Abby Joseph Cohen Talks Eco Outlook Post US Midterms

Abby Joseph Cohen · Columbia Business School

The One Big Beautiful Bill's worst effects, like higher health costs and hospital closures, are still to come.

Cohen says the 'ugly parts' of the One Big Beautiful Bill have not yet been seen and will arrive this year and next. She lists higher health care costs, closures of hospitals including in rural areas, and large cuts to food assistance through SNAP and the WIC women, infants and children program. She argues the bill's negative impact on households and the economy is still ahead.

“We have not yet seen the ugly parts of that. And those are still coming down the pike this year and next. It will include higher health care costs. It will include closures of hospitals including in rural areas.”at 2:46

Abby Joseph Cohen · Columbia Business School

The administration is withholding appropriated funds, including for scientific research, and Congress should restore research funding.

Cohen says OMB Director Russell Vought has ignored congressional bills passed and signed by the president and has refused to pay out appropriations in several categories, including scientific research. She wants the emphasis on funding scientific research reestablished and sees it as part of a pro-growth agenda the new Congress should pursue.

“has specifically ignored congressional bills that were passed and signed by the president, and he's refused to pay out those appropriations in any number of categories including scientific research.”at 4:24

Abby Joseph Cohen · Columbia Business School

Executive power has grown sharply, and agencies have eroded guardrails, so the executive branch must restore them.

Cohen argues that executive power has grown enormously in recent years, so a president can veto Congress and cabinet agencies have ignored the constitution. She cites OMB refusing to pay appropriations and sharp staff cuts at the IRS, SEC, CFTC and CISA, which have weakened regulators. She says most Americans want some guardrails, and that restoring them is up to the executive, not Congress.

“one of the things that has happened in recent years has been enormous growth in executive power. ... We have seen dramatic shifting and reductions in staff at places like the IRS, the SEC, the CFTC.”at 3:49

Abby Joseph Cohen · Columbia Business School

Moderate, pro-growth compromise in the new Congress is possible and would help the economy.

Cohen notes that moderate Republicans did reasonably well alongside the Democratic wins, which makes a moderate approach possible. She argues that if compromises can be reached on a pro-growth agenda, that will be very helpful to the economy. Her view rests on the election results showing voters want less extreme governance.

“among the winners last night were not just Democrats but also moderate Republicans who did reasonably well in their races. And I think if compromises can be reached in terms of moving forward with things that are pro growth, a pro growth agenda, that will be very helpful.”at 8:10

Abby Joseph Cohen · Columbia Business School

CISA has been gutted and lacks meaningful leadership, a worrying gap given cyber threats.

Cohen names CISA, the agency that monitors cyber terrorism and cyber crime, as one of the agencies most eviscerated over the last two years. She says there are not people running it in any meaningful way. She treats this as an area of concern because the agency defends against cyber threats.

“one of the agencies that has been truly eviscerated during the last two years has been CISA, which is the group that looks at things like cyber terrorism, cyber crime, and we don't have people basically running that organization in any meaningful way”at 5:16

Abby Joseph Cohen · Columbia Business School

Deficits have surged under the One Big Beautiful Bill, and the early-December debt-limit talks are a key test.

Cohen argues the One Big Beautiful Bill caused an enormous run-up in deficits, both in dollars and as a share of GDP. She says the government will run out of room in early December when the debt limit must be raised, and she frames that negotiation with the existing Congress as an important test for the administration. She treats the deficit as a central constraint on the economic outlook.

“Under the so called one big beautiful bill, we have seen an enormous run up in deficits both in terms of dollars, but also as a percentage of GDP. And we're going to be running out of running room in early December when we need to see if the debt limit will be raised.”at 6:05

Abby Joseph Cohen · Columbia Business School

Rebuilding US soft power and global alliances matters because soft power is economic power, enabling trade blocs.

Cohen wants the new Congress to reestablish the soft power the US has had and to rebuild global alliances. She argues soft power is economic power, since other nations' willingness to join the US as part of a trade bloc is critically important to the economy. She sees this as a priority alongside more realistic tariff policy.

“I also think to reestablish some of the soft power that The United States has had in terms of reestablishing global alliances. You know, soft power is economic power. The willingness of other nations to be with us as part of a trade bloc and so on is critically important.”at 7:21

Abby Joseph Cohen · Columbia Business School

Congress should reclaim control of tariffs, and current tariff rationales, like the Canadian wood chip security claim, are unrealistic.

Cohen wants the incoming Congress to take back congressional control of tariffs, which she calls very useful. As an example of unrealistic policy, she questions why the administration deemed wood chips from Canada, imported by farmers in Wisconsin and Upstate New York, a security risk. She argues economic policy, including tariffs, needs more realistic approaches.

“I'm still scratching my head as to why the Trump administration concluded that wood chips from Canada that get imported by farmers in Wisconsin and Upstate New York, why that was a security risk.”at 7:38