With Washington making little apparent progress in efforts to avoid going over the “fiscal cliff,” public opinion about the situation has changed little over the past three weeks.

The latest national survey by the Pew Research Center for the People & the Press and The Washington Post, conducted Nov. 29-Dec. 2 among 1,003 adults, finds continued pessimism over prospects for a deficit agreement.

Four-in-ten (40%) expect that the president and congressional Republicans will reach a deal by Jan. 1 to prevent automatic tax increases and spending cuts from taking effect; 49% say they will not. If no deal is reached, far more say congressional Republicans would be more to blame (53%) than President Obama (27%). These opinions are virtually unchanged since early November.

Democrats continue to be much more optimistic about prospects for a fiscal cliff compromise than either Republicans or independents. A majority of Democrats (55%) expect Obama and congressional Republicans will reach an agreement before Jan. 1 to prevent the automatic tax increases and spending cuts. Just 37% of independents and 22% of Republicans say an agreement will be reached.

Most Americans feel like they have only a dim understanding of what might happen if the automatic spending cuts and tax increase go into effect. Just 28% say they understand the consequences very well, while 29% understand them fairly well. These impressions also have changed little over the past three weeks.

Nonetheless, the public continues to see dire consequences – both for the nation’s economy and themselves – if the government goes over the fiscal cliff. While more say the nation’s economy (64%) than their own finances (43%) would be greatly affected, roughly six-in-ten say the impact would be negative for both the economy generally (60%) and their own personal finances (61%).

Democrats More Optimistic about Agreement

Republicans and Democrats continue to have starkly different expectations for the negotiations aimed at forestalling the automatic spending cuts and tax increases. Fully 69% of Republicans and 52% of independents say Obama and Republicans will not reach agreement in time to prevent the automatic measures from going into the effect. Yet Democrats remain optimistic – 55% predict an agreement will be reached while 36% do not.

Democrats overwhelmingly say Republicans in Congress would be more to blame if an agreement is not reached (77%). A smaller majority of Republicans (62%) say Obama should bear more of the blame. A third of Republicans (33%) say either that Republicans in Congress would be more to blame (19%) or volunteer than both sides would be equally to blame (14%). Just 16% of Democrats say Obama would be more to blame or that both sides would be equally to blame.

Fewer Young People Understand Fiscal Cliff

Overall, 57% of Americans say they have at least a fairly good understanding of what would happen if automatic spending cuts and tax increases go into effect as scheduled Jan. 1. But just 28% say they understand the consequences very well. There is no major demographic or political group in which a majority says they have a very good understanding of the possible impact of the fiscal changes.

In particular, people with lower family incomes, as well as those with less education and those younger than 30, feel like they have a dim understanding of what might happen if the spending and tax changes kick in. A majority (55%) of those with family incomes of less than $30,000 and 49% of those who have not attended college say they understand the possible implications not too well or not at all well; 54% of Americans younger than 30 say the same.

There are only modest partisan differences in how well people understand the effects of automatic spending cuts and tax increases: 61% of Republicans, 58% of Democrats and 55% of independents say they understand the impact of possible tax and spending changes very or fairly well.

Weekly News Interest

The debate in Washington over the fiscal cliff is the public’s top story this week: 40% paid very close attention to news about the debate over the automatic spending cuts and tax increases that will take effect Jan. 1 unless the president and Congress act.

Only about half as many (21%) followed news about another Washington story very closely – the debate over whether U.N. Ambassador Susan Rice should become secretary of state. Notably, there are only slight partisan differences in interest in the debate over Rice. A quarter of Republicans (25%), 21% of Democrats and 18% of independents followed this story very closely.

Three foreign stories attracted less public interest than news about Susan Rice or the fiscal cliff. Just 15% of Americans say they followed news about violence in Syria very closely; about as many very closely tracked news about political turmoil and protests in Egypt (14%) and the debate at the U.N. over the Palestinian territories (also 14%).

Last week was typical: In the Pew Research Center’s weekly News Interest Index, just 17% said they were following news about economic problems in Europe very closely. Just 3% cited this as their top story of the week. By comparison, 40% tracked U.S. economic news very closely and 20% said they followed it more closely than any other story.

A week earlier, nearly four times as many said the death of football player Junior Seau was their top story than cited Europe’s economic problems (11% vs. 3%).

In part, the public’s lack of interest Europe’s woes is part of a broader indifference to international news. Last year, there were a number of breakthrough foreign stories, from the earthquake and tsunami in Japan to the “Arab spring.” Not this year. Aside from the deadly crash of a cruise ship off the coast of Italy in January, no international story has come close to topping the weekly news interest index.

The public does not believe Europe’s financial crisis presents much of a threat to the U.S. economy. Last December, Pew Research asked about the seriousness of several possible threats to the U.S. economy. Fully 76% said the size of the national debt posed a major threat to U.S. economic well-being. Fewer than half (46%) said Europe’s economic problems represented a major threat. In terms of foreign threats, far more viewed economic competition from China as a major concern than the European crisis.

There were wide partisan differences over several possible economic threats, but not the Europe crisis. Only about half of Republicans and independents (49% each) said Europe’s economic problems represented a major threat to U.S. well-being, as did 43% of Democrats.

In the last four national elections, generational differences have mattered more than they have in decades. According to the exit polls, younger people have voted substantially more Democratic than other age groups in each election since 2004, while older voters have cast more ballots for Republican candidates in each election since 2006.

The latest national polls suggest this pattern may well continue in 2012. Millennial generation voters are inclined to back Barack Obama for reelection by a wide margin in a matchup against Mitt Romney, the Republican candidate who has run the strongest against Obama in many polls. By contrast, Silent generation voters are solidly behind Romney.

In between the youngest and the oldest voters are the Baby Boom generation and Generation X. Both groups are less supportive of Obama than they were in 2008 and are now on the fence with respect to a second term for the president.

One of the largest factors driving the current generation gap is the arrival of diverse and Democratic-oriented Millennials. Shaped by the politics and conditions of the Bill Clinton and George W. Bush presidencies, this group holds liberal attitudes on most social and governmental issues.

In contrast, the Silent generation – whose members reached adulthood between the late 1940s and early 1960s and now make up over 80% of Americans age 65 and older – has held relatively conservative views on social issues and the role of government for most of their lives. Their growing unease, and even anger, about the direction of the country in recent years has moved them further toward the GOP, largely erasing the Democratic Party’s advantage in affiliation.

While the political divides between young and old are deep, there are potential fissures at both ends of the age spectrum. Millennials continue to support Obama at much higher levels than older generations. But Obama’s job ratings have fallen steeply among this group, as well as among older generations, since early 2009. Perhaps more ominously for Obama, Millennials are much less engaged in politics than they were at this stage in the 2008 campaign.

In contrast, Silents – particularly those who affiliate with or lean to the Republican Party – are far more engaged in the presidential campaign than they were at this point in the contest four years ago. While Silents support Romney over Obama by a wide margin, they express highly unfavorable views of both the GOP and the Democratic Party.

Silents prefer the Republican Party on most issues, with Social Security a notable exception. Silents are about evenly divided over whether the Democrats or the Republicans can better handle Social Security. If debate over Social Security and Medicare comes to the forefront, it raises potentially significant cross pressures for Silent generation voters, who rank Social Security among the top issues affecting their 2012 vote.

Growing racial and ethnic diversity, which is concentrated among younger generations, has benefited Democrats. Race and ethnicity are strongly associated with views about government, and in no small part account for some of the greater liberalism of the younger age groups and greater conservatism of older groups.

The polling finds that older generations – Boomers and especially Silents – do not fully embrace diversity. Fewer in these groups see the increasing populations of Latinos and Asians, as well as more racial intermarriage, as changes for the better. For many Silents in particular, Obama himself may represent an unwelcome indicator of the way the face of America has changed. Feelings of “unease” with Obama, along with higher levels of anger, are the emotions that most differentiate the attitudes of Silents from those of the youngest generation.

The nation’s ongoing economic difficulties have affected all generations. But Boomers and Gen Xers are far more likely than either Silents or Millennials to have little or no confidence they will have enough money to finance their retirement. And two-thirds of Boomers ages 50 to 61 who are still working expect to delay retirement because of current economic conditions.

These are the principal findings from two major national surveys exploring generational differences in political attitudes conducted by the Pew Research Center for the People & the Press (Sept. 22-Oct. 4) and the Pew Research Center’s Social & Demographic Trends project (Sept. 1-15). Together, these surveys interviewed 4,413 adults. They have been supplemented with data from other polling over the course of the year and analyses of census data by Pew Social & Demographic Trends.

The study provides a detailed look at the current generational dynamics of American politics. Why are Silent generation voters so angry? How have the political leanings of Baby Boomers evolved? Is the Reagan-era Generation X moving closer to the Democratic column? Will Millennials be as engaged and enthused about Obama as they were in 2008? The answers lie in understanding the broad political, social and economic changes of the past decades and how they have shaped the political leanings of these generations over time.

