April 26, 2010 -- Two-thirds of Americans support stricter federal regulation of banks and other financial institutions, and by a double-digit margin the public trusts President Obama more than the Republicans in Congress to handle financial reform, which could be a caution flag for the GOP in an election year.
The public supports reform overall by 65-31 percent, a broad margin that's been steady since midwinter, and trusts Obama more than the Republicans to handle financial reform by 52-35 percent, a 17-point advantage for the president in this new ABC News/Washington Post poll.
Nonetheless there is opportunity for Republican pushback -- if not in whether reform should occur then in how extensive it should be. Among supporters of regulation, half say it should be "much" stricter, half less so, reflecting room for debate on the extent of the changes to be enacted.
Additionally, while Obama leads the Republicans in trust to handle the issue, that doesn't mean his own rating on financial reform is good: The public splits evenly, 48-48 percent, on how he's handling it. He does far better among those who favor much stricter reform, but less so among those who prefer more modest changes (and, of course, poorly among those who oppose the idea entirely).
Democrats are pushing the issue in Congress, with a key procedural vote expected today.
Among individual elements of reform, most popular is one that hits closest to home for most Americans -- increasing federal oversight on consumer loans and credit card terms, with 59 percent in favor, 38 percent opposed. The public by 53-42 percent also favors creating a bank-funded liquidation fund to deal with large financial institutions that fail.
But another element, regulating the financial instruments known as derivatives, gets a split decision, 43-41 percent; a substantial 17 percent have no opinion, perhaps reflecting the complexity of the subject. Support for regulating derivatives peaks, at 59 percent, among better-off Americans, with household incomes over $100,000 – a group with greater exposure to the equities markets.
Poll: Divisions on Financial Reform
DIVISIONS – On trust to handle financial regulation overall, Obama does better both in his base and among independents. Democrats, by 85-10 percent, prefer Obama over the Republicans in Congress to handle the issue; Republicans favor their party's leaders, but by 74-11 percent, with somewhat more distrusting either side. Independents side with Obama by 47-35 percent.
Support for stricter regulation overall also has strong partisan and ideological components. It ranges from 80 percent among Democrats to 43 percent among Republicans, and likewise from 81 percent of liberals to 48 percent of conservatives. But the fact that it approaches 50 percent support among conservatives underscores its popularity overall. In the center, financial reform is backed by 69 percent of independents and 74 percent of moderates in this survey.
Obama himself does less well in the center; his handling of financial regulation gets just 46 percent approval from independents, although he does somewhat better, 55 percent, among moderates. Both figures are well below the levels of support in these groups for regulation in principle, apparently reflecting some disquiet not with the concept, but with Obama's approach. As noted, Obama's approval on the issue is 14 points higher among those who favor "much" stricter regulation vs. those who say it should be just somewhat stricter.
WALL STREET – This poll does not replicate a Gallup result last week in which regulating "Wall Street" was somewhat more popular than regulating "large banks and major financial institutions" (the former won 50-36 percent support, the latter, 46-43 percent). As asked in this poll, reform won nearly two-thirds support regardless of whether it was reform of "Wall Street firms" or of "banks and other financial institutions."
Gallup found lower support overall, in both cases. Its question referred to "Congress passing a law" giving the federal government "new powers." The ABC/Post question does not mention Congress, which is very unpopular, and asks about "stricter regulations," which apparently are preferable to "new powers." Regardless of the phrase "Wall Street," the difference underscores that in these debates, language can matter.
METHODOLOGY – This ABC News/Washington Post poll was conducted by telephone April 22-25, 2010, among a random national sample of 1,001 adults, including landline and cell-phone-only respondents. Results for the full sample have a 3.5-point error margin. Click here for a detailed description of sampling error. Sampling, data collection and tabulation by TNS of Horsham, PA.