Moody's Talks - Inside Economics Reconciling Reconciliation
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Jun 10, 2025 Sharon Parrott, President of the Center on Budget and Policy Priorities, dives into pressing fiscal issues affecting low- and moderate-income communities. She critiques the latest reconciliation legislation, warning it favors high-income earners while cutting essential programs like Medicaid and food assistance. The discussion highlights how tax cuts fail to stimulate growth and how these policies may deepen income inequality. Parrott urges a reassessment of budget priorities to safeguard vulnerable populations amidst the looming fiscal challenges.
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Bill Favors Wealthy, Hurts Poor
- The reconciliation bill strongly favors high-income people and increases deficits massively.
- It cuts health coverage and basic food assistance, hurting millions of lower-income Americans.
Deficit Increases by Trillions
- CBO estimates reconciliation increases deficits by about $3 trillion under current law.
- Depending on assumptions, costs could be as high as $5 trillion over 10 years.
Deficits Unsustainable Long Term
- Deficits nearing 8% of GDP by 2034 are unsustainable, especially during recessions.
- Current deficits stem mainly from tax cuts, not increased spending.