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Catherine Rampell Profile picture
@crampell
May 16 • 6 tweets • 2 min read Twitter logo Read on Twitter
What’s in this supposedly commonsense bill McCarthy is demanding in exchange for not destroying the global economy?
Here’s my handy guide, for those interested in the substance of the legislation and not just political gamesmanship. 🧵
1. Unspecified across-the-board cuts to nondefense discretionary spending, down by one-third on average in 2024, after inflation. The cuts would then expand to roughly 59%, on average, by 2033
Does this mean WIC? Border security? Pells? FBI? No one knows washingtonpost.com/opinions/2023/…
2. Defund the tax police - make it harder for IRS to collect taxes legally owed by wealthy/corporate tax cheats, and set back the agency’s other IT upgrades.
(Would also increase deficits) washingtonpost.com/opinions/2023/…
3. Medicaid work requirements - which sound nice, but are a solution in search of a problem. See Arkansas’s disastrous experiment, which did not boost employment but did cause a lot of poor working people to lose their healthcare. washingtonpost.com/opinions/2023/…
4. Provision to grind entire regulatory system to a halt, by requiring Congress’s approval for all major regs. That includes deregulatory action too btw
Congress can barely do the things it’s responsible for now. Like, say, paying our existing bills
washingtonpost.com/opinions/2023/…
Here’s a separate thread on what happens if Republicans don’t get their way, and instead force a default.

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More from @crampell

Catherine Rampell Profile picture
May 5
"Financial armageddon"
“Global margin call”
“Bankruptcies that rival those in the Great Depression”
These were some phrases used by former Treasury/Federal Reserve officials when asked about a US default. The likely fallout, in 7 terrifying steps: wapo.st/3LzOisI
1) Treasurys get downgraded—as does virtually every other asset on earth
Treasurys are regarded as risk-free, w/ everything else benchmarked against them. realization that Treasurys are unsafe cascades through other assets, including bonds of US corporates wapo.st/3LzOisI
even AAA-rated US corporates likely to be affected, because usually companies are not rated more highly than their sovereign (which can always tax them)
Read 14 tweets
Catherine Rampell Profile picture
May 3
people keep saying now is a good time to be a low-wage worker...those in low-income households say otherwise.
heldrich.rutgers.edu/sites/default/… Image
Some folks responded noting that lower-income people will always report more financial stress than higher-income ones; better comparison would be how low-income answer q's about financial/job anxiety today versus in yrs past. Fair. So, I asked Heldrich Center for time series data
The question on concerns regarding "ability to financially support you and your family" was asked once before, in Dec 2020. Lower-income people are *more* likely to report concerns today than then. (True for other groups too) Image
Read 6 tweets
Catherine Rampell Profile picture
May 1
This is the problem with unspecified, across-the-board cuts. Always have plausible deniability that anything popular won't be touched
House bill cuts nondefense discretionary spending by 28% or 58% (depending on assumptions) in real per cap terms by 2033. NDD includes infant nutrition, border security, Pell, FBI, housing subsidies, etc.
Which of those will get targeted? GOP can technically claim none of them!
With unspecified spending caps, House GOP lawmakers can punt and claim the entirety of the cuts will come from "waste, fraud, & abuse" or "wokeism" or some other non-answer.
Read 7 tweets
Catherine Rampell Profile picture
Apr 29
As I have been saying for months now: this catastrophe is much closer than most media, markets, politicians, voters seem to realize.
People assume that just b/c we avoided going over the cliff in 2011 we’ll do the same now. That is not a safe assumption washingtonpost.com/politics/2023/…
If several months from now, I look back at the many pieces I wrote about the debt limit standoff and conclude I was too alarmist, I will be relieved by that outcome
But right now I fear there is too much complacency about tail risks here
Public is anxious about inflation, bank turmoil, recession risk. But based on recent polling, most Americans appear to be shrugging off possible consequences of default.
Believe you me: as economic risks go, default would be much much scarier than those other things. Image
Read 4 tweets
Catherine Rampell Profile picture
Apr 28
GOP's Medicaid work requirements are a solution in search of a problem. Worse than that: they'll create entirely new problems, especially for vulnerable population they're supposed to help
This experiment was tried before, in Arkansas. It was disastrous wapo.st/42ammm5
CBO concluded that House GOP bill's Medicaid work requirements “would have a negligible effect on employment status or hours worked by people who would be subject to the work requirements.” But, 1.5m Americans wld lose federal funding for Medicaid coverage
wapo.st/42ammm5
Lots of people responding that "the cruelty is the point." I disagree here. There are a lot of well-meaning people who believe adding work requirements to Medicaid would help more people achieve self-sufficiency. (Past polls have found bipartisan support for work requirements)
Read 6 tweets
Catherine Rampell Profile picture
Apr 10
A top solar material producer is planning its first factory outside China, but may pass on the US because of high costs, according to the CEO bloomberg.com/news/articles/…
Read 4 tweets

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