October 1, 2008

The Bad Rap on the Bailout Bill

by Andrew Kohut, President, Pew Research Center

The American public is taking a bad rap for Congress’s failure to pass the bailout bill. Members who voted against the original House bill are said to be responding to strong opposition to the rescue plan from their constituents. While there is little doubt that Congressional representatives are hearing a lot of harsh words from voters back home, that clamor does not reflect broad American public opinion. It is a classic case of the squeaky wheels getting first attention at a time when Washington is in a quandary about what to do.

The most recent polls — those conducted through Monday night — show the public is at best divided over the plan. There is little indication of overwhelming public rejection of the bailout proposal. A new Pew Research Center survey conducted Sept. 27-29 found support for the bailout slipping, but still showed a narrow 45%-38% plurality of the public saying that a government plan to invest or commit billions of dollars to secure financial institutions is the right thing to do.

An ABC/Washington Post survey conducted on Sept 29 found the public evenly split with 45% favoring and 47% opposing a government proposal to use $700 billion to shore up failing financial institutions on Wall Street. The question asked in the survey also pointed out that critics of the plan say that the failing companies don’t deserve a bailout, while proponents say it is necessary to protect the economy.

Neither the Pew nor the ABC/WP question is a perfect measure of opinion — there is never a perfect measure on an issue this complex. But, both findings point to what other polls have found: While the public is divided over what to do, no signs of a firestorm of opposition are evident.

However, members of Congress are correct in detecting the emotion surrounding this bill. The Pew survey revealed that fully six-in-ten Americans (61%) say that they feel angry about the government’s plan, and half (50%) admit they are scared. Many report being confused (43%), while relatively few (29%) describe themselves as optimistic.

With so much emotion and so much at stake, it is not surprising that the angry voices are the loudest. But strong reactions do not mean consensus. And the only consensus that seems to be shaping up is a widespread concern about the problem and a desire that something be done to deal with it.

The depth of that concern shows in the fact that the financial crisis is dominating the public’s consciousness at levels usually only associated with wars and natural disasters. And an attentive American public is certainly voicing many widely shared misgivings about the rescue plan. Pew’s survey finds that majorities worry that it will let those responsible for the crisis off the hook, many fear the proposed bill may not solve the fundamental problems and others think that not enough is being done for homeowners in trouble. Most of these concerns are shared across partisan lines.

Yet despite these concerns, most of the public is still not rejecting the proposed legislation simply because there is such a strong desire to see the government take action. The ABC/Washington Post poll on Monday night found 94% saying the current financial situation is a crisis or serious problem. And 88% of its respondents worried that Congress’s rejection of the plan, which resulted in Monday’s big stock mark loss, could lead to a more severe economic decline in this country.

While some political fallout can be expected from supporting a plan that elicits mixed reactions from many and angry protest from some, judging from national surveys, the downside political risk in not doing something seems much greater.

See Pew’s latest poll findings on the bailout and other issues.