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Moody’s Chief Economist Mark Zandi: The legislation will boost “the economy’s longer-term growth potential and ease inflation pressures”

Washington, D.C. — A new analysis released today by Moody’s chief economist Mark Zandi affirms that the Biden-Harris Administration’s Build Back Better agenda and the Bipartisan Infrastructure Deal will create jobs, help American businesses, grow our economy, reduce economic inequality, and benefit working families.

The report affirms that the President’s plans will create millions of jobs while helping businesses and boosting long-term economic growth. 

  • “Increasing infrastructure investment has significant macroeconomic benefits. Near term it has a large so-called multiplier—the increase in GDP for a dollar increase in investment. […] Long term, economic research is in strong agreement that public infrastructure provides a significantly positive contribution to GDP and employment.”
  • “The [bipartisan infrastructure] deal creates close to 650,000 jobs at its peak impact in the middle of the decade, reducing the unemployment rate a couple tenths of a percentage point.” […] “There are more than 2 million more jobs by mid-decade [due to the reconciliation package] and the unemployment rate is at least 0.5 percentage point lower.”

  • “[Infrastructure spending] lowers business costs and thus improves competitiveness and productivity, allows workers to live closer to where they work and thus reduces commute times, improves labor participation, and reduces carbon emissions.”

  • “Greater investments in public infrastructure and social programs will lift productivity and labor force growth, and the attention on climate change will help forestall its increasingly corrosive economic effects.”

Zandi’s analysis also shows that the plans will lift up working families:

  • “The reconciliation package would provide both a near-term boost to the economy given the tax cuts in the plan for lower-income individuals and as spending on the various social programs gears up, and several important long-term economic benefits.”

  • “First, [the reconciliation bill] would increase the labor force participation and hours worked of mostly lower-income women by making childcare more affordable, providing for paid family and medical leave, and expanding the earned income tax credit that encourages low-income households to work. The package makes it more cost effective for more parents to work, and the extra time and scheduling flexibility created by childcare allows them to work more hours.”

  • “[The reconciliation bill] would increase labor productivity by raising the educational attainment of the workforce via universal pre-K, two years of free community college, expanded Pell Grants, and funds to help keep college students in school.”

  • “Moreover, the policies being considered would direct the benefits of the stronger growth to lower-income Americans and address the long-running skewing of the income and wealth distribution.”

The analysis also notes that the President’s plans will ease inflation pressures brought on by the COVID-19 pandemic and that fears over inflation are “overdone.” 

  • “Worries that the plan will ignite undesirably high inflation and an overheating economy are overdone.”

  • “Moreover, much of the additional fiscal support being considered is designed to lift the economy’s longer-term growth potential and ease inflation pressures.”

The report emphasizes that the plans are largely paid for through increasing taxes on the ultra-wealthy and mega-corporations:

  • “The legislation is more-or-less paid for on a dynamic basis through higher taxes on multinational corporations and the well-to-do and a range of other pay-fors.”

  • “The reconciliation package also helps address the wide and growing disparity in the nation’s income and wealth distribution. It targets most of the social investments to lower- and middle-income households and taxes multinational corporations and the well-to-do to help pay for these benefits.”

  • “Moreover, on paper, the plan is largely paid for and does not add meaningfully to the nation’s deficits and debt.”

Read the full analysis here.

About Building Back Together:

With leadership in the White House and Congress that shares our values, we have a critical opportunity to advance a progressive agenda. But we know that it will take smart advocacy to build the case for these policies. Building Back Together — a 501(c)(4) not-for-profit focused on advancing progressive policies in the Build Back Better agenda — was formed to get the job done, by creating winning campaign coalitions to achieve our goals and growing public support for our agenda.

Our name is intentional: we can’t do this work alone. We’ll partner with organizations to achieve policy successes and work together to communicate with the American people about how the Build Back Better agenda is changing lives in communities across the country.

The team at Building Back Together will:

  • Convene progressive organizations to partner on coordinated campaigns at the local, state and national level
  • Create usable resources like message research, guidance and tools
  • Invest in innovative digital strategies and partnerships
  • Develop effective advertising campaigns