Lawrence Summers: Big Beautiful Bill is “a Shocking Thing In Its Brutality”

BIANNA GOLODRYGA: 11.8 million, that’s how many people in the United States are at risk of losing their vital health insurance because of President Trump’s new domestic policy law. And while he’s insisted, quote, “That it’s not going to cause death,” former Treasury Secretary Larry Summers argues that it’s a cruel law that pushes aside simple matters of decency. And he joins Walter Isaacson to explain.

WALTER ISAACSON: Thank you Bianna. And Larry Summers, welcome back to the show. 

LAWRENCE SUMMERS: Good to be with you again.

ISAACSON: You know, you wrote last week after President Trump signed what he called a big beautiful bill on July 4th.  “I don’t remember any past July 4th being so ashamed of any action my country had taken.” That was in a New York Times op-ed. What do you mean by that?

SUMMERS: I mean that this was a shocking thing in its brutality. We’ve had budgets all the time, we’ve had changes in policy. The United States has never cut back its social safety net nearly as much in any action, not in Ronald Reagan’s cuts in 1981, not in the budget, in the welfare reform bill that was passed in the mid 1990s, not in the aftermath of the financial crisis. Never have we had as large a cutback in the social safety net measured relative to the size of the economy as we did here.

And the academic evidence, the studies of what happens when people are kicked off of Medicaid is very clear. They become a bit more likely to die. And over 10 years, this is likely to kill more than a hundred thousand people.

So there’s a kind of casual brutality about this that’s not even being widely discussed, that is just on a different scale than anything our country has done before in all the various budgets that we’ve had. 

And then you ask, we’re doing this to save money and for what? So that people who now can tax exempt pass $30 million to their kids will be able to tax exempt pass $32 million to their kids; so that corporations will be able to continue to have tax rates that are lower than the ones they ask for at the time of the original Trump legislation. I just think this is our country getting its values all together wrong.

ISAACSON: Lemme ask you the big philosophical question. There’s certain things we put in the commons, everybody has a right to, whether it’s police protection, fire protection, defense, roads, things like that. Should healthcare be one of those things we should try to make sure is more in the commons so that we can protect a society that has disparities of wealth and make sure that everybody can survive in such a place?

SUMMERS: Sure. Look, I, I’m a progressive, so I tend to think the right answer to that question is yes, but that is not what we are debating here. We are debating whether a parent who is taking care of a child who weighs 70 pounds as an adult, whose body is racked by cerebral palsy, is going to be able to get care at home so they can go out and earn a living to support the family. We are debating whether people who are discharged from the hospital have a place to go when they’re not able to take care of themselves. We are debating whether aged people who need dialysis to survive – there’s a way of getting them transportation to a hospital. So we can debate the extent to which we should provide for the same medical care for everybody. That’s a hard and complicated question. I’m on the progressive side of it, but the most elementary kinds of decency, I’m sure there’s some people who are against that, but I think the vast majority of the people, if the question were actually put to them, wouldn’t wanna see the kind of brutality that we are engaging in.

And it reflects what we are seeing too much of. We’re seeing it in the tariffs, we’re seeing it in many policies. It’s just a casual, what sounds good without really making an effort to understand what’s happening on the ground. That’s how the Doge destroyed the ability of the government to collect taxes and to distribute efficiently social security benefits. That’s how we’re seeing deportations of people who are American citizens and haven’t done anything wrong. It’s the, this isn’t a matter of – we can debate the longstanding questions between progressives and conservatives. That is not what is an issue when I criticize this bill. What is an issue when I criticize this bill is simple matters of decency about us as a society. 

ISAACSON: So, what you’re saying is, it’s a basic cruelty that’s driving this.

SUMMERS: It’s a basic combination of cruelty and indifference combined with a single-minded focus on what should be tertiary objectives providing tax benefits to people who already have the highest incomes and the greatest levels of wealth. So it’s the wrong first priorities, the wrong in complete indifference, and then a certain amount of gratuitous cruelty.

ISAACSON: You just said that the Medicaid cuts would cause a hundred thousand deaths over the next decade. And you said not long ago on a TV show, that’s 2,000 days of death like we’ve seen in Texas this weekend. You are referring to the Texas flood.  Secretary of the Treasury, Scott Bessent said your comments turned a human tragedy into a “political cudgel,” were “deeply offensive”, and he called on you to apologize. What are you saying?

SUMMERS: Secretary Bessent can be offended by whatever he wants to be offended. I think what’s callous, what’s a political cudgel is the policies that he and his administration are legislating that will, according to objective experts in both parties kill people. And I don’t apologize for making vivid that large a number by pointing out how it dwarfs the terrible, terrible tragedy that took place in Texas. I think Secretary Besson, rather than attacking ex officials who are using their free speech rights to make comments, would be better off asking the question whether perhaps it was such a great idea to slash the budget of the Weather Bureau whether it was such a great idea to be in strong opposition to FEMA in light of what happened. I don’t have any basis for knowing I really, I really don’t. But after a tragedy of unprecedented scale that has taken place in the immediate aftermath of efforts to cut the protective mechanisms, that seems to me to be the question that a thoughtful, conscientious government would engage in.

