Americans think government could harm economy

WASHINGTON Tue Jan 8, 2013 8:16am IST

The U.S. Capitol Dome is seen behind the entrance to the U.S. Senate (R) on Capitol Hill in Washington, November 9, 2012. REUTERS/Larry Downing/Files

The U.S. Capitol Dome is seen behind the entrance to the U.S. Senate (R) on Capitol Hill in Washington, November 9, 2012.

Credit: Reuters/Larry Downing/Files

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WASHINGTON (Reuters) - Last week's "fiscal cliff" deal did little to ease fears among Americans that Washington could harm the U.S. economy or their personal finances in the months to come, according to a Reuters/Ipsos poll released on Monday.

The online poll found that President Barack Obama gets more credit than his Republican adversaries for the agreement, which canceled across-the-board tax increases and postponed broad spending cuts that could have pushed the economy back into recession.

But the deal did little to instill confidence about the nation's economic direction as Republicans and Democrats prepare for more showdowns over taxes and spending in the coming months, the poll found.

"If you had to score it, the Democrats and especially Obama, came out better, but there's a lot of uncertainty," said Ipsos pollster Clifford Young. "There's no clear winner from this."

More than two-thirds of those surveyed said they were concerned that their taxes could rise, or their benefits could shrink, while 81 percent said they were worried that the economy could take another downturn.

More than three in four said they were concerned that Congress would not be able to avert deep spending cuts to military and domestic programs that were postponed for two months in the fiscal-cliff deal, the poll found.

And 70 percent said they were concerned that the United States could default on its debt. Congress will have to raise its $16.4 trillion debt ceiling by early March to avoid a first-ever default, which would upend global financial markets.

Obama and Republican leaders initially hoped to resolve all of these issues in a "grand bargain" that would have combined tax increases and benefit cuts to put the country's finances on a sustainable course, but in the end they had to settle on a smaller deal that left many issues unresolved.

Still, the deal did allow Obama to fulfill a central campaign promise by raising taxes on top earners - in this case, individuals making more than $400,000 a year and couples earning more than $450,000. About 33 percent of those polled said Obama or his fellow Democrats deserved the most credit for the deal.

Only 11 percent of those surveyed said Republicans should get credit for the agreement. The plan passed with support from both parties, but many Republicans voted against it on the grounds that it should have included spending cuts.

The deal was not exactly a clear triumph for Obama's Democrats, however: 28 percent of those surveyed said they were not sure which side should get more credit, and another 22 percent said both parties were responsible.

"It's very clear people are still uncertain," Young said. "They're worried that until there's a final deal, are we going to go through this again?"

(Editing by David Lindsey; Editing by David Brunnstrom)

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