width=398Broad public concern about the U.S. budget deficit and big election gains for Republicans on November 2 could boost prospects for agreement on ways to slash spending, speakers told the Reuters Washington Summit.

A Reuters/Ipsos poll released on Tuesday found a majority of Americans support cutting the deficit as a way to improve the tough economy and believe it will help create jobs.

From more stimulus to tax cuts, opinion is divided on how to combat high unemployment and fire up the economy after the worst U.S. downturn since the 1930s. But the pressure is rising to find consensus on how to deal with the annual budget deficit of nearly $1.5 trillion.

A report in December from President Barack Obama's deficit commission promises to intensify the debate next year and a new Congress that could be controlled by Republicans will consider any proposals.

The combination could create real momentum for deficit reduction and ease growing worries about an issue that has helped fuel a Republican resurgence this year.

The public is anxious. You've almost doubled the debt in 18 months, said Bruce Josten, the top lobbyist for the U.S. Chamber of Commerce.

Josten said a debt reduction plan inspired by the commission could be combined with a debate on a restructured tax system if Congress agrees to temporarily extend Bush-era tax cuts expiring at the end of this year.

I say that holds some potential because it's a way to marry good with bad, as it's going to be perceived, benefits with pain, Josten said. Because it's not going to be a pain-free exercise.

With economic worries dominating the run-up to the congressional election in November, the poll showed 57 percent of Americans want the government to cut the deficit despite the hard economic times, while 39 percent support deficit spending to stimulate the economy.

That could be bad news for Obama and his fellow Democrats, who backed an unpopular $814 billion stimulus spending package designed to ease joblessness. Obama this month proposed more measures costing $180 billion over the next 10 years to encourage growth and hiring.

But the poll found three quarters of Americans believe persistently high unemployment -- 9.6 percent last month -- is a sign something in the economy is broken. Only 22 percent thought it was part of the natural economic cycle.

The message from Obama and Democrats on job growth and government spending is not resonating with Americans, said Ipsos pollster Julia Clark. The economy is the number one issue and more people are in line with Republican rhetoric on this than with the Democrats.


Both parties have said they will address the growing budget deficit after the election. White House spokesman Robert Gibbs told the Reuters summit on Monday there would be an attempt to work with Republicans.

On fiscal restructuring, the president will put some ideas and some issues on the table and we'll see if the Republican Party is serious about meeting him halfway, Gibbs said.

The sour public mood and low approval ratings for Obama -- at 47 percent in the new poll, up 2 percentage points -- have helped move Republicans into position to gain control of the House of Representatives and perhaps even the Senate.

Republicans have attacked Democrats as big-spending budget busters and Obama for failing to rein in unemployment, giving rise to the conservative Tea Party movement.

The loosely organized group has grown in strength through the year, knocking off a handful of establishment Republicans in primary elections by pushing an agenda focused on reducing spending, cutting taxes and limiting government.

Republicans and Democrats are butting heads over the expiring tax cuts enacted under former President George W. Bush. Obama wants to renew the lower rates for families making less than $250,000 but let the lower rates for wealthier Americans expire.

Obama and Democrats argue that keeping the tax cuts for the wealthy would increase the budget deficit by $700 billion over a decade.

The poll found 68 percent of registered voters think lowering taxes creates jobs and 60 percent think reducing the budget deficit creates jobs. Only 50 percent believe government spending creates jobs.

These are deep-held beliefs for people. I don't think attitudes on this are very changeable no matter what Obama or Democrats may say, Clark said.

Lowering taxes and the budget deficit to help the economy drew support from majorities among Democratic and Republican voters alike in the poll. About three-quarters of Democrats believed more government spending created jobs but only 27 percent of Republicans did.

(Additional reporting by Andy Sullivan and Richard Cowan; Editing by John O'Callaghan)