The Corner

Bailing on the Bailout?

Robert Moran e-mails:

Survey Finds Washington Opinion Elites Split on Bailout Plan With Support Eroding

Majorities predict bailout plan will be heavily amended and that more will be needed later

WASHINGTON, DC, September 24, 2008 – StrategyOne’s Beltway Barometer survey of 412 Washington, DC policy makers and shapers finds support for the initial $700 billion bailout plan split along party lines, but eroding over the course of the two night survey.

In the survey, 67% of beltway Republicans supported the administration’s bailout plan and 33% opposed.  Beltway Democrats were split, with 47% supporting and 53% opposing.  However, support for the bailout plan eroded between Monday night and Tuesday night, as Democratic support dropped from 61% to 40% and Republican support dropped from 73% to 63%.

“The trend in the overnight results suggests that support for the $700 billion bailout is eroding.  In fact, it’s a tale of two nights, Monday night when elites were very concerned and reviewing the plan and Tuesday night after they had reviewed it”, said Robert Moran, Executive Vice President at StrategyOne.

While Washington opinion elites may not agree on a bailout strategy, they do appear to agree that the administration’s proposal will be heavily amended and that more will be needed later.  68% of Republicans and 77% of Democrats surveyed believe that any bailout plan will have “significant amendments” and not pass in the “streamlined form” the administration is pressing.  More troubling is the finding that wide majorities of Washington elites think that even with a bailout plan in place, more action will be needed later.  86% of Democrats and 70% of Republicans in this survey said “more will be needed later” as opposed to the 14% of Democrats and 30% of Republicans that thought an autumn bailout “will be enough to solve the problem.” 

Washington opinion elites are split on whether a bailout for the financial sector increases or decreases the likelihood of near-future bailouts for other industries. Among Republicans 47% say a financial sector bailout makes other industry bailouts more likely, while 53% say it makes other bailouts less likely.  Among Democrats 39% say a financial sector bailout makes other industry bailouts more likely, while 61% say it makes other bailouts less likely.

One thing these elites are NOT split on is the likelihood of future financial services regulation.  80% of Republicans and 85% of Democrats say the next Congress “will spend significant energy on financial services regulation.” 

Beltway Republicans and Democrats have very different opinions about where the economy is headed over the next 2 years, with Republicans (66% growth – 27% recession) much more optimistic than Democrats (35% growth – 59% recession).  In fact, significant Democratic pessimism over the short term prospects for the economy may be the fear that keeps congressional Democrats at the negotiating table. 

Finally, although some writers have explored this crisis within the context of American international dominance, a majority of beltway elites in both parties (85% of Republicans and 61% of Democrats) disagree with the notion that “this financial crisis marks the end of American international dominance.” 

(More here and here.)

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