Summers: Running Deficits Under BBB Bill ‘Not the Right Thing’ and We Should Scale Back Its Tax Cuts for Rich

On Friday’s “CNN Tonight,” economist Larry Summers stated that while he supports the Build Back Better reconciliation bill, runs “incremental deficits for the first few years. That’s not the right thing to be doing and we should scale that back.” And the best way to handle that is to get rid of reinstating deductions for state and local taxes, which he said is a tax cut for the rich. Summers also stated that “we do need to control inflation better in this bill. But the right way to do it is to focus the spending on investment and to fully pay, in highly progressive ways, for the spending we have.”

Summers stated, “Look, my view is that, on balance, even if you had it as it stands, Build Back Better is better legislation for the United States. If I were in the Senate, I would vote for the Build Back Better legislation. Because I think the investments it makes are fundamental to the future of our country. I think it could be substantially better legislation than it is in its current form. We — now, in its current form, it’s running incremental deficits for the first few years. That’s not the right thing to be doing and we should scale that back. The best way to scale it back is to get rid of the provisions, partially repealing — or partially reinstating state and local tax deductibility, which are reducing taxes for many of the richest people in the country. If we got rid of that, we’d be very close to balanced budget for the next few years. That’s the right thing to do.”

He added that it was wrong to make large and broad payments earlier in the year, and it would compound the error “if we were to scrimp on vitally important investments.”

Summers further stated that carried interest should be addressed, the estate tax should be expanded, the corporate income tax rate should be increased, tariffs should be scaled back, and fossil fuel regulations should be examined to ensure they aren’t raising fuel prices. And that “we do need to control inflation better in this bill. But the right way to do it is to focus the spending on investment and to fully pay, in highly progressive ways, for the spending we have.”

Follow Ian Hanchett on Twitter @IanHanchett