The Economic Policy Institute issued an open letter to the American people, written and co-signed by six economists who won the Nobel Prize.
They wrote:
As economists who have devoted our careers to researching how economies can grow and how the benefits of this growth can be translated into broadly shared prosperity and security, we have grave concerns about the budget reconciliation bill passed by the U.S. House of Representatives on May 22, 2025.
The most acute and immediate damage stemming from this bill would be felt by the millions of American families losing key safety net protections like Medicaid and Supplemental Nutrition Assistance Program (SNAP) benefits. The Medicaid cuts constitute a sad step backward in the nation’s commitment to providing access to health care for all. 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.
Medicaid provides health insurance coverage for low-income Americans, but this includes paying out-of-pocket health costs for low-income retired Medicare recipients and providing nursing home and in-home care services for elderly Americans. Medicaid also covers 41% of all births in the United States, including over 50% of all births in Louisiana, Mississippi, New Mexico, and Oklahoma. Work reporting requirements will obviously yield no savings from these Medicaid functions.
Besides providing affordable health care to families, Medicaid is also crucial to state budgets and hospital systems throughout the country—particularly in rural areas. In 2023, the federal government sent $615 billion to state governments to cover Medicaid spending; this federal contribution accounted for over 75% of total state Medicaid spending in more than 19 states. Rural hospitals in states that accepted the Medicaid expansion that was part of the Affordable Care Act were 62% less likely to close than rural hospitals in non-expansion states.
In addition to Medicaid, the House bill also significantly cuts SNAP. These steep cuts to the social safety net are being undertaken to defray the staggering cost of the tax cuts included in the House bill, including the hidden cost of preserving the large corporate income tax cutpassed in the 2017 tax law. But even these sharp spending cuts will pay for far less than half of the tax cuts (not even including the cost of maintaining the corporate income tax cuts of the 2017 law).
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 ($5.3 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. 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. 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(if some of the fiscal cost is absorbed in future bills with extremely high and broad tariffs, the share of households seeing absolute losses will increase rapidly).
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 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.
Simon Johnson
MIT Sloan School of Management
Paul Krugman
Graduate Center, City University of New York
Diane Ravitch's blog 
Chairman Mao’s Great Leap Forward focused on rapid industrialization and agricultural production, coupled with dismissive attitudes toward ECONOMISTS, experts and basic economic principles. It led to devastating consequences. Peasants were forced to produce unrealistic quotas which then lead to famine and starvation.
Cultural Revolution. Mao’s Cultural Revolution also was a period of intense political upheaval. It saw many intellectuals, ECONOMISTS and experts targeted for persecution and often subjected to brutal conditions, including forced labor and torture.
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Wow. This letter is data-rich and well-argued, but to persuade senators already aligned with H.R. 1, it needs to be translated into their values and interests. On its own, it may resonate with people on this blog and/or center-left moderates (as well as probably a majority of Americans who have read the bill). Unless paired with political framing or bipartisan echoes, though, its persuasive reach may be limited in the Senate chamber. And that’s where the rubber will meet the road over these next few weeks.
Nobel laureates bring exceptional economic authority. Their unified stance conveys that concerns about H.R. 1’s effects are not fringe or partisan but grounded in consensus economic thought.
However, many senators who support this bill do so based on ideological principles (shrinking government, cutting taxes, requiring “work” for benefits, etc.), not strictly on the economic math. They may dismiss the economists as elite, liberal-leaning, or out of touch with “real America.” That will make their letter less effective in bringing about the change we need and wasting everyone’s time for the next decade with bad and misdirected policy.
The letter focuses on equity, capacity, and redistribution, which are favorite topics of mine (and probably many on this blog), but senators aligned with the bill may value personal responsibility, limited government, and market efficiency. Without reframing, those audiences may not find the letter persuasive.
I also think the letter doesn’t present the consequences for senators’ home states, so specific examples might have strengthened the argument.
Calling for the Senate to “start over from scratch” also may not be the best position. It feels dismissive or unworkable to those seeking at least partial wins. Economists should strive to advocate for targeted amendments or propose compromises that may gain more traction. We’re going to pass a budget bill one way or another, so H.R. 1 (an autocrat’s dream in many ways) needs to be reworked. As a practical matter, that means convincing 100 senators to rework it for the greater good.
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Paul K.,
All good points.
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