A Closer Look at … Older Americans

The vast majority of Americans who are 65 and older are members of the Silent generation (ages 66 to 83). They came of age in the Truman, Eisenhower and Kennedy years. Silents favored the Democrats at times during the 1990s, but in recent elections have strongly supported the Republicans. While they aligned more with the Democrats in the 1990s, they have become much more Republican in recent years. The Silent generation “replaced” the Greatest generation, who were more reliable Democratic voters when they constituted the bulk of the senior vote.

Silents increasingly call themselves conservative and they hold the most consistently conservative views about government, social issues and America’s place in the world. Unlike other generations that in recent years have become more supportive of smaller government, they have held conservative views about government for years.

Today, an overwhelming majority of Silents are either angry or frustrated with government. They are the generation that is most strongly disapproving of Barack Obama, for whom a majority did not vote. Silents also are the most politically energized generation, as they demonstrated in the 2010 midterms.

More often than the younger generations, Silents take the American exceptionalist view that the United States is the greatest nation in the world. But fewer older people than young people think that “America’s best days are ahead of us.”

The political discontent of the Silent generation is not economically based. A greater proportion of Silents than younger people say they are financially satisfied, and Silents are less likely to say they often do not have enough money to make ends meet.

Race is a factor in their political attitudes. Silents are the whitest of the generations and are the least accepting of the new face of America. Compared with younger generations, relatively few Silents see racial intermarriage and the growing population of immigrants as changes for the better.

As was the case in 2008, racial attitudes are associated with views of Obama and voting intentions. And while there is racial intolerance in all generations, it is more prevalent among older than younger age groups.

While Silent generation voters say they are solidly behind Obama’s Republican challengers, there are some signs of potential opportunity for the Democrats. Silents cite Social Security as often as they name jobs as their top voting issue. And while seniors tend to favor the Republican Party on most issues, they are as likely to favor the Democrats as Republicans on Social Security.

Young People

Millennials, who are 18 to 30, have voted more Democratic than older voters in the last four national elections. They came of age in the Clinton and Bush eras, and hold liberal attitudes on most social and governmental issues, as well as America’s approach to foreign policy.

Just as members of the Silent generation are long-term backers of smaller government, Millennials, at least so far, hold “baked in” support for a more activist government.

Millennials have come of age professing an allegiance to the Democratic Party and profoundly little identification with the GOP. Today, half of Millennials (50%) think of themselves as Democrats or Democratic-leaning independents while just 36% affiliate with or lean toward the GOP.

Although they back Barack Obama for reelection by a wide margin in matchups against both Mitt Romney and Rick Perry, just 49% approve of his job performance, down 24 points since February 2009.

Millennials are a racially and ethnically diverse generation. Only 59% of Millennials are white non-Hispanic. They are well acquainted with changing face of America and overwhelmingly think these changes are good for the country.

The racial gap also helps explain the greater liberalism of Millennials when compared with older generations. The racial factor, however, mutes rather than explains away the ideological and partisan gaps between Millennials and older voters. For example, while 57% of all Millennials favor a bigger government with more services, just 44% of white Millennials do. But only about a quarter of whites in older generations (27%) support an activist government.

Similarly, while 61% of all Millennials back Obama in a matchup against Romney, only 49% of white Millennials do. But this compares to 37% of older whites who back the president.

For more on Millennials, see Millennials: Confident. Connected. Open to Change, Feb. 24, 2010.

Middle-Aged Americans

Baby Boomers (ages 47 to 65) are the largest generation. They came of age under presidents Johnson, Nixon, Ford, Carter and Reagan.
Boomers had very little allegiance to the GOP during the 1960s and 70s, but were increasingly drawn to the Republican Party starting in the 1980s. Since then, they have tilted to the Democratic Party.

Historically, there has been an age gap within the Baby Boom generation. Older Boomers, who cast their first ballots in the Nixon elections of 1968 and 1972, have voted more Democratic than have younger Boomers who came of age under Ford, Carter and Reagan. In 2008, for example, Obama performed better among older Boomers (currently 56 to 65) than younger Boomers (47 to 55).

Boomers supported Republican candidates in 2010. Currently, they are almost as disillusioned with Obama as are Silents, yet are divided in a matchup between Obama and Romney.

In recent years, more Boomers have come to call themselves conservatives. A majority of Boomers now favors a smaller government that provides fewer services. When they were in their 20s and 3os, Boomers were more supportive of big government. Today, almost as many Boomers as Silents say they are angry with government.

Boomers’ current attitudes bear little imprint from coming of age in an era of great social change. On most social issues, their opinions generally fall between the Silents and the younger age cohorts. And many Boomers express reservations about the changing face of America.

Like younger generations, many Boomers say they are dissatisfied with their financial situation and their anxieties about retirement have increased. In a survey conducted last year, a majority of Boomers (54%) said they were in worse shape financially than they were before the recession. Today, 38% say they are not confident that they will have enough income and assets to last through their retirement years.

Like other generations, Boomers oppose cutting entitlement benefits in order to reduce the budget deficit. They are also part of a multi-generational majority that supports reducing Social Security and Medicare benefits for seniors with higher incomes. However, unlike Silents, Boomers oppose raising the eligibility age for Social Security and Medicare.

Generation X, ages 31 to 46, is the in-between generation. They represent the dividing line on many issues between young and old, but they are not as Democratic and liberal as the younger Millennial generation.

Gen Xers mostly came of age politically in the Reagan, George H.W. Bush and Clinton years. In the 1990s, they divided their loyalties between the parties. In 2000, they split their votes between George W. Bush and Al Gore; they narrowly supported Bush in 2004 and favored Obama by clear margin in 2008.

Gen Xers are less supportive of larger government than they once were. And along with other generations, their views of Obama have become more negative. Gen Xers supported GOP candidates by a small margin in 2010. Currently, as many Gen Xers favor Romney as Obama.

On a range of social issues Gen Xers take a more liberal position than do older voters. Gen Xers are more likely than both Boomers and Silents to favor gay marriage and marijuana legalization, and Gen Xers are far more comfortable with the social diversity of 21st century America.

As with Millennials and Boomers, jobs are the number one voting issue for Gen Xers. And they are increasingly anxious over their financial futures. Fully 46% say they are not confident that they will have enough income and assets to last through their retirement years – the highest percentage in any generation.

Entitlements: Agreement on Principles, Not Policies

The poll finds a fair amount generational agreement on entitlement issues. Majorities across generations say that the federal government does too little for older people. And there is broad agreement that it is more important to maintain current retirement benefits than to reduce the budget deficit, though that view is more widely shared among older than younger generations.

But wide generation gaps exist with respect to a number of proposed reforms to the retirement programs. Silents are lukewarm toward allowing younger workers to invest their Social Security taxes in private accounts and using their Medicare benefits to purchase private insurance. Millennials, in particular, enthusiastically embrace these proposed changes.

Moreover, Silents are more supportive than are younger generations of gradually raising the retirement age for receiving Social Security and Medicare benefits. Roughly half of Silents favor raising the retirement age for these programs; no more than four-in-ten in younger generations agree.

Generational Voting in Red and Blue

One way to look at the political leanings of generations is to sort people by the political environment when they became politically engaged. For example, not so long ago, voters 65 and older were predominantly members of the Greatest generation, most of whom came of age during FDR’s presidency and were fairly reliable supporters of Democrats even into their later years.

As recently as 2004, members of the Greatest generation supported John Kerry by a greater margin than did all voters in that election.

As the Greatest generation has mostly passed from the scene, members of the Silent generation – most of whom came of age politically during the Truman and Eisenhower presidencies – have come to make up an increasing share of voters 65 and older. They have long voted less Democratic than the Greatest generation; in both 2008 and 2010, both Truman- and Eisenhower-era Silents voted more Republican than average.

The Baby Boom is a long generation, spanning many presidencies. The oldest, who turned 18 when LBJ was president, have mostly voted with the national electorate in recent years, though they voted more Republican than average in 2008. Those Boomers who came of age when Nixon was president retained a Democratic leaning, although they have voted with the overall electorate since 2006. The youngest Boomers, who mostly came of age in the Ford and Carter years, have been one of the most reliable Republican voting groups.

Internal divisions within Generation X are even more notable. The older portion of Generation X who came of age during the Reagan and George H.W. Bush presidencies, have voted more Republican than the electorate. In contrast, younger Xers, who became active politically during the Clinton administration, have mostly voted more Democratic than average. Millennials largely came of age during George W. Bush’s presidency and have consistently voted more Democratic by large margins.

Best President in Your Lifetime?

When asked which president has done the best job in their lifetime, more respondents name Bill Clinton and Ronald Reagan than any other presidents. Sizeable numbers in each of the four generational groups, including majorities of Millennials and Gen Xers, cite Clinton as either their first or second choice as the best president. Reagan matches Clinton in mentions among Baby Boomers and members of the Silent generation.

