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Burdened by the Weight of Inflation
Standards of Living Are Challenged

By Jon Cohen and Steven Mufson
Washington Post Staff Writers
Wednesday, May 14, 2008

Nearly seven in 10 Americans are worried about maintaining their standard of living, as concern has spiked higher in just the past five months, according to a new Washington Post-ABC News poll. Soaring consumer prices are a major challenge, with many people struggling under the weight of the rising costs of fuel, food and health care.

The poll shows that the weak economy and rising prices are high among voters' concerns, and contribute to a souring national mood in this presidential election year. More than eight in 10 said the country has veered pretty seriously off-track, and a separate poll released yesterday by ABC showed economic anxiety at its highest level on record since 1981.

Overall, 68 percent of people surveyed in the new Post-ABC poll said they were concerned about their ability to keep up their lifestyles, a jump of 17 percentage points since December. The increase cuts across party and income lines, spreading rapidly among Republicans, people from rural areas and those from middle- and upper-income households.

Nearly six in 10 of those from households with annual incomes of $100,000 or higher said they were worried about hanging onto their living standards, up from a third in December. And 56 percent of Republicans in the new poll expressed concern, up from 32 percent.

In the new poll, 20 percent of those surveyed cited the higher gasoline prices as the single most important economic issue, and more, about a third, pointed more generally to rising prices as the primary cause of their apprehension.

Overall, two-thirds called rising gasoline prices a financial hardship, including a third who said higher pump prices have proved to be a severe burden. According to the Energy Department, the average cost of gas has spiked 11 cents in the past week alone; it has gone up 33 cents over the past month.

"The $3.65 gas is killing us. The $2.75 gas was killing us. And, quite frankly, I don't see how the government can stand by and be completely idle and ruin the economy," said Tom Odle, 64, a Kansan who receives Social Security disability payments and whose wife works at a graphics firm. "What this is doing to us is to completely strip away our disposable income. It just goes for gas."

U.S. gasoline consumption has continued to grow gradually over the past five years even as crude oil prices have quadrupled, but there are some signs in the poll that prices have finally hit a level that is altering driving habits. Of those who called gasoline prices a burden, two-thirds said they have cut back at least somewhat on the amount of driving they do.

But those who have not pared back their car use -- more than half of all respondents -- said that, on average, the price of gasoline would need to reach $5.65 a gallon before they significantly curtailed their driving.

That figure may have broad repercussions for oil markets and people designing climate-change policy, who hope that higher pump prices will change driving habits enough to slash the greenhouse gas emissions that come from fuel use.

In the poll, big oil companies take the brunt of the blame for high motor fuel prices. Three in 10 people said that the oil companies or greed are the main cause of the rising costs, two in 10 pointed to market forces (including supply and demand), one in 10 blamed President Bush and 9 percent pointed at the Organization of the Petroleum Exporting Countries and other foreign oil producers.

"There's no oil shortage in this country. There's no gasoline shortage, and there hasn't been for years," said Odle, who added that he believes multinational oil companies were manipulating the markets.

While oil companies were a primary target across party lines, Democrats and independents were much more apt to blame the Bush administration and the Iraq war than were Republicans. Thirty-four percent of Democrats and 21 percent of independents singled out the Bush administration or the Iraq war as the major reason behind the higher pump prices; just 7 percent of Republicans agreed.

Beyond gasoline costs, three in 10 Americans polled said they were having trouble paying other household bills because of rising prices. Of those finding the inflationary pressures hard to deal with, more than half were struggling with food costs, two in 10 with the price of electricity, 15 percent each with medical costs and other household expenses, and 11 percent with their housing costs.

"It's food, it's everything," said Nancy Scala of Sherman, Conn., a poll respondent.

Louis Hand from Orlando was one of those who highlighted health-care costs. "We could be living better if we didn't have to pay those high costs for medical care and prescriptions," he said in a follow-up interview.

And while concern about the economy has spread most quickly among middle- and upper-income households, lower-income families are still the ones having the most trouble coping.

"We've had to cut back on a lot of stuff," said Stephanie Green, 30, of Mount Airy, N.C., after returning from a trip to a Bottom Dollar grocery store, where shoppers bag their own groceries to help keep food prices down.

"I used to spend about $120 a week to buy food. To be honest, now I spend anywhere from $200 to $220 a week," said Green, who has three children. And with the price of gasoline at $3.67 at her local service station, she said: "We're basically not going anywhere. We're going to get the kids, and besides that we don't go out of the house all week."

Despite widespread concern about fuel costs, Americans are evenly divided about whether it is a good idea to suspend the federal gas tax this summer, as proposed by two presidential candidates, Sens. John McCain (R-Ariz.) and Hillary Rodham Clinton (D-N.Y.). Forty-six percent of those surveyed supported the proposal; 47 percent opposed it. And when told about criticisms of the plan, which many experts say would do little to change prices while draining revenue away from federal highway projects, support for the idea dipped to 33 percent.

That may be good news for Sen. Barrack Obama (Ill.), who said he would oppose any effort to temporarily do away with the 18 cents-a-gallon federal gasoline taxes. The Democratic presidential hopeful called that a "gimmick."

The idea of a gasoline tax holiday failed to pick up majority support from Democrats, Republicans or independents, and presented with the information about the probable impact of the tax suspension, majorities across the board opposed the idea.

The poll was conducted by telephone May 8 to 11 among a random national sample of 1,122 adults. Results from the full survey have a margin of sampling error of plus or minus three percentage points; error margins are larger for subgroups.

Polling analyst Jennifer Agiesta contributed to this report.

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