How the Debt Ceiling Bill Divides Americans

The debt ceiling is proving to be a polarizing issue for American voters—but not necessarily because they no longer want to see America pay its bills, but rather because of what it represents in terms of government spending.

An exclusive poll conducted on behalf of Newsweek by Redfield & Wilton Strategies of 1,500 U.S. adults found that half think that the government is spending too much, while the same amount would like to see the debt ceiling raised but with commitments to spending cuts.

Resolving the political differences over government spending could not be more pressing: If the debt ceiling is not raised, the U.S. is expected to reach its limit by the end of the month, and would default on the $31.5 trillion debt it owes. This could have a deep impact on economies around the world and would make it more expensive for America to borrow in the future.

On Monday, Treasury Secretary Janet Yellen wrote to lawmakers, warning that the department's "best estimate" was the government would no longer be able to uphold its loan obligations "as early as June 1" if the limit was not raised, having already exhausted "extraordinary measures" that kept the government ticking over since January.

"The debt limit is akin to [receiving] the bill at a restaurant, and you've already long before placed your order," Christopher Phelps, a professor of American political history and elections at the University of Nottingham, U.K., told Newsweek. "So you have a choice: are you going to pay the bill, or are you going to walk out? The spending's already been done by the time you get to pay the bill."

While House Republicans have already passed a bill that would raise the debt ceiling, it is likely to fester in the Democrat-controlled Senate, as it also requires spending cuts in areas that have been key parts of Joe Biden's agenda. Republican House Speaker Kevin McCarthy said the bill "avoids default and tackles reckless spending."

The president has pushed for a clean bill that would raise the debt limit without compelling the government to slash spending. However, shortly after Yellen's letter, he invited congressional leaders to meet him on May 9, suggesting there may be room for negotiation.

As such, the issue is less about the U.S. government acquiring more debt, and more about a clash of ideologies over how expansive the government should be.

Phelps said this "jousting" was because Democrats tended to believe raising the debt limit "should be done as a matter of course if the debt has been acquired by either party's doings" while Republicans "are willing to use it to compel cuts in expenditures that they believe they can't achieve by normal means."

House Republicans have demanded $4.8 trillion in savings over the next decade, as well as a reversal of some flagship parts of Biden's agenda, including his student loan relief program as well as clean energy tax credits, which were one of the consumer-centered elements of his Inflation Reduction Act. Credits for home energy efficiency measures and electric vehicles were key to the president's vision to move America towards a green economy.

According to Newsweek's poll, conducted on April 30, some 50 percent of respondents said they felt the government was spending too much—with this number being higher (69 percent) for those who had voted for Donald Trump in 2020 and lower (37 percent) for Joe Biden voters. Twenty-five percent of U.S. adults said the government was spending the right amount, while 10 percent thought it wasn't spending enough.

"To a large extent, it is just about the size and the scope of government, which feeds into larger debates about what the appropriate role of the state is in the U.S. economy and in people's lives," Thomas Gift, director of the Center on U.S. Politics at University College London (UCL), said of the debt ceiling debate. "Of course, that splits very cleanly along ideological lines."

Julie Norman, an associate professor of politics at UCL, told Newsweek that the debt ceiling was "often conflated with government spending in general," but that it "is not always politicized." Both she and Phelps noted that Republican lawmakers had raised the limit without issue under recent GOP presidents, but used it as leverage against a Democrat commander-in-chief.

Among the 1,087 respondents who said they were at least slightly familiar with the Republican bill to raise the debt ceiling, 44 percent said they support the proposed legislation, compared with 19 percent who were opposed.

The number in favor grew to 56 percent of Trump voters, but remained a relatively significant 36 percent of Biden voters—suggesting the president's stiff opposition to the bill, and therefore the spending cuts it offers, may lack the support of many who voted him into office, just a week after he declared his candidacy for a second term.

"Over the course of Biden's tenure, more and more Americans have become skeptical of spending on the order of magnitude Biden has proposed," Gift told Newsweek.

He commented that inflation had remained "a persistent and stubborn challenge" for Biden, and while the recent rise has been linked primarily with the waning of the coronavirus pandemic and Russia's invasion of Ukraine, it "can be tied at least partially as a function of increased spending that may contribute to Americans' growing skepticism of big government."

Norman offered a different view of the bill's support among previous Biden voters. "The bill—as much as it includes as many spending cuts—it also, quite importantly, included the raising of the debt ceiling, which many Americans and many Democrats want to see. So I think one could support parts of that bill without supporting all of it," she said. "Even many Democrats, even moderates, do think that sometimes the government is spending too much and maybe has spent a lot under Biden."

Newsweek approached the White House for comment via email on Thursday.

It seems that despite sentiments falling largely along partisan lines, Americans remain stiffly divided on whether raising the debt ceiling should generally also come with commitments to spending cuts. Fifty percent of those asked were in favor of a bill that required limits on government spending, compared to 25 percent who wanted a bill without those commitments.

Some 32 percent of U.S. adults said they support raising the debt ceiling without measures to limit spending, rising to 58 percent among Biden voters.

Gift said that voters tended to respond more positively to spending cuts "in the abstract" as they were naturally "somewhat skeptical of big government," but didn't like to see cuts to specific areas that impacted on them, such as social security or Medicare. In late March, a poll by the Associated Press found six in 10 American adults thought the government was spending too much, but a similar number at the same time favored more funding for healthcare and social security.

All three experts who spoke to Newsweek agreed that the most likely outcome will be that Biden and McCarthy come to an agreement on spending. "Once the Republicans passed that bill, it did put the ball back in Biden's court, and he has since responded with that offer to McCarthy," Norman said.

Gift noted that McCarthy had been able to unite a "very disjointed and splintered" caucus to pass the House bill, but Phelps argued that it remained to be seen whether he could get the "substantial, ultra-right faction" to agree to any negotiated concession. It was only a few months ago that McCarthy was forced through 15 confirmation ballots by his own party.

In the meantime, the clock is ticking, and the financial markets are already starting to feel the jitters. Yields on Treasury bills for early June soared on Tuesday over raised fears of a government default, Bloomberg reported, while portfolio managers were looking to avoid risk. Much of the financial system is built on an underlying assumption that government debt is the safest available bet.

"The precarity that it's already injecting into the markets is significant, and if for some reason the two parties didn't come together, that would be catastrophic for the economy," Gift remarked.

But facing the prospect of impending financial collapse, either party could cave to avoid the backlash defaulting on the government's debt would bring. Gift said Biden "cannot afford for the U.S. to fall off this fiscal cliff, given that he's the incumbent and that he's heading into this re-election cycle."