Despite the fact that many of them were quite young during Clinton’s years in office, nearly half (48%) of Millennials say Bill Clinton did the best job of any president in their lifetime. Another 12% cite him as second best. Fewer Millennials (37%) cite Obama as best or second-best. Relatively few (22%) say that George W. Bush was a favorite.

A majority of Xers also named Clinton as best (38%) or second-best (18%), while 43% cite Reagan (34% as best, 9% as second-best). Just 23% of Xers say that Obama is the best or second best president of their lifetimes; 18% cite George H. W. Bush and 14% cite George W. Bush.

Baby Boomers divide their loyalties about evenly between Clinton and Reagan, with 45% citing Reagan in either first (33%) or second (12%) place. About as many name Clinton as the best president (27%) or second-best (15%). About a quarter of Boomers (26%) cite John F. Kennedy.

Only among the Silent generation do presidents in office before Kennedy receive a significant number of mentions. But even among this older group, Clinton and Reagan are essentially tied for the top positions. Reagan is cited by 36% and Clinton by 35% as best or second-best. Kennedy is mentioned by 29%, Dwight D. Eisenhower by 17%, and Harry S Truman and Franklin D. Roosevelt are named by 11% and 12%, respectively.

There is broad public agreement that past government policies intended to address the financial crisis and recession have not worked. At the same time, there is very little agreement about what the government should do now to deal with the nation’s biggest economic concern – the job situation.

None of the options currently under discussion for dealing with the job situation are viewed as very helpful. In fact, fewer than four-in-ten say each of these proposals would help the job situation a lot: additional spending on public works (37%); cutting taxes for businesses (36%) or individuals (31%); budget cuts to reduce the deficit (34%); or providing money to state and local governments to help them avoid layoffs (33%).

The latest Pew Research/National Journal Congressional Connection Poll, sponsored by SHRM, which was conducted June 17-20 among 1,009 adults, finds that majorities do think each proposal would at least do a little to help the job situation. Relatively few say the proposals would not help the job situation at all, although slightly more say this about cutting personal income taxes (29%) than the other options.

The survey finds continued public skepticism about the impact of last year’s economic stimulus legislation, as well as the government’s loans to troubled banks and financial institutions. Six-in-ten (60%) say the stimulus has not helped the job situation while just a third (33%) say that it has helped.

A majority (54%) also says that the government’s loans to troubled financial institutions did not help prevent a more severe economic crisis, while 38% say it did help. Opinions about the impact of the financial bailout, like views of the stimulus, have changed little changed since April.

Little Enthusiasm for any Job Remedies

There are sizable partisan differences in views about the effectiveness of proposals to address the job situation. Still, none of these options gets an overwhelmingly positive response from Republicans, Democrats or independents.

Indeed, cutting business taxes is the only proposal viewed by a majority of Republicans (55%) as helping the job situation a lot. None of the options are viewed as very helpful by a majority of Democrats or independents.

More than four-in-ten Democrats (44%) say additional spending on public works would do a lot to help the job situation while 40% say the same about providing money to state and local governments to avoid layoffs. Far fewer see tax cuts for businesses (22%), budgets cuts to reduce the deficit (22%) or tax cuts for individuals (20%) as helping a lot. Independents’ views about proposals to improve the job situation show little variance – between 34% and 37% view them as helping a lot.

Still Skeptical of Stimulus, TARP

People with less education and lower incomes are particularly skeptical of the impact of last year’s economic stimulus legislation on the job situation.

Just 28% of those with no more than a high school education say the stimulus has helped the job situation, compared with 44% of college graduates. Only about three-in-ten (29%) of those with family incomes of less than $30,000 view the impact of the stimulus positively; that compares with 39% of those with family incomes of $75,000 or more.

Republicans have an overwhelmingly negative view of the effect of the stimulus: 80% say it has not helped the job situation. Most independents (59%) also say the stimulus has not helped. A narrow majority of Democrats (53%) say the stimulus has helped the job situation, though 40% disagree.

The public’s views of the impact of government loans to troubled banks and financial institutions have changed little since April. But college graduates and Republicans, in particular, have grown more skeptical of the bailout.

Fewer than half of college graduates (45%) now say that the bailout helped prevent a more severe economic crisis, down from 56% in April. And just a quarter of Republicans (25%) now say that the financial bailout helped prevent a worse crisis, down from 35% in April. Opinions among Democrats and independents are virtually unchanged over the last two months.

MORE GIVE ADMINISTRATION POOR RATINGS FOR OIL LEAK RESPONSE

Over the past month, the public’s views of how both the Obama administration and BP have handled the Gulf oil leak have changed only modestly. Still, a significantly higher percentage gives the administration a poor rating now (35%) than did so last month (26%), largely because Republicans have grown much more critical of its handling of the oil leak.

The administration continues to get much higher marks for its response to the oil leak than does BP. Currently, 33% rate the administration’s response to the leak as excellent or good; another 29% say the administration has done only fair. Both measures are little changed from May.

By contrast, just 18% give positive ratings to BP’s response, while 28% say it has been only fair. And even with the rise in poor ratings for the Obama administration, many more rate BP’s response to the oil leak as poor (49%) than say that about the administration’s response (35%).

The latest Pew Research/National Journal Congressional Connection Poll, sponsored by SHRM, which was conducted June 17-20 among 1,009 adults, finds that opinions about the administration’s response to the oil leak have become more partisan since May. Currently, 64% of Republicans rate the administration’s response as poor, up from 44% last month. Republicans now are less critical of BP than of the administration; fewer than half (47%) of Republicans say BP has done a poor job in responding to the leak.

By contrast, Democratic evaluations of the administration’s response to the leak have become somewhat more positive (48% excellent/good in May, 59% excellent/good today). As was the case in May, independents are divided: 30% say the administration has done an excellent or good job, 31% only fair, while 35% say the administration has done a poor job in responding to the leak.

MIXED VIEWS OF KAGAN NOMINATION, MANY OFFER NO OPINION

With Senate hearings on Elena Kagan’s nomination to the Supreme Court set to begin June 28, the public remains divided over whether she should be confirmed, though many still express no opinion. On balance, more Americans support Kagan’s nomination than oppose it (by 33% to 25%), but more than four-in-ten (42%) say they do not know or decline to offer an opinion.

The latest Pew Research/National Journal Congressional Connection Poll, sponsored by SHRM, which was conducted June 17-20 among 1,009 adults, finds that views of Kagan have changed little since President Obama announced his choice on May 10. A Congressional Connection Poll conducted May 13-16 found 33% supporting Kagan’s confirmation, 21% opposed, and 46% with no opinion.

In recent weeks, the nomination has received scant coverage and generated little controversy. According to the Pew Research Center’s Project for Excellence in Journalism, the nomination accounted for 13% of the newshole in the week immedia
tely after President Obama unveiled his pick, but 1% or less of overall news coverage in each succeeding week.

Heading into the Senate Judiciary Committee hearings, views of Kagan are comparable to those of President George W. Bush’s second and third nominees, Harriet Miers and Samuel Alito. Miers, a one-time White House counsel, withdrew her nomination in the fall of 2005 amid questions about her qualifications. Several months later, the Senate, then controlled by Republicans, confirmed Alito on a 58-42 vote on Jan. 31, 2006.

The divided opinion about Kagan stands in contrast to the broader support for Sonia Sotomayor last year after Obama nominated the former appeals court judge to the Supreme Court. Last June, twice as many said the Senate should confirm Sotomayor as opposed her confirmation (50% vs. 25%). The Senate voted 68-31 to confirm Sotomayor on Aug. 6, 2009.

Continued Partisan Divide over Kagan Nomination

More than half (54%) of Democrats say Kagan should be confirmed, compared with 17% of Republicans and 33% of independents. Democratic support is unchanged from when the question was first asked in mid-May.

Among Republicans, 43% say Kagan should not be confirmed, slightly higher than the 35% that said this in May. Independents mirror the public as a whole – 33% say Kagan should be confirmed, while 25% say she should not be. About four-in-ten in each group offer no opinion.

Last June, Sotomayor, whose nomination sparked more controversy than Kagan’s has so far, had broader support from all partisan groups. About seven-in-ten Democrats (69%) said she should be confirmed, along with 47% of independents and 30% of Republicans.

Currently, men are evenly split over Kagan’s nomination; 32% say she should be confirmed, 30% say she should not, while 38% offer no opinion. Women are somewhat more supportive (34% confirm vs. 20% oppose) while 46% have no opinion. Last year, nearly half of men (47%) supported Sotomayor’s confirmation while 28% were opposed. Women favored Sotomayor’s confirmation by more than two-to-one (52% to 22%).

No Consensus on Kagan’s Ideology

The survey also finds that many Americans are unsure of Kagan’s political ideology: 28% say they think she is liberal, while 24% say they see her as moderate. Just 7% see her as conservative. Four-in-ten (41%) offer no opinion or say they do not know.

