The study, "Democracy and the Policy Preferences of Wealthy Americans," by Benjamin I. Page and Jason Seawright of Northwestern and Larry Bartels of Vanderbilt, indicates the 1 percenters -- those with $8 million in net worth -- are more concerned about the deficit than other Americans, and are at odds with the 99 percenters, who largely support either expanding Social Security and Medicare or leaving those programs at least at current levels. The 1 percenters want to cut both, the study found, because "these programs are of little personal benefit to wealthy people. However, since they pay a lot of taxes, they are well aware of their costs," Page said.
With less than a week to go before $85 billion in across-the-board federal budget cuts kick in, the approach to deficit spending takes on particular significance.
The federal government has been outspending revenue for years. Total U.S. debt stood at $16.6 trillion as of Friday and showed no sign of abating, a situation that will have devastating effects in the future and already is degrading the nation's economic health.
At the same time, millions of elderly Americans count on Social Security and Medicare to survive, and with the baby boom moving into its golden years, the costs of those programs will escalate for the next two decades.
The opposition of the wealthy to expanding social welfare programs may account for "distinctive policy preferences [that] ... appear to deviate from what the majority of U.S. citizens want the government to do. If this is so, it raises serious issues for democratic theory," the study authors said, noting the wealthy exert more influence than ordinary citizens on politicians.
"We want to find out how they use their influence and what they seek from government, because what they seek may well have a good chance of being enacted," Page said in a news release.
"Most people suspect that the wealthy play a big role in American politics. Remarkably, though, we have never had any systematic evidence about their political preferences and behavior. This project begins to fill that gap," Bartels said.
The study, which involved 83 interviews (37 percent response rate) of wealthy Chicago residents in winter and spring 2011, conducted by the University of Chicago's National Opinion Research Center, indicated 87 percent of the wealthy call budget deficits a "very important" problem, with a third saying it was the most important, followed by unemployment and education (84 percent saying they were "very important"). Only 26 percent called inflation "very important" and 16 percent cited climate change.
By contrast, 53 percent of the general population responding to a CBS poll indicated the economy and jobs was the most important issue facing the country while 7 percent cited the deficit.
Among the programs the wealthy said they would like to see cut in addition to Social Security and Medicare were farm subsidies, foreign aid, defense spending, food stamps, healthcare, homeland security, environmental protection and jobs programs. Among the programs they would like to see expanded are public infrastructure improvements, scientific research and aid to education.
"We speculate that the striking contrast concerning core social welfare programs between our wealthy respondents and the general public may reveal something important about the current state of American politics," the authors said. "If wealthy Americans wield an extra measure of influence over policy making, and if they strongly favor deficit reductions through spending cuts -- including cuts in Social Security and Medicare -- this may help explain why a number of public officials have advocated deep cuts in the very social welfare programs that are most popular among ordinary Americans."
When it comes to Social Security, the general public (58 percent) is opposed to raising the age at which full benefits can be collected but is generally supportive (55 percent) of cutting benefits "for retirees with higher incomes." Forty-seven percent of the wealthy and 60 percent of the general public say they favor raising or eliminating the cap on wages subject to Social Security taxes. Thirty-six percent of the 1 percenters favor cutting back on Social Security, with only 3 percent favoring expansion.
As for wealth distribution, more than half the 1 percenters (56 percent) said they did not accept the argument a large disparity in income is "necessary for America's prosperity" and 62 percent said the "differences in income in America are too large." Rather than allowing the government redistribute wealth, however, the 1 percenters said they favor raising salaries.
The survey found support for reducing the salaries of hedge fund managers and chief executive officers by 54 percent and 43 percent, respectively, while respondents favored raising the salaries of unskilled and skilled factory workers by 14 percent and 15 percent, respectively.
"This would hardly amount to a 'leveling' of U.S. incomes, but it would significantly reduce the extent of income inequality in the United States," the authors said. "In each case for which we have comparable data the general public largely agreed, though it would go a bit further, with slightly bigger wage increases for salesclerks, unskilled factory workers and even doctors in general practice, but a slightly bigger wage cut for CEOs."
Warren Buffett notwithstanding, the majority of the wealthy rejected higher taxes.
Ordinary citizens, favor increased regulations on big corporations, higher corporate income taxes and heavy taxes on the wealthy.
"Under our tax system -- in which effective rates remain mildly progressive or at least proportional to income -- a wealthy American can be forced to pay millions of dollars in taxes to fund programs that he or she views as yielding only meager benefits," the authors concluded. "By the same token, when it comes to dealing with budget deficits, the wealthy may [in material terms] have less to lose from spending cuts than from tax increases, and wealthy bond owners may be particularly wary of deficit-induced inflation that would undercut bond values.
"Of course we should also consider a very different interpretation: that the distinctive policy preferences of wealthy Americans may reflect better information, deeper thinking about the problems facing the country, and a clearer-headed understanding of economic and social reality than most citizens have -- including the possibility that government may often be incapable of achieving what we would like it to achieve.
"Perhaps our wealthy respondents [most of them highly educated and quite attentive to politics] are right to think that government jobs programs don't work, that education is more likely to be improved by market-oriented reforms than by major increases in spending on public schools or college scholarships, that citizens can provide for their own healthcare, that economic markets can mostly regulate themselves efficiently, and that budget deficits currently present a greater danger to the United States than joblessness does."