PRESS RELEASE: BREAKING: REUTERS: RATING AGENCIES SAY BIDEN’S SPENDING PLANS WILL NOT ADD TO INFLATIONARY PRESSURE

FOR IMMEDIATE RELEASE 
November 17, 2021

Contact:
Maddy McDaniel, Communications Director

[email protected] or 914-471-7716

BREAKING: REUTERS: RATING AGENCIES SAY BIDEN’S SPENDING PLANS WILL NOT ADD TO INFLATIONARY PRESSURE

Experts Agree the Build Back Better Act Will Ease Inflation By Lowering Everyday Costs for Families

Former Federal Reserve Vice Chair Alan Blinder: “Almost everything in the Build Back Better package aims at increasing supply. Where I come from, that sounds anti-inflationary.”

Moody’s Analytics’ Mark Zandi: “The bills do not add to inflation pressures, as the policies help to lift long-term economic growth via stronger productivity and labor force growth, and thus take the edge off of inflation.”

WASHINGTON, D.C. — Top ratings agencies say the Build Back Better Agenda will not add to inflation, reports Reuters. This report is the latest in a line of economic experts who say the Act will cut costs for the middle class by lowering the cost of health care, child care education, housing, and more.

Key Points: 

  • The two pieces of legislation “should not have any real material impact on inflation”, William Foster, vice president and senior credit officer (Sovereign Risk) at Moody’s Investors Service, told Reuters.

  • “The bills do not add to inflation pressures, as the policies help to lift long-term economic growth via stronger productivity and labor force growth, and thus take the edge off of inflation,” said Mark Zandi, chief economist at Moody’s Analytics, which operates independently from the parent company’s ratings business.

  • “The bills are largely paid for through higher taxes on multinational corporations and well-to-do households, and more than paid for if the benefit of the added growth and the resulting impact on the government’s fiscal situation are considered”, he said in an interview.

These findings echo experts and economists who for weeks have said the Build Back Better Act could actually help ease inflation by lowering key costs for families: 

  • Former Federal Reserve Vice Chair Alan Blinder: “Almost everything in the Build Back Better package aims at increasing supply. Where I come from, that sounds anti-inflationary.”

  • Joseph Stiglitz, Nobel Laureate Economist: “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. This simply means what it says: it will have positive ‘supply side effects’ which reduce inflationary pressures.”

  • Jason Furman, Professor at Harvard’s Kennedy School of Government“Your regular reminder: The reconciliation bill would have essentially no discernible effect on the medium- or long-term path of inflation. That legislation should be evaluated on other criteria like what it does for opportunity, climate change & long-term growth.”

  • Janet Yellen, U.S. Treasury Secretary“[The Build Back Better Act] is easing expenses for families, taking some of their most important and worrisome expenses, like child care, like health care, and providing resources — often in the form of tax credits — so that families can bear those burdens. And in that sense too, it’s relieving the stresses from inflation that we’re seeing as our economy is opening back up.”

  • Larry Levitt, EVP for Health Policy at KFF: “There is a provision in the Build Back Better Act directly targeted at inflation: Capping price increases for drugs at inflation in both Medicare and private insurance plans.”

  • Rakeen Mabud, Managing Director of Policy and Research & Chief Economist, Groundwork Collaborative: “It is imperative that we address the real culprits behind recent price hikes: the powerful corporations lining their pockets at the expense of workers, families and consumers, and the chronic underinvestment in our supply chains and economy writ large. Smart, large-scale investments like Build Back Better, coupled with pro-competition safeguards, will shift power to workers, reduce costs and prices in the long run, and ultimately, create an economy that works for all of us.”

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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