Republicans are much more likely to see Kagan as liberal (45%) than Democrats (17%) or independents (29%). Democrats, meanwhile, are more likely to see the nominee as moderate. Close to four-in-ten (38%) say they think she is moderate, compared with 13% of Republicans and 23% of independents.

The public is increasingly optimistic that the nation’s economy will improve in the next year, while a growing number also expect their personal finances to get better. But this has not caused people to open their wallets: The proportion saying they have cut back on personal spending remains as high as it was earlier this year.

Nearly half of Americans (48%) say they expect economic conditions a year from now to be better than today, up from 40% in February. Over the same period, the percentage saying they expect their personal finances to improve at least some has risen from 54% to 63%.

Despite these positive signs, there is no indication that Americans are more willing to spend money. Roughly three-quarters (76%) report they have cut back on vacation spending, been eating at restaurants less often, or have delayed purchasing a car or major home items. That figure is largely unchanged from February (79%) and last December (77%).

When changes in savings, investment and home-purchasing decisions are factored in, nearly nine-in-ten Americans (87%) say they have made at least one spending cutback or an investment or saving adjustment. This also is about the same as in February (86%) and December (85%).

As in the past, more people say they are cutting back on spending because they worry their financial situation might get worse rather than because it actually has gotten worse. Fully 50% say they have delayed or cut back spending out of fear about the future, while 36% say they are cutting back because their finances have gotten worse.

This represents only a modest change since February or December, when a majority of those who had cut back in personal spending – 56% in February and 59% in December – said it was because they were concerned about the future, not because their own finances had deteriorated. In effect, the psychology of bad times continues to affect people’s spending decisions as nearly much today as it did in December, even though there is greater financial optimism and assessments of the current state of the economy are somewhat less bleak.

Views of Current Conditions

The latest national survey by the Pew Research Center for the People & the Press, conducted June 10-14 among 1,502 adults reached on landlines and cell phones, finds that while just 9% say that current economic conditions are excellent or good – which is little changed from March (6%) – there has been a substantial decline in the percentage saying that conditions are “poor.”

About half (52%) now view the economy as poor, down from 68% in March. The current measure is the lowest proportion viewing the economy as poor since last July (52% now, 50% then). Since March, the proportion rating the economy as “only fair” has risen from 25% to 39%.

Much of the decline in poor economic ratings has come among Democrats and independents; roughly half in each group now view the current national economic situation as poor (50% of Democrats, 49% of independents); in March, 73% of Democrats and 71% of independents said the national economy was in poor shape.

By contrast, there has been little change in Republicans’ ratings of the economy; 58% now say the economy is poor compared with 62% in March. As a consequence, a greater share of Republicans than Democrats or independents views the economy as poor. This represents a reversal of the pattern through much of the Bush administration, when Republicans rated the national economy much more positively than did Democrats.

While ratings of the national economy have become less negative, there has been little change over the past several months in people’s assessments of their own financial situations. About four-in-ten (38%) say they are in excellent (6%) or good shape (32%) financially; most rate their finances as only fair (39%) or poor (22%). In February and December, 38% also rated their personal finances positively.

More Economic Optimism, But Not Among the Poor

While economic and personal financial optimism has increased sharply since February, the shift has come among middle-income and more affluent Americans – not the poor. Currently, about half (52%) of those with family incomes of $75,000 or more say they expect economic conditions to be better a year from now, up from 36% in February. The shift has been as large among those with incomes between $30,000 and $75,000 (from 36% to 51%).

But those with low incomes ($30,000 or less) are now less optimistic that economic conditions will improve than they were in February (42% today, 52% then).

There also have been increases in the percentages of Democrats (by 11 points) and independents (9 points) who expect national economic conditions to improve. Republicans’ expectations about the economy, which turned much more negative following the election, have not changed since February.

Overall, 63% say they think their financial situation will improve a lot (9%) or some (54%) over the course of the next year. That is up nine points from February and is the highest measure of personal financial optimism since early 2007 (63%).

Two-thirds (66%) of those with family incomes of $75,000 or more expect their finances to improve, as do 68% of those with incomes of $30,000-$75,000; in February, only about half in both groups expected their financial situations to improve (47% and 54%, respectively).

However, poor people are no more optimistic than they were in February (66% then, 61% today). Four months ago, people with family incomes of $30,000 or less were more confident than those with higher incomes that their finances would improve; today, if anything, they are slightly less confident.

Notably, Republicans and independents express more personal financial optimism than they did in February. Nearly two-thirds of independents (65%) expect that their personal finances will improve a lot or some over the next year, up from 50% in February. Republicans (up 11 points) also are more optimistic, though there continues to be a sizable partisan gap in personal financial expectations. Nearly three-quarters of Democrats (73%) expect at least some improvement in their financial situations over the next year, compared with 54% of Republicans.

Top Economic Problems

Public concern about the job situation, which surged earlier this year, has leveled off. Currently, 42% cite the job situation as the economic issue they worry about most, which is largely unchanged from March (42%) and February (45%). Last December, only 26% viewed jobs as their top economic concern.

Meanwhile, worries about rising prices – which dominated the public’s economic concerns last year during the rapid run-up in gas prices – are once again increasing. Currently, 29% say rising prices are the issue that most worries them, up from 22% in March. A year earlier, fully 49% named rising prices as their biggest economic worry.

As the stock market has become less volatile, concern over problems in financial markets has declined. Currently, 15% cite problems in the markets as their top economic worry, down from 21% in March and 31% last October. In March, comparable shar
es cited rising prices (22%) and problems in the financial markets (21%) as their biggest economic worry; now, nearly twice as many say they are most worried by rising prices (29% vs. 15%). Fewer than one-in-ten (8%) cite declining real estate values as the economic issue that they find most worrisome, a figure that has stayed fairly constant for more than a year.

Among those with family incomes of $75,000 or more, concern about rising prices has nearly doubled – from 12% to 22% – since March. Over the same period, the share of this group saying problems in financial markets are most worrisome has declined, from 35% to 23%.

Cutting Back and Changing Plans

As has been the case for the last several months, an overwhelming majority of the public (87%) reports having made changes in personal financial behaviors, either by cutting back on spending or adjusting retirement or savings and investment plans. In particular, majorities say they have cut back on planned spending for vacation travel (59%), changed the way their money is saved or invested (57%) and are eating out at restaurants less often (56%).

The proportion of Americans reporting changes in most of these behaviors remains virtually unchanged since December. However, over this time period, there has been a nine-point increase in the percentage saying they have changed the way their money is saved or invested (from 48% to 57%).

While those in all income groups are equally likely to report having made one or more changes in their personal financial behavior, those with annual family incomes of $75,000 or more are less likely than those earning less than $75,000 to say they delayed or canceled plans to buy a home or make home improvements (33% vs. 45%), put off buying a new car (30% vs. 39%), or cut back on vacation spending (52% vs. 63%).

For the public, the continuing financial crisis has been overtaken by a jobs crisis. The proportion of Americans citing jobs or unemployment as the nation’s most important economic problem has more than quadrupled – from 10% to 42% – since early October and job worries now far surpass concerns over the financial crisis.

People’s perceptions of the availability of jobs in their areas have worsened as the unemployment rate has increased. Fully 80% say that jobs are difficult to find in their local communities – up seven points since December and 16 points since early October. Overall views of the national economy, already quite negative at the end of last year, have declined further; 30% say the country is in a depression, up from 20% as recently as December.

As has been the case since the financial crisis began, a sizable minority of Americans (40%) say they expect economic conditions to be better a year from now. But the proportion expressing that optimistic view has declined by six points since early October, while the percentage saying they expect things to be worse or the same a year from now has increased from 46% to 56%.

The latest national survey by the Pew Research Center for the People & the Press, conducted Feb. 4-8 among 1,303 adults reached on cell phones and landlines, finds that an increasing proportion of workers expect to face some form of job or benefit cutbacks in the year ahead. More than three-quarters (77%) of working adults say it is not likely they will actually be laid off in the next year, but 21% say a layoff is very or somewhat likely, up from 15% in January 2008. The percentage saying it is at least somewhat likely they may be asked to take pay cut has nearly doubled since the beginning of last year – from 13% to 25%.

The share of workers, either full- or part-time, who say any one of the following things is likely to happen over the next year – a layoff, a reduction in pay, a reduction or elimination of health benefits, or their employer going out of business or moving – has jumped from 35% in January 2008 to 44% currently.

Notably, much of the increase has come among well educated, high-income workers, who are now about as likely as less educated, lower-income workers to predict job problems in the coming year. More than four-in-ten college graduates (46%) see one or more job difficulties as at least somewhat likely (layoff, pay or benefits reduction, or their employer going out of business or moving); in January 2008, just 28% of college graduates said that one or more of those problems was likely.

Workers with family incomes of at least $75,000 also are much more likely to see possible job difficulties in the year ahead than in January 2008 (43% now vs. 27% then). As a consequence, the wide income differences last year in predictions of job losses or compensation cutbacks have disappeared.

