Poll Finds Public Wary on Tax Cut

Majority Hold Bush Responsible For Dwindling Budget Surplus

A majority of Americans say they are prepared to roll back President Bush's $1.35 trillion tax cut to help deal with the shrinking federal budget surplus and say Bush more than congressional Democrats bears responsibility for a problem that has suddenly put him on the defensive, according to a new Washington Post-ABC News national survey.

The poll also offered a clear warning to Bush and Congress as they move toward dipping into the Social Security surplus to fund other programs this year and next, despite earlier promises not to do so. An overwhelming 92 percent of those surveyed said they opposed using Social Security funds for other purposes -- with 81 percent saying they are strongly opposed.

Given a menu of options for dealing with the disappearance of the non-Social Security surplus, from tapping Social Security to reducing spending on domestic or national security programs, the only choice that drew majority approval was reducing the size of the tax cut, with 57 percent saying they would support that course of action.

Overall, Bush still enjoys the support of a majority of Americans, with 55 percent saying they approve of how he is handling his job. That is a relatively healthy ranking given other conditions but represents a decline of 6 percentage points over the past month and puts Bush where he was late last spring. In most other respects, the new survey signals the public's growing impatience with the way Bush and his Republican allies in Congress are dealing with the weak economy.

Gloomy economic news, from Friday's sudden jump in the unemployment rate to continued turbulence on Wall Street, has generated a sharp spike in public pessimism about the economy, forcing Bush to step up his focus on the problem and triggering a debate within the GOP about how to respond.

The poll found that only 33 percent of those surveyed have a positive view of the economy, a 17-point drop since late July and a 37-point drop since January, when 70 percent of those surveyed gave the economy positive ratings. A narrow majority said the country is heading into a recession, although that represents no change in the past month.

Fewer than half -- 48 percent -- approved of the way Bush is handling the economy, marking the first time that the president's standing on this key measure has dipped below 50 percent. Only 46 percent approve of his handling of the budget, down 7 percentage points since July. More Americans now trust the Democrats in Congress (50 percent) than Bush (44 percent) to deal with the economy.

A total of 1,009 randomly selected adults were interviewed Sept. 6-9. The margin of sampling error for the overall results is plus or minus 3 percentage points.

The poll comes after several weeks of bad economic news and revised estimates by the administration and the Congressional Budget Office showing that virtually all of the projected non-Social Security budget surplus has disappeared for the next four years.

Budget director Mitchell E. Daniels Jr. warned congressional Republicans on Friday that it was likely the government would tap the Social Security surplus this year, contradicting what he had been saying only a few weeks earlier.

The federal government is still running a healthy budget surplus, but virtually all of it is being generated by the Social Security program. Using the Social Security surplus for current programs would have no impact on benefits being paid to current recipients. But many politicians have said the funds should be used to pay down the national debt to help prepare for the retirement of the baby-boom generation. As a result, it will take a vigorous job of political salesmanship to explain why it is now good policy to tap the Social Security surplus.

At this point, the American people do not see the shrunken surplus as a huge problem, even though it is causing concern at both ends of Pennsylvania Avenue. Only about one third of those surveyed said they worry a great deal or a good amount about the new surplus estimates, and they say the economy and the tax cut are roughly equal causes of those smaller surpluses. But when asked who is more responsible for what has happened to the surplus, Bush or congressional Democrats, those surveyed said Bush by 52 percent to 38 percent.

If the surplus projections do not alarm the public, the larger economic woes present Bush with the most difficult problem of his still-young presidency. Without an economic turnaround, congressional Republicans worry that they will lose seats in the House and Senate in next year's midterm elections.

The poll suggests that the public so far is not impressed with Bush's signature prescription for the economy, the 10-year $1.35 trillion tax cut approved in May. Even as the rebate checks continue to arrive in mailboxes around the country, six in 10 surveyed said they do not believe the tax cut has had an impact on the economy to date. Twenty-one percent said it has hurt and 18 percent said it is helping.

Bush could find himself at odds with the public as he and his congressional allies seek to jump-start the economy. Bush has not wavered in his assertion that the tax cut is the right policy, but the survey also found that 57 percent of those interviewed were willing to give back at least a portion of the tax cut to preserve some of the budget surplus. That figure includes a majority of Democrats and independents but also nearly half -- 47 percent -- of all Republicans.

Nearly half -- 46 percent -- would drop plans to increase military spending to deal with the rapidly shrinking surplus, including a majority of Democrats as well as four in 10 independents and Republicans. Defense Secretary Donald H. Rumsfeld has argued that the Pentagon needs "every nickel" of new spending and the president has shown no willingness to bargain away any of the new money.

Lopsided majorities oppose scaling back proposed increases for education or prescription drug benefits for senior citizens, although the surplus projections will make it very difficult to fund a big prescription drug program.

Bush receives his strongest ratings on education, where 61 percent of those surveyed approve of the way he is handling the issue. House and Senate negotiators are still working on Bush's education reform bill.

The president also enjoys majority support for the way he is handling foreign policy and defense issues and about half of those surveyed said they approve of his handling of the patients' rights issue and the environment. Bush stumbled on the environment earlier in the year but over the past three months his ratings have improved steadily.

But half of those surveyed said they disapprove of his handling of Social Security and energy issues and 56 percent said they disapprove of how he is handling prescription drugs, which was one of the most important issues in last year's presidential campaign.

At this point in the Bush presidency, the public favors Democrats over the president on the economy, the environment, energy, patients' rights, Social Security and prescription drugs. Bush leads the Democrats on foreign affairs, defense and education, the last a significant accomplishment for a Republican.

The public remains evenly divided over whether Bush or the Democrats should take the lead in charting the direction of the country, with 41 percent saying Bush and 42 percent saying the Democrats.

Assistant director of polling Claudia Deane contributed to this report.