Economy

Gov't. Projects Seen as Better for Job Creation Than Tax Cuts

by Jeffrey M. Jones

Public thinks government funding better approach by 50% to 42%

PRINCETON, NJ -- When it comes to creating jobs, Americans are slightly more likely to say that government funding of infrastructure improvements and other projects is a better approach than relying on tax cuts for individuals and businesses, according to a new Gallup Poll.

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The Feb. 6-7 Gallup Poll was conducted as the U.S. Senate neared a vote on a more than $800 billion economic stimulus package compromise, and after the federal government reported the highest unemployment rate in 16 years.

The stimulus package agreement hammered out in the Senate late last week contains much more government spending than tax cuts. Most (if not all) Senate Democrats and a few Republicans are likely to vote for that bill this week. Republicans have argued that economic stimulus legislation should place a greater emphasis on tax cuts than on spending, but Senate Republicans failed in an attempt to pass a much smaller stimulus bill that took that approach last week. However, the current Senate proposal does contain more tax cuts than the stimulus bill passed by the House of Representatives.

Differences among rank-and-file partisans on this issue follow those reflected in the congressional debate. Americans who identify themselves as Republicans are much more likely to view tax cuts as the better approach to creating jobs, while Democrats take the opposing view by nearly the same wide margin. Independents favor increased funding over tax cuts by 50% to 36%.

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Importance of Stimulus Proposals

In addition to assessing the public's general views on job creation, the poll also tested Americans' perceptions of how important it is to include each of eight proposals that are being considered as part of the stimulus bill. While the relative importance of each of these proposals varies, none is viewed as unimportant by the American people.

Of the eight proposals, educational aid tops the list, with 56% of Americans saying it is "one of the most important things to include" and an additional 32% saying it is important to include this in the stimulus bill. Americans are usually quite supportive of measures designed to improve education, which may explain the high level of support for this provision.

In addition to educational aid, a majority also says that tax cuts for individuals and families are one of the most important things to have in the bill.

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Three other key spending proposals -- expanded unemployment benefits, money for infrastructure projects, and money for renewable energy projects -- rank as somewhat lower priorities, but at least 4 in 10 Americans still view each as one of the most important things to include.

The least important provisions are tax cuts for businesses and aid for state and local governments. Indeed, the latest Senate compromise bill has much less money for state and local governments than the House version.

Educational aid appeals to all three party groups -- it is the top-rated proposal in importance among Democrats and independents, and is second-rated among Republicans. Tax cuts for individuals and families are easily Republicans' top priority, and are supported by about the same percentage of Democrats.

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The major party differences center around business tax cuts and certain spending programs. Republicans (42%) are much more likely than Democrats (23%) to view business tax cuts as an important part of the economic stimulus package. On the other hand, Democrats are much more likely than Republicans to assign a high degree of importance to expanded unemployment benefits, infrastructure projects, and renewable energy projects, along with money for education.

Aid for state and local governments -- though desperately needed by sub-national governments facing budget shortfalls -- is not particularly important to any party group.

Implications

To the extent that job creation is a key goal if not the most important goal of the economic stimulus package, the mix of spending and tax cuts in the current economic stimulus bill appears to fit with the preferred approach of the American public. Given a choice, Americans opt for increased funding of government projects over tax cuts by a slim margin.

More broadly, public support for an economic stimulus bill of $800 billion or more has been just above the majority level among Americans, according to recent Gallup polling. While that level of support is hardly overwhelming, 80% of Americans do say it is important to pass an economic stimulus plan, including 51% who say it is very important to do so.

Barack Obama will attempt to bolster public and congressional support for the plan over the next few days by holding public events in Indiana and Florida, and a nationally televised prime-time news conference Monday evening.

Survey Methods

Results are based on telephone interviews with 1,018 national adults, aged 18 and older, conducted Feb. 6-7, 2009, as part of Gallup Poll Daily tracking. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.

Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

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