Analysis: Voters favor lower spending to close deficit

WASHINGTON (Reuters) - Faith in President Barack Obama's prescriptions to drag the economy out of recession appears to be falling as the Republican message hits home among voters, a Reuters/Ipsos poll showed on Tuesday.

Voters are concerned about high levels of government spending and the deficit, but are not keen on administration plans to let tax cuts for the rich expire this year to help close the fiscal gap.

The implication seems to be that Americans want the deficit tackled through lower spending rather than through higher taxes.

Here are some key interpretations of the poll results.

* Faith in Obama to tackle the nation's economic woes was a key factor in his winning the presidency over Senator John McCain, but is fast becoming his Achilles heel after a Republican assault on his record.

Last month's Reuters/Ipsos poll found Obama's approval rating for his economic leadership was lower -- and deteriorating faster -- than on any other issue.

* This month's poll gives some more clues as to why this is the case. Unemployment and government spending topped voters' economic concerns, with 72 percent and 67 percent of respondents saying they were very worried over those issues respectively.

Republicans have been trying to convince voters that last year's deficit-financed economic stimulus was not effective in reducing unemployment and ending the recession, and this argument may be striking home.

* Voters said they were more concerned about tackling the budget deficit than lowering taxes -- but there was limited support for letting the Bush tax cuts expire.

Nearly half of respondents, 49 percent, said current tax rates should be maintained for all Americans. In total 46 percent said the tax cuts should be allowed to expire for everyone, or just for people earning over $200,000 a year.

This could be a problem for Democrats as they argue the tax cuts should be allowed to expire only for high income earners.

* There is also a widespread feeling Washington no longer works. Although Republicans get more of the blame for this, that feeling would be dangerous for the Democrats if they are perceived by voters as the party of big spending and big government.

* Registered voters were marginally more likely to vote Republican than Democrat in the mid-terms. But other Reuters/Ipsos polls have found a much wider gap in terms of people likely to actually vote, with Republicans doing a much better job energizing voters.

(Editing by Jerry Norton)