May 28, 2024


“This historic legislation makes critical investments in energy, health care and supporting the nation’s tax system. These investments will fight inflation and lower costs for American families while setting the stage for a strong, stable and broad shared long-term economic growth,” 126 economists said in a letter sent to congressional leadership Tuesday, first obtained by CNN.

The letter was signed by key economists including former Clinton Treasury Secretary Robert Rubin and Obama Treasury Secretary Jack Lew, Obama Labor Department Chief Economist Betsy Stevenson, Moody’s Analytics Chief Economist Mark Zandi, former director of the Congressional Budget Office, Doug Elmendorf and the Nobel Prize winning economist. Joseph Stiglitz, among others.

“This started to come together late last week with some of the signatories connecting with each other to discuss how they could emphasize the economic value of the bill and push back on some of the economic misinformation around it,” a source familiar with the letter. .

Economists supported the bill’s historic $369 billion in investments to combat the climate crisis and, they wrote, “will quickly and substantially reduce health care costs for families” by allowing Medicare to negotiate certain prescription drug prices, along with expansions to expanded Affordable Care Act Subsidies.

Those investments, the group wrote, “will be more than fully paid for,” pointing to its forecast of a 15 percent minimum tax on some companies.

“This proposal addresses some of the country’s biggest challenges on a significant scale. And because it reduces the deficit, it does so while putting downward pressure on inflation,” the economists said.

That relief comes as prices continue to rise, with inflation hitting 40-year highs. The latest data from the Bureau of Labor Statistics shows inflation jumped to a pandemic-era peak in June, with US consumer prices rising 9.1% year-over-year.
The bill, negotiated by moderate Democratic Sen. Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer of New York, is currently on a technicality with the Senate lawmaker known as “Byrd Bath,” a test which is designed to keep out extraneous provisions from legislation using the conciliation process. Once the legislation goes through that process, Democrats should be able to pass the bill with a simple majority. It remains to be seen, however, whether key Sen. Kyrsten Sinema, a moderate Democrat from Arizona, will vote with her party on the legislation.

Schumer said Monday that he expects the congressional process to be completed and the Senate to vote on the bill this week before the August recess.

“This week the Senate will take action on a groundbreaking bill, the likes of which we haven’t seen in decades,” he said on the Senate floor. “Over the next few days, both sides will continue conversations with the congressman to move the bipartisan ‘Byrd bath’ process forward. Our timeline has not changed, and I expect to bring this legislation to the Senate for a vote this week.” .”

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Some economists said the legislation would do little to curb skyrocketing prices, especially in the short term. Moody’s Analytics estimates the legislation would have a “small” effect on inflation, and the Penn Wharton Budget Model also showed it would have little effect on prices.
And Senate Republicans who oppose the legislation point to an analysis by the nonpartisan Joint Committee on Taxation, which said the bill would raise taxes on Americans.
Kimberly Clausing, one of the letter’s signatories and an economist at the UCLA School of Law, disputed the JCT’s analysis, suggesting tweet that it was incomplete.

“Several key factors are omitted from these tables, including, notably, the effects of deficit reduction, the positive effects of clean energy spending, and the benefits of lower drug prices,” Clausing wrote.

CNN’s Tami Luhby, Matthew Egan and Ali Zaslav contributed to this report.


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