EXPERT ANALYSIS: FAILURE TO PASS BUILD BACK BETTER ACT WOULD “SLOW ECONOMIC GROWTH IN 2022”

FOR IMMEDIATE RELEASE: December 20, 2021

EXPERT ANALYSIS: FAILURE TO PASS BUILD BACK BETTER ACT WOULD “SLOW ECONOMIC GROWTH IN 2022”

Washington, D.C. – According to a new report in CNBC, new analysis from Goldman Sachs highlights how a failure to pass the Build Back Better Act would “slow economic growth in 2022,” hurting working and middle class families across the country. This echoes analysis by Mark Zandi, Chief Economist at Moody’s Analytics, who estimated that real GDP growth in 2022 will be cut and the economic recovery threatened without passage of the Build Back Better Act.

“These expert analyses underline the cost of inaction on this critical legislation that would build on the economic progress delivered so far by the Biden-Harris Administration, including a historic fall in the unemployment rate and nearly six million jobs created,” said Building Back Together Executive Director Danielle Melfi. “Anyone worried about the impact of prices should know that this legislation gives families the breathing room they need. The Build Back Better Act, when passed, will boost our economic growth, create millions more good-paying jobs, and lower the cost of living for American families by bringing down the costs of health care, prescription drugs, child care, housing, utility bills, and more.”

Key Point from Mark Zandi: “If BBB doesn’t become law, real GDP growth in 2022 will be lower by 0.5% and reaching full-employment next year will prove elusive. Fallout will be quick as families w/ children will lose a tax break. […] It puts the economic recovery at some risk in the near-term and will diminish the economy longer-run.”

Key Point from CNBC: “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.”

Read the full story from CNBC below:

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.

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