Loading...

Goldman Sachs Axes US Growth Forecast After Manchin Nixes BBB

December 20, 2021 by Dan McCue
Goldman Sachs Axes US Growth Forecast After Manchin Nixes BBB
Goldman Sachs Headquarters, New York City. (Wikimedia Commons)

NEW YORK — Goldman Sachs downgraded its growth forecast for the U.S. economy in the wake of Sen. Joe Manchin’s announcement during a televised interview that he will not support President Joe Biden’s Build Back Better plan.

In a note to investors, Goldman Sachs said it is lowering its forecast in response to “changed fiscal assumptions.”

“Build Back Better no longer looks like the base case,” the multinational investment bank and financial services company said.

“We recently put the probability of a modified version of the Build Back Better legislation passing at slightly better than even but, in light of Manchin’s comments, the odds have clearly declined and we will remove the assumption from our forecast,” it added.

Goldman is now forecasting the U.S. economy will grow by a meager 2% in the first quarter, 3.5% in the second, and 2.75% in the third.

This after Manchin, a centrist Democrat from West Virginia, told “Fox News Sunday” that he could not support the Build Back Better bill in its current form.

“My concerns have only increased as the pandemic surges on, inflation rises and geopolitical uncertainty increases around the world,” Manchin said. “I have always said ‘If I can’t go back home and explain it, I can’t vote for it.’”

As things stood Monday, Manchin’s stance meant the bill, which includes substantial increases in spending on social programs and climate initiatives, would likely either have to be dramatically trimmed or face the prospect of never passing the Senate at all.

Manchin’s interview was a stunner for top administration officials who believed that after several meetings with the president, the senator had begun to come around.

In a lengthy statement released Sunday, White House Press Secretary Jen Psaki blasted Manchin, saying his comments on Fox News were “at odds with his discussions this week with the president, with White House staff, and with his own public utterances” and “represent[ed] a sudden and inexplicable reversal in his position, and a breach of his commitments to the president and the senator’s colleagues in the House and Senate.”

“Weeks ago, Sen. Manchin committed to the president, at his home in Wilmington, to support the Build Back Better framework that the president then subsequently announced. Sen. Manchin pledged repeatedly to negotiate on finalizing that framework ‘in good faith.’

“On Tuesday of this week, Sen. Manchin came to the White House and submitted—to the president, in person, directly — a written outline for a Build Back Better bill that was the same size and scope as the president’s framework, and covered many of the same priorities. While that framework was missing key priorities, we believed it could lead to a compromise acceptable to all,” she continued. “Sen. Manchin promised to continue conversations in the days ahead, and to work with us to reach that common ground.”

With that, condemnation from other Democrats was swift, while still others urged their colleagues to press on.

“After months of negotiations, one Democratic U.S. senator has now summarily walked away from productive negotiations,” said Rep. Abigail Spanberger, D-Va., a moderate Democrat and an example of the former.

“That is unacceptable, and we cannot act like this moment is the end. Children, families, and the future of our planet are counting on us,” she said.

She was joined in her consternation by House Appropriations Committee Chair Rosa DeLauro, D-Conn., who called Manchin’s opposition to the Build Back Better bill “a slap in the face” of working families.

“While families are living paycheck to paycheck, Sen. Manchin’s actions would mean big corporations not paying their fair share, coal companies endangering the climate and millions of children in poverty,” DeLauro said. 

“Failure to pass this transformational package hurts the more than 346,000 children in West Virginia benefiting from the Child Tax Credit, goes against the more than 70% of West Virginia voters who support paid family and medical leave for all workers, and betrays working and middle class families calling for the federal government to reduce the costs of child care, health care, prescription drugs,” she said, adding, “The fight to pass Build Back Better is not over, and I will continue to stand with President Biden and my congressional colleagues urging Sen. Manchin to honor his commitments and enact this legislation.”

Meanwhile, New Democrat Coalition Chair Suzan DelBene, D-Wash., said, “The challenges our country faces are too big and the cost of inaction is too high to throw in the towel on Build Back Better negotiations now. 