The survey finds that as the financial crisis has deepened, affluent Americans, in particular, have grown increasingly skeptical that the economy will come back in the coming year. Only about a third (34%) of those with family incomes of $100,000 a year or more say they expect national economic conditions to be better a year from now. That is down 22 points from 56% in early October, the largest decline in any income category. In the last two months alone, the proportion of affluent people predicting an improvement in the national economy has fallen by 12 points (from 46% to 34%).

Personal financial optimism also has fallen sharply among those with family incomes of at least $100,000. Currently, 44% of those in this income category say they expect their personal finances will improve a lot or some over the next year, down from 59% in early October. Personal financial optimism also is down 11 points among those making between $75,000 and $100,000, and 12 points among those making $50,000 to $75,000. By contrast, people with lower incomes remain about as optimistic as they were in early October.

As was the case in December, substantial proportions of Americans say they are delaying or canceling planned spending on vacations, automobile and home purchases, and are eating out less often. Overall, spending cutbacks continue to be driven by worry that their finances will get worse, rather than an actual deterioration in people’s financial situation. As in December, people with higher incomes say their decisions to delay or cancel spending are mostly because of concern about the future; those with lower incomes are more likely to say their situation has already gotten worse, making cutbacks necessary.

The survey finds that as many as 40% of Americans have been affected by one or more job problems over the past year, when unemployment, underemployment, layoffs, reductions in pay or hours and job losses by other household members are looked at collectively. In this regard, job problems are affecting the financial position of a much broader swath of Americans than just those who are currently unemployed. People who are employed but have faced underemployment, job losses or income cutbacks are just as likely as those who are currently unemployed to have trimmed spending or to have had trouble paying bills.

Americans are concerned about the nation’s economic problems almost to the exclusion of every other issue, and they register the lowest level of national satisfaction ever measured in a Pew Research Center survey. Just 11% say they are satisfied with the way things are going in the country – down 14 points in the past month alone.

However, there is little indication that the nation’s financial crisis has triggered public panic or despair. Most Americans express confidence that the government still possesses the power to fix the economy, though that belief has lost adherents since July. There has been no decline in people’s perceptions of their own financial situations. Looking ahead to next year, Americans are more confident than they were in July about an improvement in the national economy and in their own personal finances.

This is not to say that the public has been spared the effects of the financial crisis: over the past three weeks, there have been sharp increases in the percentages saying they plan to rein in spending in a number of areas. Moreover, for the first time in a Pew survey, more Americans say that “people should learn to live with less,” rather than that “there are no limits to growth in this country.”

The latest national survey by the Pew Research Center for the People & the Press, conducted Oct. 9-12 among 1,485 adults reached on landlines and cell phones, finds that an increasing number say that jobs are difficult to find locally, and views of local real estate values remain negative. In addition, fewer people than in February say that their employer is in excellent financial shape. But these perceptions notwithstanding, there are no signs that the crisis has eroded people’s fundamental confidence in either their own personal financial outlook or the nation’s. As in July, a solid majority of Americans (54%) says the economy is in a recession, and the percentage saying the nation is in depression has not grown significantly (22%). Compared with this summer, more Americans think that economic conditions will improve next year (46% vs. 30%).

Continued optimism about the economy may well reflect the fact that while polls have shown that the president and Congress receive low grades for dealing with the financial crisis, most Americans continue to say that the federal government still has the power to fix the economy. A 56% majority of the public expresses this view, though that is considerably less than the percentage saying this in July (68%).

Perhaps more important, the public’s personal financial ratings are no lower than they were in mid-summer; 41% rate their finances as excellent or good, which is virtually unchanged since July (42%). Notably, 59% say they expect their financial situation to improve over the next year, up from 51% in July. Declining energy prices may be playing some part in the public’s resilience in the face of the financial crisis. The proportion citing fuel or gas prices as the top economic problem facing the country has fallen steeply, from 38% in July to 10% currently.

Overall, fewer people now say that their incomes are falling behind the cost of living (57% vs. 64% in July). However, while inflation concerns have eased somewhat, nearly four-in-ten (38%) say that rising prices is the economic issue that worries them most; by comparison, 31% cite problems in the financial markets. Among those who describe themselves as working class or struggling financially, far more say their biggest economic worry is rising prices rather than problems in the financial markets. By contrast, those who describe themselves as professional or business class are far more likely to cite problems in financial markets than rising prices.

The new poll finds no evidence that fundamental American optimism has eroded in the face of the financial crisis. Even after a week of some of the largest stock market declines since the Great Depression, 64% of the public say that “As Americans, we can always find ways to solve our problems and get what we want.” That is up from 59% since December 2004, shortly after the last presidential election.

Yet the survey does show a shift in basic public values regarding the limits of growth. A 49% plurality now says that “people in this country should learn to live with less” – the highest percentage expressing this sentiment since the question was first asked in 1994.

In this regard, Americans clearly signal they intend to scale back their own spending. Nearly six-in-ten (59%) say they have delayed or cancelled vacation spending while 55% say they have been eating out at restaurants less often. Roughly half (48%) say they are changing the way their money is saved or invested, while substantial minorities are either delaying or shelving plans to make major household purchases (39%) or to buy a new car (36%). The percentages saying they are reining in spending have risen sharply in the past three weeks.

Views on Regulation of Business Unchanged

As Americans’ fundamental optimism remains unabated by the financial crisis, basic views about the role of government have shown only modest changes. The public continues to be divided about the efficacy of government regulation of business. Currently, 50% believe such regulation is necessary to protect the public interest, while 38% think government regulation of business does more harm than good. The balance of opinion is largely unchanged since December 2004 (49% vs. 41%).

Overall views of government are more negative they have been since the late 1990s. Nearly six-in-ten (57%) say that “government is almost always inefficient and wasteful” – up 10 points since December 2004. And somewhat fewer Americans say “the government should do more to help needy Americans even if it means going deeper into debt” than did so in 2004 (51% now, 57% then).

Views of business also have become more negative. Roughly eight-in-ten (78%) believe that “too much power is concentrated in the hands of a few large companies,” which is largely unchanged from past years; but a greater percentage strongly express this sentiment (70%) than at any point since the question was first asked in 1994. In addition, there has been a modest increase in the percentage saying “business corporations make too much profit” – from 53% in December 2004 to 59% currently.

Debtors and Banks Blamed for Crisis

There is a broad public consensus regarding the causes of the current problems with financial institutions and markets: 79% say people taking on too much debt has contributed a lot to the crisis, while 72% say the same about banks making risky loans. Far fewer say weak governmental regulation of financial institutions (46%) or other factors have contributed a lot to the recent problems.

There are substantial partisan differences in opinions about the causes of the crisis. Far more Democrats than Republicans say weak government regulation is a major contributing factor (56% vs. 38%); 45% of independents express this sentiment. By contrast, fully 91% of Republicans place a lot of blame on people taking on too much debt, compared with 80% of independents and 74% of Democrats.

Crisis Favors Obama

With few Americans expressing a positive view of national conditions
and President Bush’s approval rating reaching a new low (25%) in a Pew survey, the political environment favors the Democrats. Barack Obama holds a sizable 50% to 40% lead over John McCain, and a greater share of his supporters back him strongly. Moreover, the percentage of voters saying they have definitely decided not to vote for McCain has risen steadily, from 37% in early August to 45% in the current survey.

Voters continue to express more confidence in Obama than in McCain to handle the financial crisis; 47% say Obama could best address the current problems while 33% choose McCain. Voters are especially critical of McCain’s performance in explaining how he would handle the crisis. Just 29% say he has done an excellent or good job in explaining his approach to the crisis while 67% say he has done only a fair or poor job.

Obama’s ratings for explaining how he would handle the crisis are much better than McCain’s. Still, fewer than half (48%) say Obama has done an excellent or good job in this regard, while about as many (47%) say he has done only fair or poor.

As Congress debated the financial bailout bill over the past week, public support for government action has declined. A new Pew Research Center survey conducted Sept. 27-29 finds 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. This represents considerably less support than the plan engendered immediately after it was first proposed. A Pew survey conducted Sept. 19-22 had found a wide majority of the public favoring government action (57% right thing, 30% wrong thing).

The public is expressing both fear and loathing about the idea of the government committing billions of dollars to solve the problem. Six-in-ten Americans (61%) say that they feel angry about the government’s plan, and half (50%) also admit they are scared. Many report being confused (43%), but relatively few (29%) describe themselves as optimistic.

Anger about the rescue plan crosses party lines, and Republicans, Democrats and independents all offer less support for the idea now than they did at the outset. Among Republicans there has been a 15-point decline – from 64% to 49% – in the share saying the bailout is the right thing to do. Support among Democrats has fallen 10 points from 56% to 46%. As a consequence, while Republicans were slightly more supportive initially, support for the plan is now about the same among Republicans, Democrats and independents.

