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Senator Schumer Geoff Garin November 21, 2012 The New Focus on Income Inequality and the Impact on Democrat Prospects for 2012

There are many reasons why the dynamics of the 2012 congressional elections will be fundamentally different from those that drove the outcome in 2010. For starters, the 2010 election was almost solely a referendum on Democratic stewardship of the government, and attitudes toward the Republicans in Congress were inconsequential in shaping the outcome. Now, the congressional Republicans have made themselves a much more visible and important reference point (and target) in voters political considerations, and the verdict on the Republicans is decidedly negative: By 69% to 22%, the public disapproves of the performance of the Republicans in Congress (Fox News, October 23-25, 2011); By 46% to 31%, the public expresses negative feelings toward the Republican Party, while a slight plurality (40% to 38%) expresses a positive feeling toward the Democratic Party (NBC-Wall Street Journal, November 2-5, 2011); Three-quarters of the public disapprove of the way Republicans in Congress are handling the economy, including a majority of 54% who strongly disapprove (ABC-Washington Post, September 29-October 2, 2011); Seventy-two percent say that the Republicans in Congress are not doing enough to cooperate with President Obama when it comes to solving the countrys economic problems (compared to 47% who say Obama is not doing enough to cooperate with the Republicans) (AP-Roper, October 13-17, 2011).

There is an even more significant factor in understanding why the 2012 congressional election cycle will be so substantially different from the 2010 cycle: The growing importance of income inequality in defining the debate over the economy, and the publics strong concerns about the decline of the middle class. The success of the Republican Party in the 2010 midterm elections was based to a large extent on the ability of the Republicans, aided by the activism of the Tea Party movement, to focus voters attention on an anti-government narrative that blamed the countrys economic problems on excessive federal spending, the size of the national debt, and increased government involvement in the private economy. Recent polling, however, indicates that the Republican/Tea Party narrative about the economy has been superceded by a different narrative one that emphasizes the need to address the growing gap between those at the very top of the economic ladder and the rest of the country. For example, the most recent NBC-Wall Street Journal national survey (November 35, 2011), asked respondents for their reactions to two very different statements about government and the economy. Registered voters were nearly twice as likely to express strong agreement with the statement about the need to address income equality than the one focused on reducing government spending and regulation.
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Memorandum to Senator Schumer November 21, 2011 Statement A (size of government): The national debt must be cut significantly by reducing spending and the size of government, including eliminating some federal agencies and programs. Regulations on business by the federal government should be reduced and instead, the private sector and individuals should have greater control. The government should not raise taxes on anyone. Statement B (income inequality): The current economic structure of the country is out of balance and favors a very small proportion of the rich over the rest of the country. America needs to reduce the power of major banks and corporations and demand greater accountability and transparency. The government should not provide financial aid to corporations and should not provide tax breaks to the rich.

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Thirty three percent strongly agree with the statement that the defining problem with the economy today is too much government, another 20% somewhat agree with it, and 32% disagree. By comparison, 60% strongly agree with the statement that defines Americas economic problem around policies that favor the rich over the rest of the country (while another 15% somewhat agree and only 12% disagree). As the following chart shows, the income inequality statement is far more resonant than the size of government statement among independent voters, and is far more likely to cut across party lines. Percent Expressing Strong Agreement Statement A Statement B (Size of government) (Income inequality) All registered voters 33 60 Democrats 14 72 Independents 30 62 Republicans 57 42 The strength of the narrative about the need to redress policies that favor the very rich over the rest of the country makes perfect sense in the context of other recent public opinion research findings. For example, a 55% majority of likely voters believe that income inequality in the United States is a big problem today, while another 19% say it is somewhat of a problem. Two-thirds of Democrats feel that income inequality is a big problem, and 48% of Republicans feel that way as well. (Pulse Opinion Research for the Hill, October 27, 2011) Three-fifths of Americans believe that the gap between the wealthy and everyone else is larger today than it has been in the past, while only 5% say it is smaller now than in the past. (ABC-Washington Post, October 31-November 3, 2011) Moreover, there is an overwhelming view that the middle class is shrinking in America today, and for many Americans this experience is entirely personal and not merely theoretical.

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Memorandum to Senator Schumer November 21, 2011

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Two-thirds of likely voters say the middle class is shrinking, compared to just 14% who say it is growing. This view of a shrinking middle class cuts across age, gender, income, ideology, and political party. (Pulse Opinion Research for the Hill, October 27, 2011). Americans come to this perspective on the decline of the middle class against the backdrop of their own economic experiences. Two-thirds of Americans say they are now worried about their ability to maintain their current standards of living (31% say they are very worried about this), and half of all Americans lack confidence that they will have enough income and assets to last them through their retirement. (ABCWashington Post, October 31-November 3, 2011) From the perspective of policy, there is a huge gap between what the public wants the government to do and the positions of the Republican Party on those issues. The Republicans, for example, dismiss any effort to address the economic imbalance in the country as class warfare. But by 60% to 35% Americans favor government taking steps to reduce the gap between the rest of America. (ABC-Washington Post, October 31-November 3, 2011). Fully 76% of the public favor increasing the taxes of people who make over a million dollars a year, and 63% favor increasing the taxes of people who make over $250,000 a year. (CNN, October 14-16, 2011). While 78% say it is a good idea to cut taxes for small businesses, 67% say it would be a bad idea to cut taxes for large corporations. (CBS-NY Times, October 19-24, 2011) For 2011, the electoral importance of these finding is that the public has a clear understanding that, at a time when the rich are doing well and everyone else is struggling, the Republicans have aligned themselves squarely with those at the very top. Fully 69% of Americans say that the policies of the Republicans in Congress favor the rich, compared with just 9% who say they favor the middle class, 2% who say they favor the poor, and 15% who say the GOPs policies favor all groups equally. By way of contrast, 28% identify President Obamas policies as favoring the rich, 17% see him as favoring the poor, and 44% say his policies benefit the middle class or all groups equally. (CBS-NY Times, October 19-24, 2011)

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