17 Nobel Prize-winning economists back Biden's $3.5 trillion Build Back Better plan

Seventeen recipients of the Nobel Prize in economics signed a letter in support of President Joe Biden’s $3.5 trillion Build Back Better package on Monday. They refuted arguments made by Republicans and moderate Democrats that the massive “human infrastructure” bill—which would provide funding to expand education, health care, child care, and climate efforts—is far too expensive.

The economists also came out in support of a proposed $2.9 trillion increase in taxes to pay for the program. The new rates, which would mostly impact the wealthiest Americans and large, multinational corporations, would represent the largest tax increase in decades.

“While we all have different views on the particulars of various economic policies, we believe that key components of this broader agenda are critical—including tax reforms that make our tax system more equitable and that enable our system to raise the additional funds required to facilitate necessary public investments and achieve our collective goals,” the economists wrote. “Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy, it will ease longer-term inflationary pressures.”

The signees, who are all currently employed as professors at the nation’s top universities, include Treasury Secretary Janet Yellen’s husband George Akerlof, Sir Angus Deaton, Peter Diamond, Robert Engle, Oliver Hart, Daniel Kahneman, Eric S. Maskin, Daniel McFadden, Paul Milgrom, Roger Myerson, Edmund S. Phelps, Paul Romer, William Sharpe, Robert Shiller, Christopher Sims, Robert Solow, and Joseph Stiglitz.

In a statement about the letter, Stiglitz, a professor at Columbia University, refuted claims that the spending package would lead to an increase in inflation, raising the prices of consumer goods, which have already grown by 5.3% over the past 12 months.

“This view is shortsighted,” he wrote. “These are importantly supply side measures, increasing the ability of more Americans to participate productively in the economy, helping to improve our low employment-working age population ratio.”

Democrats in Congress face an important deadline this week. Before the August recess, Speaker Nancy Pelosi and House Majority Leader Steny Hoyer made a promise to moderate Democrats that they would take up the bipartisan infrastructure plan by Sept. 27. But House progressives claim that they have the votes to stop the bill’s passage unless it’s tied to the larger, decidedly less-partisan $3.5 trillion spending package.

It doesn’t appear that the House or Senate will be ready to present the larger package by the end of the week, and a delay on voting could roil important moderate Democratic senators Kyrsten Sinema and Joe Manchin. At least 10 moderate Democratic House members have also made clear their intentions of voting on the bipartisan bill by the end of the month.

“If they delay the vote—or it goes down—then I think you can kiss reconciliation goodbye,” Rep. Kurt Schrader (D-Ore.) told Politico. “Reconciliation would be dead.”