now:
59%
1/03:
64
1/02:
82

Foreign Policy

Now:
52%
1/03:
56
1/02:
70

Economy

Now:
44 %
1/03:
42
1/02:
56

There are indications that Bush's overall job approval rating is influenced by views on his handling of the economy. Those who disapprove of his economic stewardship tend to disapprove of his job as president.

These numbers are significantly lower compared to one year ago, when Bush's approval ratings were much higher in the wake of September 11th and the war on terrorism. But President Bush's overall job approval is still higher than that of President Clinton's at this point in his presidency – in January 1995, before Clinton's second State of the Union speech, just 42% of Americans approved of his job as president, and 46% disapproved.

PRESIDENTIAL JOB APPROVAL

George W. Bush, Now

Approve:
59
Disapprove:
35
Bill Clinton, 1/95

Approve:
42%
Disapprove:
46

George H.W. Bush, 1/91

Approve:
79%
Disapprove:
16

George W. Bush's approval rating now is lower than the 79% his father got at this point in his term, but President George H. W. Bush delivered his second State of the Union speech shortly after the beginning of the Persian Gulf War, which helped send his approval rating rise from 66% before the war to 84% immediately after the war began.

President Bush has maintained his image as a leader – 53% now view him as being in charge of what goes on in his Administration most of the time. 52% thought so this time last year. 74% of Republicans now say Bush is in charge, while 54% of Democrats think other people are really running the government most of the time.

IS BUSH IN CHARGE OF HIS ADMINISTRATION?

Yes

Now:
53%
1/02:
52
1/01:
38

No
Now:
41
1/02:
42
1/01:
53

But Bush has lost ground in two other areas. With the economy remaining a problem and war with Iraq a possibility, just 45% now think President Bush has the same priorities for the country as they do, down from 59% who said so a year ago. A majority, 52%, now says Bush does not share their priorities. And although two thirds still believe the President cares about them; that is down from 76% who said so last January.

EVALUATING PRESIDENT BUSH

Now

Cares about people like you:
66%
Has same priorities for the country as you do:
45
Cares about blacks:
66
Confident in his economic decisions:
47

One Year Ago

Cares about people like you:
76%
Has same priorities for the country as you do:
59
Cares about blacks:
--
Confident in his economic decisions:
--

Just under half now say they have confidence in Bush's ability to make the right economic decisions. 66% think Bush cares about blacks, but just 38% of blacks agree. Only 4% of African-Americans say Bush cares "a lot" about them. In addition, more now describe Bush as a conservative than did so one year ago. 48% now think of Bush as a conservative, up from 41% who said so last January.

Most Americans see Bush's policies as favoring a group that they just don't identify with -- the rich. 58% say Bush's policies favor the rich; just 36% say they favor all people equally or favor the middle class.

As expected, Republicans give Bush much higher evaluations than Democrats do. Majorities of Republicans have positive assessments of the President on all of these issues. Only 17% of Democrats (and 45% of Independents) trust President Bush to make the right economic decisions; just one in five Democrats say Bush has the right priorities, and 45% say Bush cares about them or black people at least somewhat.

Assessments also vary by race and income level. Just 14% of blacks think Bush has the same priorities for the country as they do (compared with 50% of whites). Only 13% of blacks trust Bush's economic decisions; 54% of whites do. People with higher annual household incomes are more likely than those of low-income levels to think Bush has the right priorities, and that he cares about them.

EVALUATING PRESIDENT BUSH

Whites

Cares about people like you:
71%
Has same priorities for the country as you:
50
Cares about blacks:
71
Confident in his economic decisions:
54

Blacks

Cares about people like you:
44%
Has same priorities for the country as you:
14
Cares about blacks:
38
Confident in his economic decisions:
13

The general outlook for the rest of Bush's presidency remains positive, with 64% saying they feel optimistic about the next two years with Bush as President. While this is consistent with the level of optimism the American public has generally expressed about their presidents, it is down from 75% a year ago, and is back to the same level it was at the beginning of Bush's presidency.

FEEL ABOUT BUSH'S PRESIDENCY

Optimistic

Now:
64%
1/02:
75
1/01:
64

Pessimistic

Now:
31%
1/02:
18
1/01:
28

THE BUSH ADMINISTRATION
When it comes to achieving specific goals, Americans think the Bush Administration has made significant progress in eliminating terror threats from Afghanistan, but they do not think much progress has been made on the domestic front, especially on the issues of creating jobs and prescription drug coverage.

The Bush Administration gets mixed reviews on the progress it has made in improving the economy. Just over half of Americans think the Administration has made at least some progress in this area, but almost as many -- 47% -- think little or no progress has been made. The Administration gets even lower evaluations from the American public on job creation, with six in ten saying the Administration hasn't made much progress in this area.

DOMESTIC POLICY: HOW MUCH PROGRESS HAS THE ADMINISTRATION MADE?

Improving the nation's economy

A lot/Some:
51%
Not much/None:
47

Improving public schools

A lot/some:
48%
Not much/None:
47

Ensuring SS and Medicare are there for the future

A lot/Some:
38%
Not much/None:
54

Creating new jobs

A lot/Some:
35%
Not much/None:
61

Reducing the cost of prescription drugs
A lot/Some:
22%
Not much/None:
63

In addition, many Americans are not satisfied with the progress the Bush Administration has made on programs like prescription drug coverage, Social Security and Medicare. 63% think the Administration has made little or no progress reducing the cost of prescription drugs for the elderly, while less than a quarter say it has made progress on this issue. Views of seniors are even harsher; almost eight in ten say the current Administration has not made progress on lowering the cost of prescription drugs. The Administration fares somewhat better on the solvency of Social Security and Medicare solvent, but still, by 54% to 38%, more Americans say not much or no progress has been made than say progress has been made.

Despite the passage of the "No Child Left Behind" education bill last year, Americans are split about whether the Administration has been able to improve public schools. 48% think a lot or some progress has been made, while 47% think not much or no progress has been made. Parents of children under 18 are more critical of the Administration; 51% say the Administration has made little or no progress, and 45% say they have made at least some progress.

The Bush Administration gets its highest marks on eliminating the threat from terrorists operating from Afghanistan and other countries, with 74% saying the Administration has made a lot or some progress in this area. This is up from September 2002, when 66% said the Administration had made a lot or some progress.

FOREIGN POLICY: HOW MUCH PROGRESS HAS THE ADMINISTRATION MADE…?
Eliminating terrorist threat from other countries

A lot/Some:
74%
Not much/None:
23

Improving U.S. image in the Arab world

A lot/Some:
35%
Not much/None:
60

However, just a third say the Administration has made progress on improving America's image in the Arab world, while 60% say there has been little or no progress. In September 2002, 40% thought the Administration was making at least some progress on improving America's image, while 55% felt little or not progress had been made.

The notion that the Bush Administration is too closely tied to big business has not been dispelled. Nearly two-thirds (64%) of Americans think big business has too much influence on this Administration, while a quarter say the influence is about right. This perception has changed little from January 2002, shortly after the collapse of Enron.

INFLUENCE OF BIG BUSINESS ON THE BUSH ADMINISTRATION

Now

Too much:
64%
Too little:
4
Right amount:
24

1/02

Too much:
61%
Too little:
6
Right amount:
22

Americans, however, do not think the religious right has too much influence on the Administration. 44% say the religious right has the right amount of influence on the Bush Administration, 21% say they have too much, and the same number think the religious right has too little influence on the Administration.

For detailed information on how CBS News conducts public opinion surveys, click here.