The new Pew Research Center survey, conducted among 1,505 adults reached over both landline phones and cell phones, finds Democrats expressing more concern than Republicans about several aspects of the current financial situation. The public’s top worry about the current situation is that “those who are responsible for causing the crisis will be let off the hook.” Nearly three-quarters of Americans (72%) say they are very concerned about this, including 77% of Democrats, 69% of Republicans and 69% of independents. More than six-in-ten (63%) say they are very concerned that “the government’s actions won’t fix the things that caused this problem in the first place.” This, too, is of greater worry to Democrats and independents than to Republicans.

A 54% majority of the public says they are very concerned that the government’s action “won’t do enough to help homeowners in danger of losing their homes.” The partisan gap is greatest on this aspect of the bill, with 66% of Democrats and just 37% of Republicans seeing this as a major concern. Perhaps surprisingly, Republicans do not express particular worry about excessive government involvement in the nation’s financial markets. Overall, 44% of Americans are very concerned that “the government is becoming too involved in financial markets.” This includes roughly equal numbers of Republicans (45%), Democrats (40%) and independents (47%).

Voters continue to give Barack Obama a substantial edge over John McCain in terms of being better able to handle the current financial problems. By a margin of 46% to 33%, more voters cite him as the candidate who could best address the current problems involving investment banks and companies with ties to the housing market. This reflects the overwhelming backing of Democratic voters on this issue, along with a slim 38% to 32% edge over McCain among independents. Obama’s 13-point advantage over McCain on this issue is comparable to the 12-point advantage he held in the Pew survey last week.

Overall, the public has had a mixed reaction to the congressional response to the bailout. A slim plurality (37%) says they think Congress is giving the right amount of consideration to recent problems in the financial markets. But another 32% say Congress is taking too much time debating the issue. Fewer people (22%) are of the opinion that Congress is being too hasty in addressing the situation.

Ratings of the pace of Congress’ response are not partisan: four-in-ten in both parties say Congress is giving the crisis the right amount of consideration; somewhat fewer independents agree (33%).

Most Americans (54%) say they have given a lot of thought to the debate in Washington over how to respond to recent problems in the financial markets. Those who have given a lot of thought to the issue are much more likely than others to say they are very concerned that those who are responsible for the crisis will be let off the hook, that the government will not address root causes of the crisis, and that it gets the government too involved in the markets.

Despite their higher level of concern about aspects of the situation, those who have given the issue a lot of thought offer the same bottom-line opinion about the government’s plan as do people who have given it less consideration: 45% of both groups say government action is the right thing to do.

Those who have given the issue a lot of consideration also are more patient with Congress. Among Americans who have thought a lot about the crisis, 43% say Congress is giving the issue the right amount of consideration, while just 28% say Congress is taking too much time debating the issue. Those who have given little or no thought to the issue are more likely to criticize Congress for moving too slowly.

Not surprisingly, opponents of the plan to have the government invest billions into securing the markets express the greatest worry about the limitations of the plan. But even among the 45% of Americans who say this is the right thing for the government to do, concerns run high. Fully two-thirds (68%) of Americans who back the bailout plan say they are very concerned that it will let those responsible for causing the problems off the hook, and 58% also say they are very worried that it will not fix the things that caused this problem in the first place.

The biggest gap between proponents and opponents of the government bailout is over the issue of excessive government involvement in the markets. Among those who see the bailout plan as the wrong thing to do, 60% say they are very worried that the government is becoming too involved in financial markets. Among those who see the bailout as the right thing to do, just 33% are equally worried.

By a margin of almost two-to-one the American public thinks the government is doing the right thing in investing billions of dollars to try to keep financial institutions and markets secure. Reacting to initial reports of the federal bailout plan over the weekend, 57% said the government was doing the right thing, while 30% said it was doing the wrong thing. At the same time, only 19% of the public believes that the government is currently doing an excellent or good job in handling the financial problems on Wall Street. Support for the administration’s plan to bailout many of the nation’s troubled financial institutions is largely bipartisan.

These are the principal findings of a Pew Research Center for the People and the Press survey conducted September 19-22, 2008 among 1,003 adults, which found that voters favor Barack Obama over John McCain as the presidential candidate best able to address the current financial crisis: 47% favor Obama, while 35% choose McCain. Independents prefer Obama over McCain by a margin of 44% to 30%, while Republicans and Democrats line up solidly behind their party nominees.

The survey finds the highest level of citizen interest in reports about the economy in nearly 20 years of Center news interest polling. A solid majority of Americans (56%) say they followed news about the economy very closely last week. In addition, 49% say they followed news about the turmoil on Wall Street very closely.

Furthermore, large numbers of Americans were aware of specific aspects of the Wall Street story. Nearly two-thirds (64%) reported hearing a lot about the Federal Reserve’s loan to insurance giant AIG; 59% heard a lot about Lehman Brothers filing for bankruptcy; and roughly half (49%) heard a lot about the sale of Merrill Lynch to Bank of America. By Monday night 58% had heard a lot about the government bailout plan.

Despite the intense public focus on economic and financial news, relatively few Americans (24%) say they understand the recent problems on Wall Street very well. A relatively large proportion (48%) say they understand the current financial crisis fairly well, while 28% say they have very little or no understanding of the situation. Among those who say they have a good understanding of the crisis, 54% express a positive view of the government’s plan to invest billions to shore up financial institutions; that differs little from those who say they understand the situation fairly well (58%), or those who say they understand little or nothing about the plan (54%).

The government is widely criticized for its handling of the financial problems on Wall Street. Only 2% say the government is doing an excellent job and 17% say it’s doing a good job. The vast majority of Americans say the government is doing only a fair (44%) or poor (33%) job handling the problems on Wall Street. These negative assessments of the government’s performance are shared by Republicans and Democrats alike. Democrats and independents are particularly critical of the government in this regard: 38% of each say the government is doing a poor job.

The public continues to be extremely downbeat about the national economy. Just 10% say the economy is in good shape, while 72% say the economy is either in a recession (54%) or a depression (18%). On a personal level, concerns about rising prices have surged. Beyond widespread anxiety about energy costs, a growing number of Americans say it is difficult for them to afford food.

The percentage of Americans who cite rising prices as the nation’s most important economic problem has nearly doubled since February – from 24% to 45%. Nearly two-thirds (64%) now say their incomes are not keeping up with the rising cost of living, which also is up substantially from February (58%). The number saying it is difficult to afford food has followed a similar upward path; 38% say that now, compared with 27% five months ago.

While rising costs are clearly the top economic problem in the public’s view, it is far from their only concern. More than seven-in-ten (73%) say good jobs are difficult to find, compared with 55% a little more than a year ago (June 2007). The proportion saying that local real estate prices are declining has jumped since February, from 41% to 56%.

The multiple economic concerns are taking a toll on public optimism. About half of Americans (51%) expect their personal financial situation to improve over the next year, down from 55% in March and 60% in January. Yet despite the worsening economic perceptions, the public does not see the economy as beyond repair. Nor do they believe that the government is incapable of fixing the economy in an era of global economic interdependence.

Nearly three-quarters (72%) believe that “something can be done to deal with the problem of rising prices.” This is virtually identical to the number who held this opinion in the fall 1980, when inflation was much greater than it is today. And while most Americans say that the global economy is having an impact on the way things are going in the U.S., only a minority (26%) expresses the view that the government is powerless to fix the economy as a consequence.

The latest national survey by the Pew Research Center for the People & the Press, conducted July 23-27 among 1,503 adults, finds that nearly nine-in-ten voters (87%) say that when it comes to the economy, it matters who is elected president; 64% say it matters a great deal. In this regard, far more voters say that Barack Obama, rather than John McCain, can do a better job of improving economic conditions (47% to 32%).

This is a slightly narrower advantage for Obama on the economy than in June (51% to 31%); however, the survey also finds that McCain’s advantage on terrorism is a bit smaller than it was a month ago. Moreover, Obama runs about even with McCain as the candidate better able to handle foreign policy (43% McCain vs. 42% Obama). In September 2004, George Bush held a 16-point lead over John Kerry on foreign policy.

These opinions may reflect some positive reaction for Obama’s recent visit to the Middle East and Europe. However, the survey shows no overall gain for Obama in the presidential horserace. At 47% to 42%, his lead is about what it was in late June (48% to 40%). As was the case in June, independent voters split evenly between McCain and Obama (43% McCain, 42% Obama).

The weekly News Interest Index showed that Obama’s tour drew considerable public attention. Overall, 62% said they heard a lot about his trip to Europe and the Middle East, which is among the highest measures of public awareness of any campaign event to date.

Nearly half (48%) of those who heard about his trip say they learned at least something about Obama’s foreign policy, but only 15% feel like they learned a great deal about his approach. A narrow majority (52%) says they learned not much or nothing at all about his approach to foreign policy as a result of the trip. (For more information, see July 31, 2008 report: Obama’s Trip a Top Campaign Event for Public.)

