Build Back Poorer
Goldman Sachs cuts U.S. growth forecast on Joe Manchin's Build Back Better opposition
Sen. Joe Manchin (D-W.Va.) made waves on Sunday when he announced on Fox News Sunday that he won't vote for his party's Build Back Better domestic spending legislation. He sent an aide to let the White House and congressional leadership know less than a half an hour before going on air to drop his bombshell, and he "refused to take a call from White House staff" when they called to "head him off," a senior White House official told Politico's Ryan Lizza.
Republican moderates who voted for the bipartisan infrastructure deal Manchin helped negotiate were thrilled with the news, but congressional Democrats and the White House were not. Senate Finance Committee chairman Ron Wyden (D-Ore.) quickly released a new framework for a more narrowly focused Build Back Better plan, but the White House seems to think Manchin has killed the bill, releasing a sharply worded statement accusing him of going back on his written promise to President Biden.
Goldman Sachs decided Build Back Better is probably dead, too, and cut its forecast for U.S. economic growth accordingly.
"A failure to pass BBB has negative growth implications," Jan Hatzius and other Goldman Sachs economists said in a research report Sunday. Thanks to the "apparent demise" of the legislation, the U.S. should grow 2 percent in the first quarter of 2022, down from 3 percent, with more modest growth cuts in subsequent quarters. The "most important question for the near-term outlook," the economists wrote, is whether Democrats renew the expiring expanded child tax credit, as BBB would do.
White House Press Secretary Jen Psaki hit Manchin on the child tax credit provision, too. If he doesn't "reverse his position yet again, to honor his prior commitments and be true to his word," she said in her statement Sunday, "maybe Sen. Manchin can explain to the millions of children who have been lifted out of poverty, in part due to the Child Tax Credit, why he wants to end a program that is helping achieve this milestone — we cannot."
Psaki also suggested Manchin "explain to those families paying $1,000 a month for insulin why they need to keep paying that, instead of $35 for that vital medicine," and tell "the nearly two million women who would get the affordable day care they need to return to work why he opposes a plan to get them the help they need."