Most Voters Believe Debt Default Would Worsen Economy, Hit Stock Market Hard
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With President Joe Biden set to meet with congressional leaders Tuesday to continue negotiations to raise the federal debt ceiling, at least 7 in 10 voters say they think a default is likely to result in a worsened economy, a substantial decline in the stock market and the country’s loss of its standing as a financial leader internationally.
The new Morning Consult survey also finds that a majority of voters believe a default would be a “major” problem for the U.S. economy, but are less likely to think it would be problematic for them personally.
Voters Think Potential U.S. Debt Default Would Most Likely Worsen the Economy, Cause Stock Market Declines
Voters in sync on the threat a debt default poses to the economy, stocks
- Voters across party lines were largely in agreement on the most likely outcomes of a default: 79% of Democrats and 81% of both Republican and independent voters said the economy would worsen, while 77% of Democrats, 74% of independents and 75% of Republicans would expect declines in the stock market.
- A slim majority of voters (53%) said they would support the use of executive powers by Biden to prevent the country from defaulting on its debt if Congress does not successfully raise the debt ceiling before the X-date.
- When asked who they would blame if the United States were to default on its debt, a 43% plurality of voters said they would blame both the president and Congress equally, while 26% said they would hold Congress responsible and 21% would point fingers at the president.
- When asked to assign blame to political parties, about a third of voters would blame both parties equally for a default, while a nearly equal share said the same for Democrats and a quarter said the same for Republicans. Democrats are getting slightly more blame now than they did in a February Morning Consult survey.
Voters See Debt Default as Major Problem for Broader Economy, Less So for Them Personally
U.S. economy seen as most likely to take a hit if debt ceiling is not resolved
- Seven in 10 voters said they were concerned about the possibility of the federal government defaulting on its debt, including 28% who said they were “very concerned.”
- Voters were most likely to expect a “major” problem for the U.S. economy in the event of a default (71%), followed by the global economy (60%). Just about 2 in 5 voters thought a default would be a major problem for them personally.
Pressure is on Biden, McCarthy to show progress on debt ceiling talks
With the potential “X-date” — when the U.S. government becomes unable to pay its bills — arriving as soon as June 1, lawmakers are facing increased concern from voters and investors worried about the political quagmire that has Republicans holding firm that they will not approve an increase to the federal government’s borrowing limit without trillions in cuts to federal spending.
Treasury Secretary Janet Yellen and Deputy Secretary Wally Adeyemo have both pushed for a clean debt ceiling increase, calling alternatives like pursuing executive action using the 14th amendment “legally questionable.” Adeyemo called the idea of the Treasury minting a $1 trillion platinum coin "creative" but not workable.
The White House and congressional leaders met early last week to try and make progress on the matter, but a second meeting was pushed back until Tuesday to allow aides more time to work behind the scenes, a situation that Yellen painted as a positive sign of progress.
However, the chance of a breakthrough in Tuesday’s talks at the White House may be slim, with House Speaker Kevin McCarthy (R-Calif.) telling reporters on Monday that he still thinks “we’re far apart.”
The May 8-11, 2023, survey was conducted among a representative sample of 1,970 registered voters, with an unweighted margin of error of +/-2 percentage points.
Amanda Jacobson Snyder is a data reporter at Morning Consult covering finance. @AJacobsonSnyder