Globalization Faulted

The survey finds that, amid increased public skepticism about the benefits of free trade, the public takes a decidedly negative view of the impact of the global economy on the United States. Eight-in-ten say the global economy has at least a fair amount of influence on the U.S. economy, and 35% say it has a great deal of influence.

The vast majority of those who believe the global economy affects conditions in the United States say it is having a negative impact. Notably, there are virtually no partisan differences in this opinion: 65% of independents and Republicans, and 63% of Democrats, say that the global economy is having a negative impact on the way things are going in the United States.

The broad sense of national dissatisfaction with current conditions – 74% express a negative view of national conditions, up nearly 20 points from July 2004 – is reflected in other measures as well. Disapproval of President Bush has ticked upward, and now stands at 68%, the highest in his presidency. Just 27% approve of Bush’s job performance, which equals the all-time low measured in April.

Causes of Economic Problems

There is broad public agreement that international competition for oil and other natural resources is an important factor in the nation’s current economic difficulties. Fully two-thirds of Americans (66%) say international competition for resources has contributed “a lot” to these problems, more than the percentages citing bad loans by banks, excessive spending by individuals, the budget deficit, and other factors.

Comparable proportions of Republicans and Democrats say international competition for resources and bad loans by banks have contributed a great deal to the nation’s current economic problems. But Republicans are more likely than Democrats to blame excessive spending, and too little saving, by Americans: 60% say this has contributed a lot to the economic problems, compared with 48% of Democrats.

By contrast, many more Democrats than Republicans cite the federal budget deficit. Nearly six-in-ten Democrats (59%) say the federal budget deficit has contributed to the nation’s economic difficulties, compared with just 36% of Republicans.

Only about four-in-ten people (44%) say Americans’ buying imported products rather than U.S.-made goods has contributed a great deal to the nation’s economic problems. But those with less education and lower incomes are far more likely to cite this as an important factor: a majority of those with no more than a high school education (52%) say that purchases of imported products have contributed a lot to U.S. economic difficulties, but only about half as many college graduates (28%) agree.

Most Important Problem

The economy now far overshadows the war in Iraq, or any other issue, as the nation’s most important problem. Fully 61% cite an economic concern – including gas and energy prices – as the most important problem facing the nation, up from just 34% in January.

Nearly four-in-ten (39%) point to the economy in general as the most important national problem, about double the proportion in January (20%); another 19% mention gas or energy prices, up from just 3% in January.

About as many people now volunteer gas or energy prices as the nation’s most pressing problem as cite the Iraq war (19% vs. 17%). The proportion mentioning Iraq as the nation’s top problem has declined by more than half since January 2007, when 42% cited the war as the most important national problem.

Two-thirds of Democrats (67%) list an economic problem, compared with 59% of Republicans and 61% of independents. In January, 39% of Democrats, 27% of Republicans and 35% of independents named an economic issue as the nation’s greatest problem.

Democrats also remain significantly more likely than Republicans to view the war in Iraq as the most important problem facing the country (24% vs. 9%). However, Iraq’s importance has declined considerably among members of both parties since January, when 36% of Democrats and 21% of Republicans cited the war as the leading national problem.

Inflation Dominates Economic Concerns

When asked to name the most important economic problem facing the nation, fully 45% volunteer rising prices – with the price of energy cited most frequently (38%). In February, only about a quarter (24%) cited rising prices as the leading economic problem.

Increased concern about inflation and rising prices is evident across nearly all demographic groups. However, in the current survey, suburban and rural residents, as well as less educated people, stand out as being especially worried about inflation.

Those who live in suburban (47%) and rural areas (54%) are more likely than urban residents (37%) to cite prices – and often the price of gas, specifically – as the country’s most important economic problem. In addition, 49% of those with no more than a high school education cite rising prices as the leading economic problem, compared with 38% of college graduates.

Views of Personal Finances

A solid majority of Americans (56%) now rate their personal financial situations as only fair or poor, compared with 42% who say they are in excellent or good shape financially. In January, as many people rated their finances positively as viewed them negatively (49% each).

Most people expect their finances to improve over the next year. But the percentage expressing personal financial optimism has declined, from 60% in January, to 55% in March, and 51% currently. Roughly four-in-ten (42%) say their financial situation will get worse (28%) or volunteer that it will stay the same (14%).

Personal financial optimism has declined among most demographic and political groups since January. Only about half (49%) of middle-income Americans (those with incomes greater than $50,000 and less than $75,000) express optimism that their finances will improve, compared with 65% in January. College graduates also have a gloomier outlook – 51% believe their financial situation will get better, down from 64% in January.

Young people and African Americans remain optimistic about their personal financial situation over the coming year. Among those younger than 30, seven-in-ten (71%) expect things to improve for them in the next year, compared with only 41% of those older than 50. And though blacks are significantly less optimistic than they were in January, they are still somewhat more likely than whites to expect their personal finances to improve in the next year (62% blacks, 50% whites).

Optimism among African Americans and the young is tied to the fact that their current financial situation leaves much room for improvement: just 22% of blacks and 37% of those younger than 30 rate their current economic situation as excellent or good.

Views of National Economy

The public’s perception of the state of the national economy continues to be overwhelmingly negative. Just 10% rate economic conditions as excellent (1%) or good (9%), while 89% rate them as only fair (39%) or poor (50%).

That marks little changes since the spring; in both March and April, 11% rated the economy positively. But views of the economy are now much more negative than they were last year at about this time. In June 2007, a third said the economy was excellent or good, while 65% said it was only fair or poor.

Perceptions of the national economy are now about the same as they were during the recession of the early 1990s. In January 1992, for example, 12% viewed the economy positively, while 87% said it was only fair or poor.

Most Say Economy is in Recession or Depression

While economists debate whether the economic slowdown has met the technical definition of a recession, more than half of the public (54%) says the economy is in recession while another 18% say it is in a depression.

As was the case in March, there are partisan differences in these assessments. Democrats (83%) and independents (71%) are the most likely to hold these views. A smaller majority of Republicans (55%) say the economy is in a recession (45%) or depression (10%).

There are notable differences among Republicans over the state of the economy. Just half of conservative Republicans say the economy is in a recession or depression; about as many (49%) say the economy is either just having a few problems (26%) or is in excellent or good shape (23%). By contrast, two-thirds of moderate and liberal Republicans (68%) say the economy is either in a recession (49%) or a depression (19%). There are much smaller differences among Democrats in views of the state of the economy.

Not ‘Normal Ups and Downs’

A large majority of Americans who see the economy as only fair or poor say the problems facing the country are not just part of the “normal ups and downs” the economy experiences from time to time; rather, say 78%, the problems are deeper and more serious.

While majorities of all groups express this sentiment, it is particularly widespread among those with modest and middle-incomes; 85% of those with annual family incomes of less than $50,000 who rate the economy negatively characterize the nation’s economic problems as deeper and more serious, compared with 68% of those with incomes greater than $75,000.

There are clear political differences on this question as well. Almost nine-in-ten (88%) Democrats who view the economy negatively contend that the problems are serious and deep; this view is universally shared among liberal Democrats (95%). Just 60% Republicans say the problems are deeper and more serious than normal.

While views of the current financial climate are decidedly negative, only a minority of Americans (30%) expect things to get better in the next year. More than twice as many people say they expect conditions to stay the same (41%) or get worse (21%).

Views about whether the economy will improve vary little across demographic groups or by party. However, among the most pessimistic are those with the lowest incomes: 27% of those in households making less than $30,000 a year say that the economy will be in worse shape next year.

Affording Necessities

For many Americans, it is getting harder to afford some of life’s most basic necessities. As was the case earlier this year, majorities now say it is difficult to afford gasoline (68%), retirement savings (59%), and taxes (52%). In addition, nearly half of the public says it is difficult to afford home heating and electric bills (49%) and health care costs (46%). While most Americans still say it is easy to afford food, the percentage saying this is difficult for them has risen dramatically since February. Currently 38% say it is difficult to afford food, up from 27% in February.

The percentage saying it is difficult to afford gasoline also has increased significantly – going from 60% in February to 68% currently. In addition, somewhat more Americans are now saying it is difficult to afford utility bills and retirement savings than said so just five months ago.

The proportion saying it is difficult to afford food is substantially higher than it was in January 1992, in the midst of a recession and widespread economic anxiety. At that time, a quarter of the public (24%) said it was difficult to afford food, compared with 38% currently. In addition, more now say it is difficult to afford heating and electric bills than did in January 1992 (49% now vs. 38% then).

The rising cost of food is having the biggest impact on lower and middle-income Americans. Nearly half (46%) of those with family incomes of between $20,000 and less than $50,000 a year say it is difficult to afford food, up from 34% in February. Among those with lower incomes (less than $20,000), 60% say it is difficult to afford food, up from 50% in February.

