The Biden Administration’s “Build Back Better” plan is dead. The plan hit a significant roadblock on Sunday when West Virginia Senator Joe Manchin said he would not support the legislation, meaning that the bill currently does not have enough support to pass the Senate.
Goldman Sachs has projected as a result that the failure of the legislation could ultimately hinder GDP growth next year.
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%
“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,” According to a letter from Goldman Sachs.