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‘START OVER FROM SCRATCH’: NOBEL LAUREATE ECONOMISTS DENOUNCE GOP
BUDGET BILL  
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Brett Wilkins
June 2, 2025
Common Dreams
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_ "The House bill addresses none of the nation's key economic
challenges usefully and exacerbates many of them." _

Day Of Action Protests Across The Country Criticize Trump And DOGE
Policies A woman holds a sign expressing fear of cuts to Medicare,
Medicaid, and Social Security, at an April 5, 2025 protest against the
Trump administration in Riverside, California. , David McNew/Getty
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Half a dozen Nobel Prize-winning economists on Monday expressed their
"grave concerns" about the sprawling budget reconciliation package
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last month by the Republican-controlled U.S. House of Representatives,
warning that slashing an already frayed social safety net and
exploding the record deficit in service of massive tax cuts for the
wealthiest households will worsen the nation's economic woes.

"The most acute and immediate damage stemming from this bill would be
felt by the millions of American families
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losing key safety net protections like Medicaid and Supplemental
Nutrition Assistance Program (SNAP) benefits," Daron Acemoglu, Peter
Diamond, Oliver Hart, Simon Johnson, Paul Krugman, and Joseph Stiglitz
wrote in an open letter
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published by the Economic Policy Institute
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progressive think tank in Washington, D.C.

"The Medicaid cuts
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step backward in the nation's commitment to providing access to
healthcare for all," the economists continued. "Proponents of the
House bill often claim that these Medicaid cuts can be achieved simply
by imposing work reporting requirements on healthy, working-age
adults. But healthy, working-age adults are by definition not heavy
consumers of health spending, so achieving the budgeted Medicaid cuts
will obviously harm others as well."

Addressing the bill's staggering impact
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public debt, the letter asserts that "U.S. structural deficits are
already too high, with real debt service payments approaching their
historic highs in the past year."

"The House bill layers $3.8 trillion in additional tax cuts
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trillion if all provisions are made permanent) on top of these
existing fiscal gaps—and these tax cuts are overwhelmingly tilted
toward the highest-income households," the Nobel laureates noted.
"Even with the safety net cuts, the House bill leads to public debt
rising by over $3 trillion in coming years (and over $5 trillion over
the next decade if provisions are made permanent rather than phasing
out). The higher debt and deficits will put noticeable upward pressure
on both inflation and interest rates in coming years."

"The combination of cuts to key safety net programs like Medicaid and
SNAP and tax cuts disproportionately benefiting higher-income
households means that the House budget constitutes an extremely large
upward redistribution of income
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the economists warned. "Given how much this bill adds to the U.S.
debt, it is shocking that it still imposes absolute losses on the
bottom 40% of U.S households
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"The United States has a number of pressing economic challenges to
address, many of which require a greater level of state capacity to
navigate—capacity that will be eroded by large tax cuts," the letter
concludes. "The House bill addresses none of the nation's key economic
challenges usefully and exacerbates many of them. The Senate should
refuse to pass this bill and start over from scratch on the budget."

The so-called Big Beautiful Bill is now in the Senate, where Minority
Leader Chuck Schumer (D-N.Y.) has vowed
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on behalf of Democrats to "fight it with everything we've got."

"The Republican plan is simple: Sell out working and middle-class
families to pay off the rich and well-connected," Schumer said in a
"dear colleague" letter on Sunday. "The bill would raise costs and
taxes by an average of more than $800 for 40% of American families.
Twenty million Americans would see their healthcare costs skyrocket,
while almost 14 million would lose their health insurance all
together, including millions of children and seniors."

Furthermore, Schumer noted that "11 million people, including 4
million children, could lose access to safe and affordable food, while
every one of the 40 million Americans receiving federal food
assistance would get less support every month. All the while, their
radical plan would see double-digit energy cost increases for American
households and businesses, and threaten close to 800,000 good-paying
jobs in the clean-energy economy."

"Their entire agenda," Schumer said of Republicans, "can be boiled
down to this: Billionaires win and families lose."

 

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