ICYMI: FAILURE TO PASS BUILD BACK BETTER WOULD SLASH GDP FORECAST, PER GOLDMAN SACHS

Failure to Pass the Build Back Better Act Will Result in a Weaker Economy, Lower Growth, According to the Latest Analysis from Goldman Sachs

Moody’s Analytics Mark Zandi: Build Back Better Act and Bipartisan Infrastructure Deal Will Add Nearly $3 Trillion to the GDP and 1.5 Million Jobs Per Year For a Decade

POLLING63% of Voters — Including 64% of Independents — Support the Build Back Better Act

WASHINGTON, D.C. — Weaker economic growth is expected if the Build Back Better Act is not passed, according to the latest forecast from Goldman Sachs. Goldman Sachs’ analysts are among a large group of economists who have made clear that passing the Build Back Better will result in substantial economic growth, while a failure to pass it will result in a weaker economy.

KEY POINTS:

  • The apparent failure of President Joe Biden’s “Build Back Better” plan means that economic growth could be weaker than expected next year, according to Goldman Sachs.

  • “BBB enactment had already looked like a close call and in light of Manchin’s comments we are adjusting our forecast to remove the assumption that BBB will become law. While BBB in its current form looks unlikely, there is still a good chance that Congress enacts a much smaller set of fiscal proposals dealing with manufacturing incentives and supply chain issues,” the note said.
  • Goldman slightly lowered its real GDP growth forecast for each of the first three quarters in 2022. The firm now projects 2% growth in the first quarter, followed by 3% and 2.75% in the following two periods. Goldman previously expected growth of 3%, 3.5% and 3%.

Read the full article below:

CNBC: Goldman cuts GDP forecast after Sen. Manchin says he won’t support Biden’s ‘Build Back Better’ plan

The apparent failure of President Joe Biden’s “Build Back Better” plan means that economic growth could be weaker than expected next year, according to Goldman Sachs.

The plan hit a significant road block on Sunday when West Virginia Sen. Joe Manchin said he would not support the legislation, meaning that the bill does not have enough votes to pass the Senate.

Goldman Sachs Chief Economist Jan Hatzius said in a note to clients on Sunday that the failure of the bill — which includes significant spending on climate infrastructure and social programs — would slow economic growth in 2022.

“BBB enactment had already looked like a close call and in light of Manchin’s comments we are adjusting our forecast to remove the assumption that BBB will become law. While BBB in its current form looks unlikely, there is still a good chance that Congress enacts a much smaller set of fiscal proposals dealing with manufacturing incentives and supply chain issues,” the note said.

Goldman slightly lowered its real GDP growth forecast for each of the first three quarters in 2022. The firm now projects 2% growth in the first quarter, followed by 3% and 2.75% in the following two periods. Goldman previously expected growth of 3%, 3.5% and 3%.

“With headline CPI reaching as high as 7% in the next few months in our forecast before it begins to fall, the inflation concerns that Sen. Manchin and others have already expressed are likely to persist, making passage more difficult,” the firm also noted.

About Invest in America

Invest In America is a national rapid response operation advocating for robust public investment to rescue the economy from the COVID crisis and create prosperity for the future, and to fight back against fear-mongers who use deficit concerns as a scapegoat to starve American communities and businesses of resources.

The operation consists of two components: Invest in America, the charitable and public education arm, which is a fiscally sponsored project of Economic Security Project funded by the William and Flora Hewlett Foundation and Economic Security Project co-chair Chris Hughes; and Invest in America Action, the advocacy and social welfare arm, which is a fiscally sponsored project of Economic Security Project Action funded by Chris Hughes and the Omidyar Network.

Learn more at InvestInAmericaNow.com and @InvestNowUSA, and InvestinAmericaProject.com.

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