MOODY’S: PRESIDENT BIDEN’S ECONOMIC AGENDA WILL CREATE JOBS, GROW ECONOMY, EASE INFLATIONARY PRESSURE
FOR IMMEDIATE RELEASE: November 4, 2021
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MOODY’S: PRESIDENT BIDEN’S ECONOMIC AGENDA WILL CREATE JOBS, GROW ECONOMY, EASE INFLATIONARY PRESSURE
Report: Bipartisan Infrastructure Deal and Build Back Better Framework would create “stronger and fairer growth” and “ ease inflationary pressures”
WASHINGTON, D.C. — Today, a new report from Moody’s Analytics underscores how the Bipartisan Infrastructure Deal and Build Back Better Framework will together create millions of jobs, boost productivity, and lower the costs of things families depend on. Moody’s expects that when enacted, the President’s economic agenda will boost GDP by nearly $3 trillion over baseline estimates, all while working to “ease the financial burden of inflation.”
“We must keep up the momentum and build on the historic economic recovery the Biden-Harris Administration has already delivered, including nearly 5 million jobs created, and a 75 percent fall in new unemployment insurance claims,” said Building Back Together Executive Director Danielle Melfi. “The research is clear — passing the Bipartisan Infrastructure Deal and the Build Back Better Framework together is what’s needed to create long-lasting economic growth that reaches everyday American families.”
Key highlights from the report:
- “If this is close to what becomes law, it will strengthen long-term economic growth, the benefits of which would mostly accrue to lower- and middle-income Americans. The legislation is more-or-less paid for on a static basis and more than paid for on a dynamic basis through higher taxes on multinational corporations and the well-to-do and a range of several other pay-fors. Concerns that the plan will ignite undesirably high inflation and an overheating economy are overdone, as the fiscal support it provides will ensure the economy only returns to full employment from the recession caused by the COVID-19 pandemic.”
- “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. It is among the highest compared with other types of federal government spending and tax policy. Long term, economic research is in strong agreement that public infrastructure provides a significantly positive contribution to GDP and employment.”
- “The reconciliation package would provide 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. It also would have several important long-term economic benefits.”
- “The increased social investments in the package, particularly related to child- and eldercare, healthcare and housing, also quickly support stronger GDP and jobs. There are 1.6 million more jobs by mid-decade at the peak of the boost to employment, and the unemployment rate is 0.75 percentage point lower.”
- “Longer term, the economy’s growth enjoys a measurable increase due to stronger productivity growth given greater educational attainment and higher labor force participation.”
- “The economy performs best in the final scenario, in which both the bipartisan infrastructure deal and the reconciliation package become law. Real GDP growth would average 3.2% per annum during Biden’s term and 2.2% over the next decade, compared with less than 2.8% and 2.1% per annum if the legislation fails to become law.”
- “The legislation is also specifically designed to ease the financial burden of inflation for lower- and middle-income Americans by helping with the cost of childcare, eldercare, education, healthcare and housing for these income groups.”
- “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. 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.”