Global investors don't believe U.S. can cut budget deficit substantially without raising taxes, according to new poll
Global investors don't believe the U.S. can cut its huge budget deficit substantially without raising taxes and are not confident the issue will be resolved by the start of the next fiscal year, according to a new poll.
The quarterly Bloomberg Global Poll of investors, traders and analysts found that 64% believed it was not possible to make a major dent in the deficit without increasing taxes, rejecting the assertions of congressional Republicans that massive spending cuts could solve the problem. Only 33% said it was possible.
The Obama administration has said a combination of spending cuts and tax increases on the wealthy are needed to reduce the record deficits.
The poll surveyed 1,263 Bloomberg subscribers worldwide and had a margin of error of 2.8 percentage points.
Just 40% of the respondents said they were confident that President Obama and Republicans would work out a deal to cut the budget deficit by Oct. 1, when the next fiscal year begins. Fifty-seven percent were not confident.
Despite those views, more than seven in 10 in the survey said they were confident a deal would be struck in Washington to raise the limit on U.S. debt.
The White House and lawmakers are in discussions to raise the $14.29-trillion debt ceiling, which will be hit within days. The Treasury Department said it has started taking extraordinary steps to hold off a U.S. default on its securities and other payments until about Aug. 2.
In the broader debate over the soaring U.S. budget deficit, investors around the world were evenly split on whose plan would work better: 39% favored Obama's approach, while 38% supported congressional Republicans.
But respondents in the U.S. leaned heavily toward the Republican plan, with 62% supporting it, compared to 24% for Obama's plan. That's in line with their overall views of the two parties. Of the U.S. respondents, 49% viewed congressional Republicans favorably. Only 14% had a favorable view of congressional Democrats.
-- Jim Puzzanghera
Photo: President Obama meeting with congressional leaders to discuss the deficit last month. From left, House Speaker John Boehner, Obama, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell. Credit: European Press Photo Agency.