Acemoglu, Diamond, Hart, Johnson, Krugman and Stiglitz warned of the proposal’s ‘misplaced priorities.’

On Monday, six Nobel Prize-winning economists urged the U.S. Senate to reject President Donald Trump’s proposed tax and budget legislation.

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In an open letter, Daron Acemoglu, Peter Diamond, Oliver Hart, Simon Johnson, Paul Krugman and Joseph Stiglitz warned of the proposal’s “misplaced priorities,” saying it “significantly increases the debt” while “reducing income for the poorest 40%.”

“The most immediate and severe harm resulting from this bill would be felt by the millions of American families who would lose key safety net protections,” they wrote, referring specifically to cuts to Medicaid, Medicare and food assistance programs.

These cuts “represent a troubling step backward in the country’s commitment to ensuring access to health care for all,” the letter continued. It was published on the Economic Policy Institute’s website.

Dubbed the “big, beautiful bill,” the sweeping legislation narrowly passed the House of Representatives by a 215-214 vote. It now heads to the Senate, where it faces a difficult path to final approval, amid pressure from the White House to reach Trump’s desk before July 4.

The ambitious plan seeks to extend Trump-era tax cuts from his first term (2017–2021) and introduces new breaks, including exemptions for tips and for purchases of domestically manufactured vehicles. It also boosts funding for enforcement of the president’s hardline immigration policies.

The Congressional Budget Office (CBO) estimates the legislation would add about US$3 trillion to the national debt over the next 10 years. The national debt currently exceeds US$36 trillion.

To offset this increase, the plan includes more than US$1 trillion in cuts to social programs. According to the CBO, federal Medicaid funding would be reduced by nearly US$700 billion, and Medicare would see cuts of approximately US$500 billion. The nonpartisan office also warned that these figures may rise, and it projected a US$267 billion reduction in food stamp assistance.

“U.S. structural deficits are already too high… and these tax cuts overwhelmingly benefit higher-income households,” the six prominent economists said. They also predicted that “the resulting increase in debt and deficits will place considerable upward pressure on inflation and interest rates in the coming years.”

According to the Nobel laureates, the bill as currently written “fails to meaningfully address any of the country’s key economic challenges and, in fact, worsens many of them. The Senate should reject this legislation and start over with the budget.”

teleSUR/ JF

Source: EFE

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