Turmoil in the financial industry and growing pessimism about the economy have altered the shape of the presidential race, giving Democratic nominee Barack Obama the first clear lead of the general-election campaign over Republican John McCain, according to the latest Washington Post-ABC News national poll.
Just 9 percent of those surveyed rated the economy as good or excellent, the first time that number has been in single digits since the days just before the 1992 election. Just 14 percent said the country is heading in the right direction, equaling the record low on that question in polls dating back to 1973.
More voters trust Obama to deal with the economy, and he currently has a big edge as the candidate who is more in tune with the economic problems Americans now face. He also has a double-digit advantage on handling the current problems on Wall Street, and as a result, there has been a rise in his overall support. The poll found that, among likely voters, Obama now leads McCain by 52 percent to 43 percent. Two weeks ago, in the days immediately following the Republican National Convention, the race was essentially even, with McCain at 49 percent and Obama at 47 percent.
Last week's near-meltdown in the financial markets and the subsequent debate in Washington over a proposed government bailout of troubled financial institutions have made the economy even more important in the minds of voters. Fully 50 percent called the economy and jobs the single most important issue that will determine their vote, up from 37 percent two weeks ago. In contrast, just 9 percent cited the Iraq war as their most important issue, its lowest of the campaign.
But voters are cool toward the administration's initial efforts to deal with the current crisis. Forty-seven percent said they approve of the steps taken by the Treasury and the Federal Reserve to stabilize the financial markets, while 42 percent said they disapprove.
Anxiety about the economic situation is widespread. Just over half of the poll respondents -- 52 percent -- believe the economy has moved into a serious long-term decline. Eight in 10 are concerned about the overall direction of the economy, nearly three-quarters worry about the shocks to the stock market, and six in 10 are apprehensive about their own family finances.
Two weeks ago, McCain held a substantial advantage among white voters, including newfound strength with white women. In the face of bad economic news, the two candidates now run about evenly among white women, and Obama has narrowed the overall gap among white voters to five percentage points.
Much of the movement has come among college-educated whites. Whites without college degrees favor McCain by 17 points, while those with college degrees support Obama by 9 points. No Democrat has carried white, college-educated voters in presidential elections dating back to 1980, but they were a key part of Obama's coalition in the primaries.
The political climate is rapidly changing along with the twists and turns on Wall Street, and it remains unclear whether recent shifts in public opinion will fundamentally alter the highly competitive battle between McCain and Obama. About two in 10 voters are either undecided or remain "movable" and open to veering to another candidate. Nevertheless, the close relationship between voters' focus on the economy and their overall support for the Democratic nominee has boosted Obama.
Among white voters, economic anxiety translates into greater support for Obama. He is favored by 54 percent of whites who said they are concerned about the direction of the economy, but by just 10 percent of those who are less worried.
The survey also found that the strong initial public reaction to Alaska Gov. Sarah Palin, McCain's running mate, has cooled somewhat. Overall, her unfavorable rating has gone up by 10 points in the past two weeks, from 28 percent to 38 percent.
She remains broadly popular -- 52 percent of voters view her positively -- but there have been some notable declines. Over the past two weeks, the percentage of independents with favorable views of Palin dropped from 60 percent to 48 percent. Among independent women, the decline was particularly sharp, going from 65 percent to 43 percent. Her favorable rating among whites without college degrees remained largely steady, but among those with college degrees, it dropped nearly 20 percentage points.
The survey also showed some backsliding in enthusiasm among McCain supporters. Overall, most supporters of each presidential candidate said they are enthusiastic about their choice, but 62 percent of Obama supporters said they are "very enthusiastic," compared with 34 percent of McCain's supporters. Coming out of the GOP convention, nearly half of those backing McCain said they did so fervently.
Among Republicans, conservatives and white evangelical Protestants, strong enthusiasm for McCain's candidacy has dropped by double digits.
The survey, conducted Friday through Monday, included telephone interviews with a random national sample of 1,082 adults, including 916 registered voters. The margin of error for the full sample is plus or minus three percentage points; it is four points for the sample of 780 likely voters.
Overall, Obama and McCain are tied among men in the new poll, while Obama has opened up a sizable lead among women. The candidates divide white voters, 50 percent for McCain to 45 percent for Obama, while Obama has an overwhelming advantage among African Americans, 96 percent to 3 percent.
Independents, key swing voters, now break for Obama, 53 percent to 39 percent, reversing a small lead for McCain after the Republican convention. McCain is the choice of 86 percent of Republicans, while about as many Democrats, 88 percent, back Obama.
In the new poll, voters once again gave Obama higher marks than McCain when it comes to dealing with the economy, 53 percent to 39 percent. Two weeks ago, Obama's edge on the question was a narrow five points, his lowest of the campaign. Among independents, Obama's advantage on the economy -- now 21 points -- is greater than at any point in the campaign.
McCain's advantages on national security issues have also been blunted. Two weeks ago, when those surveyed were asked who they trusted to deal with a major unexpected crisis, McCain led 54 percent to 37 percent. That lead is gone.
Similarly, McCain's once-sizable advantage in dealing with the battle against terrorism has all but disappeared. There were also big shifts toward Obama on handling Iraq and international affairs more broadly.
The first presidential debate, set for Friday evening, is slated to focus on foreign policy and national security, but economic issues seem likely to be included, given the developments on Wall Street. The debate appears poised to draw record levels of attention, as interest in the election has been sky high and continues to grow. Almost all voters are tuned in, and 55 percent are following "very closely," higher than at this time in 2004 and more than double the percentage so engaged in 2000.
A substantial hurdle for Obama is the widespread public skepticism about whether he would make a good commander in chief. On that question, he has made no significant headway in allaying voters' concerns. They remain evenly divided -- 48 percent said he would be effective in that role, 47 percent said he would not. Nearly three-quarters said McCain would manage the military well, and as many said he has the knowledge of world affairs to serve effectively.
Still, the candidates are rated about equally on the question of who is the stronger leader.
In the aftermath of the national conventions and the surprise pick of Palin, McCain had narrowed the gap with Obama on who is more likely to change Washington. In the new survey, Obama has reestablished his credentials on that front. He also now holds a double-digit lead as the more honest and trustworthy candidate, flipping what had been a slight McCain edge two weeks ago.
Obama has also cemented a clear edge among voters prioritizing the economy, a growing group. Among "economy voters," he now leads McCain by nearly 2 to 1. McCain holds advantages among voters prioritizing a range of concerns that rank lower on the issues list, making it harder for him to find ways to drive the agenda of the campaign into favorable territory.
Polling analyst Jennifer Agiesta contributed to this report.