ISAACSON: You when you were treasury secretary during the last four years of the Clinton administration, I think you all produced balanced budgets. Compare and contrast the situation then with what Trump is facing now.

SUMMERS: We tried to always be very careful to respect what the independent nonpartisan people at the Congressional Budget office were doing. Sometimes we found it inconvenient. Sometimes we wished they would do something different, but we understood that if there was gonna be a process with integrity, there had to be an umpire. And the umpire’s views had to be respected as part of the same kind of general attack on knowledge and expertise that has led them to stop supporting vaccination of people and led the country to an unprecedentedly high level of measles. They’re just attacking all of those procedures and making up their own rules and their own accounting. And I think it’s very unlikely to produce any kind of favorable outcome on the budget.

ISAACSON: I remember back then though that you argued that deficit reduction was not a big priority, but now it’s, I think, gonna be according to the CBO $3.4 trillion over the next decade. Is it a real problem now?

SUMMERS: Oh, look, I did argue in an era in the decade of the teens, I was for a time unconcerned about the budget deficit. That’s for two reasons. It’s because the deficit was much smaller than it is now, and it’s because interest rates were much lower than they are now. So if you can borrow inexpensively enough, you have to worry less about borrowing. But I think the approach these guys are taking is reckless. It’s reckless because we are facing unprecedented degrees of security threat. And there’s a question about how long the greatest power – if the world’s greatest debtor can remain the world’s greatest power. It’s dangerous because when you’re selling so much debt, there can come a day when markets just don’t want it. That’s what happened to England catastrophically and ended Prime Minister Truss’s prime ministership. And we are taking more risk of that kind of financial crisis.

And it’s taking more risk because right now we don’t have a recession, we don’t have a pandemic. We have ongoing, but not a major new national security threat and so this is the time when we should be rebuilding. This is the time when we should be filling up the coffers so that we’ll be ready for the next emergency. Instead, we are borrowing like we’ve got an emergency right now. And that raises the question of what we’re gonna be able to do when the emergency comes. This is irresponsibility, in addition to the moral irresponsibility, this is financial irresponsibility in terms of markets, and it is prudential irresponsibility in terms of flexibility, the likes of which I’ve never seen.

ISAACSON: You’ve been very critical, of course, on the tariffs and especially on the up and down tariffs and opposing them taking it back and pausing. But leave all of that aside in terms of how he’s implementing it. Your push for free trade and globalization really did hurt, to some extent, the manufacturing base and some of the jobs base in America. Do you think you overdid that and do you think there may be some room for some tariffs?

SUMMERS: I think that we need to do some things for the manufacturing sector. I strongly supported the CHIPS Act that sought to revitalize our semiconductor industry. I – we probably should have done things like that sooner for manufacturing. I think the kinds of things that were done to support clean energy manufacturing, those should have been done sooner. So yes, I think there are things that we should have moved more quickly to do with respect to supporting industry. Do I think tariffs are the right answer? Almost universally no. In many, many, many cases, Walter, they’re actually counterproductive. Think about steel tariffs 60 times as many people work in manufacturing industries that use steel as work in the steel industry. And so we’re costing more jobs by raising input costs than anything we’re saving in the steel industry.

We’re now in an electric economy, whether it’s data centers, whether it’s electric cars, whatever it is, the key to flourishing in that is to be able to move electricity around. There’s an element that does that. It’s copper and the administration is talking about massively raising the price of copper that’s gonna do more damage to manufacturing than any number of jobs that are gonna get saved in the copper mining industry. We created jobs during the Clinton administration faster than they’ve been created before or since. And a strategy that recognized that an open global economy would do much, much more to help US exporting than any losses that were suffered on the import side, that was the right strategy. And so this is a terrible strategy even before what’s going to come, which is that the other countries are gonna retaliate. We are per– we’re like a football team that can’t run the play in practice when there’s no defense without it backfiring. These are policies that even before the rest of the world responds are gonna make us poorer, in terms of less inputs.

And the other part of it is when you think about workers Walter, if you ask people right now, are they worried about whether they’re gonna have a job, that is a much smaller issue for people than the cost of living. And these tariffs at their current levels, the Yale Budget Lab says they’re gonna add $2,800 to the average family.

There have been half a dozen careful, thorough statistical studies of the much smaller tariffs that President Trump imposed during his first term. They all found what common sense suggests that those tariffs are passed on in the form of higher prices to consumers. And so, yeah, it’s not because I don’t care about American workers that I’m for supporting an open global economy, it’s because I do care about American workers and I want their paychecks to go as far as they can, and I want them to have maximum opportunity to do what America’s best at. No free trader would ever have suggested that the role of American workers should be to assemble small telephones in the way that the Secretary of Commerce of the administration suggested was the central part of the current administration’s economic strategy. So yes, we do need to be paying attention to manufacturing, particularly where it relates to national security, but no, tariffs are not the right way.

ISAACSON: Larry Summers, once again, thank you so much for joining us.

SUMMERS: Thank you.