While affording food has become more difficult for those in the lower income categories, the rising price of gasoline is felt across all income groups. For those making between $50,000 and less than $100,000 a year, 69% say it is difficult to afford gasoline, up from 57% five months ago. And even among those in households making $100,000 a year or more, nearly half (47%) say it is now difficult to afford gas – up from 38% in February.

Inflation Takes a Toll

A growing majority of Americans say their family’s income is falling behind the cost of living. Nearly two-thirds (64%) now say their income is lagging behind rising costs, up from 58% who said this in February of this year. Only 28% now say their income is staying about even with the cost of living and a mere 6% say their income is going up faster than the cost of living. As recently as September 2007, the public was evenly divided on this issue: 43% said their incomes were staying about even with the cost of living and 44% said their incomes were falling behind.

Those in lower income groups are the most likely to say their incomes are falling behind rising costs. However, even among those in the highest income group (annual incomes of $100,000 or more), nearly half (48%) say their incomes are falling behind.

While most Americans say their family incomes are not keeping up with the cost of living, the proportion saying they owe more than they can afford on credit cards and non-mortgage debt has not changed substantially in recent years. Currently, 10% say they owe a lot more they can afford on credit cards and other non-mortgage debts; 12% say they owe a little more than they can afford.

Jobs Are Scarce – Especially Good Jobs

Most Americans (58%) say jobs are difficult to find where they live, while just 31% say plenty of jobs are available. The proportion saying there are plenty of jobs available locally has remained stable since April (30%), but has declined by 10 points since November 2007 (41%).

There has been an even larger decline in the percentage of Americans saying good jobs are available in their communities. Nearly three-quarters (73%) say good jobs are difficult to find locally, while just 22% say there are plenty of good jobs available. In June 2007, 55% said good jobs were difficult to find, while 36% said they were in ample supply.

Nearly two-thirds of those with family incomes of $100,000 or more (64%) now say that good jobs are difficult to find locally, up from 40% in June 2007. The change in perceptions about the availability of good jobs has been as dramatic among those making between $50,000 and $100,000.

By contrast, perceptions of the local market for good jobs have changed less over the last year among those with lower incomes, who already largely believed that good jobs were difficult to find.

There also has been a sharp increase in the proportion of Republicans saying that good jobs are difficult to find in their local areas (from 38% in June 2007 to 60% currently). More Democrats and independents continue to say that good jobs are in short supply (79% and 74%, respectively).

Real Estate Slump

Americans have grown markedly more negative in evaluations of their local real estate markets since earlier this year. Fully 56% say that home prices in their area have declined a little (32%) or a lot (24%). In early February, 41% said prices had fallen a little (23%) or a lot (18%).

Homeowners have a particularly gloomy assessment of their local real estate market. Currently, just 27% say prices have risen while 63% say they have fallen. In early February, homeowners were evenly divided, with 44% saying prices had risen and 45% saying they had dropped.

Fully 68% of those who have mortgages, and 55% of those who own their homes outright, say home prices have fallen in the past year; in February, 49% of mortgage holders, and 39% of those who own their homes outright, said that local home prices had declined. By contrast, just 42% of non-homeowners say prices have fallen, up more modestly from 32% in February

People who live in the West are more likely than those in other regions to say that local home prices have declined; 70% of those in the West say that, compared with 60% in the Midwest and about half of those in the South (49%) and East (49%).

But Most Expect Prices to Rise

Looking to the future, however, people are somewhat optimistic. More than half of Americans (54%) expect home prices to increase over the next few years. That is little changed since February, when 55% expected prices to rise.

Prospective views of the local real estate market vary little between homeowners and non-homeowners. However, among homeowners, somewhat more who have mortgages expect prices to rise than do people who own their homes outright (59% vs. 49%).

Politics: Obama Maintains Lead

In the general election matchup, Obama currently leads McCain by five points, 47% to 42%, among registered voters, a slightly narrower margin than Obama’s lead in June 2008 (48% to 40%). Both candidates continue to draw overwhelming support among voters in their own parties – 86% of Republicans support McCain and 81% of Democrats support Obama. Independent voters remain divided; roughly the same number say they would vote for the Democratic candidate (42%) as say they would vote for the GOP candidate (43%).

As was the case in June, Obama’s leads by wide margins among voters younger than 30 (56% to 36%); the least affluent (57% to 28% among those with family incomes under $30,000); African Americans (86% to 5%); and the religiously unaffiliated (61% to 30%). The Illinois senator also holds a double-digit advantage among women (50% to 39%) and Catholic voters (52% to 41%).

Among Democratic and Democratic-leaning voters who favored Hillary Clinton as the party’s nominee, slightly more now back Obama than did so a month ago. Nearly three-quarters of former Clinton supporters now prefer Obama (72%), up from just 59% in May.

However, 28% of those who supported Clinton say they will vote for McCain (17%), vote for someone else (1%) or are undecided (10%). McCain is favored by 88% of Republican and Republican-leaning voters who supported someone other than McCain for the party’s nomination

McCain also receives considerably more support than Obama among white voters, especially white evangelical Protestants. The Arizona senator holds a 50% to 40% margin among all white voters and an even wider 69% to 20% lead among white evangelical Protestant voters. McCain also performs better than his opponent among the most affluent; 50% of those with family incomes of $100,000 or more would vote for McCain if the election were held today and 40% would vote for Obama.

Solid majorities of supporters of both Obama and McCain continue to see their choice as a vote for their favored candidate and not as a vote against his opponent. About two-thirds of those who back Obama express affirmative support for him (68%) and just 25% say their vote in anti-McCain. Among McCain’s supporters, 59% say their choice is pro-McCain, while 35% describe it as anti-Obama. By contrast, fully half of John Kerry’s supporters said their choice was more anti-Bush than pro-Kerry in November 2004.

Gap in Strength of Support Narrows

While McCain continues to receive considerably less strong backing from his supporters than Obama does from his, the disparity in strong support for the two candidates has narrowed somewhat since last month. About a quarter of all voters now describe themselves as strong Obama supporters (24%), compared with 17% who say they back McCain strongly. In June 2008, twice as many voters said they supported Obama strongly as said the same about McCain (28% vs. 14%).

Of the 47% who back Obama over McCain this fall, about half (24% of voters overall) say they support him strongly and roughly the same number say they back him “only moderately” (22%). Last month, 28% said they supported Obama strongly, while 19% said they supported him only moderately.

Who Would the Candidates Favor?

One-in-five registered voters say that, if elected, Obama would do too much for African Americans, slightly more than say he would do too much for environmentalists (16%). When asked how different groups would fare if McCain were elected president, on the other hand, nearly half of all voters (45%) say he would do too much for the wealthy. By contrast, just 16% say McCain would do too much for Christian conservatives, a group that supports him over Obama by a double-digit margin; the same number say he would do too little for that group.

Perceptions that Obama would do too much for blacks are most pronounced among Republicans (31%), white evangelical Protestants (30%), and conservative voters (26%). Fully 76% of black voters say Obama would do about the right amount for African Americans while 8% say he would do too little.

White working class voters are considerably more likely than those with a college degree to say Obama would do too much for blacks. A quarter of less educated white voters say that is the case, compared with 16% of those who graduated from college. But white working class voters are even more likely to say McCain would do too much for the wealthy. Fully 43% say that is the case.

The view that McCain would do too much for the rich is shared by a solid majority of Democrats (64%) and 43% of independents, as well as by more than one-in-five Republican voters (22%). And while those with family incomes of $100,000 or more are somewhat less likely than those in lower income brackets to say this is the case, fully 39% in this group think the GOP candidate would do too much for the wealthy.

Conservative white evangelical Protestants are among the most likely to say John McCain would do about the right amount for Christian conservatives; six-in-ten express that view, roughly the same number that says Obama would do too little (57%). A sizeable minority in this group (24%) also says McCain would do too little for Christian conservatives.

Voters express starkly different views of how environmentalists would fare under a McCain or Obama administration. Only about four-in-ten (39%) say McCain would do the right amount for environmentalists; about the same percentage (40%) says he would do too little. A majority (56%) says Obama would do the right amount for environmentalists, while just 13% say he would do too little.

McCain’s Lead on Terrorism Narrows

McCain continues to hold a sizable advantage over Obama as the candidate who is seen as better able to defend the country from a terrorist attack, but the Republican’s lead has narrowed considerably since June. Currently, just under half of all voters (48%) say McCain would do the better job on terrorism, compared with 33% who choose Obama. Last month, McCain held a 55% to 31% lead on this issue.

The survey, which was conducted during Obama’s trip to Europe and the Middle East, also finds that voters are divided on the question of which candidate would to the better job on foreign policy. About the same number name McCain (43%) as name Obama (42%). And when it comes to making wise decisions on Iraq, in particular, McCain holds a narrow 44% to 41% advantage.

The economy remains Obama’s strength. The presumptive Democratic nominee holds a 15-point advantage over his opponent on this issue (47% to 32%). Obama held a slightly wider lead in June; 51% said he was better able than McCain to improve economic conditions and 31% preferred McCain on this issue.