“Programs that New Dems fought for and secured in the House-passed Build Back Better Act address the most pressing issues for families and our nation,” she said. “This legislation extends the enhanced Child Tax Credit, builds on the Affordable Care Act, tackles the climate crisis and empowers communities to create lasting economic opportunities and jobs.

“Our members unanimously voted to advance the Build Back Better Act to the Senate last month, and we are still at the table, ready to reach an agreement on a bill that will get 218 votes in the House and 50 votes in the Senate,” DelBene said. “At the start of these negotiations many months ago, we called for prioritizing doing a few things well for longer, and we believe that adopting such an approach could open a potential path forward for this legislation.

“Americans across the country are depending on us, and New Dems will continue working with the Biden-Harris administration and our colleagues in Congress to advance the Build Back Better Act. Failure is not an option,” she concluded.

But Pat Toomey, R-Pa., said in a Tweet that Manchin was “right to call out these dangers.”

“He did a huge service to the nation by just saying no,” Toomey said.

In subsequent tweets, he said “making millions of Americans dependent on the government and hiding behind budgetary gimmicks while inflation is at a 40-year high would be disastrous.

“The Biden administration and Democratic leadership were wrong to attempt a total transformation of the relationship between Americans and the federal government. The American people didn’t vote for it. They don’t support it,” Toomey concluded.

Dan can be reached at dan@thewellnews.com and at https://twitter.com/DanMcCue.

In The News

Health

Voting

Economy

Fewer Americans File for Jobless Aid

WASHINGTON (AP) — Fewer Americans applied for jobless benefits last week as the U.S. job market remains robust despite four-decade... Read More

WASHINGTON (AP) — Fewer Americans applied for jobless benefits last week as the U.S. job market remains robust despite four-decade high inflation and a myriad of other economic pressures. Applications for jobless aid for the week ending June 18 fell to 229,000, a decline of 2,000... Read More

June 22, 2022
by Dan McCue
Biden Calls for ‘Gas Tax Holiday’ in Bid to Knee-Cap Inflation Woes

WASHINGTON — President Joe Biden on Thursday called on Congress to suspend the federal tax on gas and diesel for... Read More

WASHINGTON — President Joe Biden on Thursday called on Congress to suspend the federal tax on gas and diesel for three months to provide some relief to soaring inflation and surging prices at the pump. The federal gas tax holiday the president is seeking would suspend... Read More

Wall Street Gets Back to Tumbling After 1-Day Reprieve

NEW YORK (AP) — Markets worldwide are back to tumbling on Thursday, and Wall Street is down roughly 3% in... Read More

NEW YORK (AP) — Markets worldwide are back to tumbling on Thursday, and Wall Street is down roughly 3% in a widespread wipeout as worries about a fragile economy roar back to the fore. The S&P 500 was 3.1% lower in afternoon trading, more than reversing... Read More

Biden Tells Oil Refiners: Produce More Gas, Fewer Profits

President Joe Biden on Wednesday called on U.S. oil refiners to produce more gasoline and diesel, saying their profits have tripled during... Read More

President Joe Biden on Wednesday called on U.S. oil refiners to produce more gasoline and diesel, saying their profits have tripled during a time of war between Russia and Ukraine as Americans struggle with record high prices at the pump. “The crunch that families are facing deserves immediate action,” Biden... Read More

Wall Street Wobbles a Day After Tumbling Into Bear Market

NEW YORK (AP) — Wall Street is wobbling between gains and losses Tuesday in its first trading after tumbling into... Read More

NEW YORK (AP) — Wall Street is wobbling between gains and losses Tuesday in its first trading after tumbling into a bear market on worries about a fragile economy and rising rates. The S&P 500 was 0.1% higher in early trading after a couple big companies flexed financial... Read More

Markets Tumble Worldwide, Bear Market Growls on Wall Street

NEW YORK (AP) — Wall Street is tumbling even more Monday, sending the S&P 500 down more than 20% from... Read More

NEW YORK (AP) — Wall Street is tumbling even more Monday, sending the S&P 500 down more than 20% from its record, amid fears that a recession is more likely given how unshakeable inflation has become. The S&P 500 was 2.7% lower in the first trading... Read More

News From The Well