CNN Business. Senator Joe Manchin's opposition to the Build Back Better Act prompted Goldman Sachs to swiftly dim its US economic outlook.The Wall Street firm told clients Sunday it no longer assumes President Joe Biden's signature legislation will get through the narrowly divided Congress, citing the West Virginia Democrat's announcement that he's a "no" on the $1.75 trillion bill."A failure to pass BBB has negative growth implications," Goldman Sachs economists, led by Jan Hatzius, said in the research report.
“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," Goldman Sachs economists wrote. "The omicron variant is also likely to shift political attention back to virus-related issues and away from long-term reforms."
The lowered chances that Build Back Better has "negative implications for near-term consumption" but will likely have some "offsetting positive effects" for financial markets, Goldman Sachs said.Specifically, the chances of corporate tax hikes have faded — and those higher tax bills would have eaten into the bottom lines of S&P 500 companies. It's also a positive for biotech companies that would have been hit by $100 billion in price reductions in the Medicare program, Goldman Sachs said.Still, Goldman Sachs said there is a chance that Congress passes a few smaller short-term provisions aimed at virus-related issues.
Matt Egan, CNN Business, December 19, 2021.
December 20, 2021
Voices4America Post Script. Manchin threatens to reject Biden’s Build Back Better. That will tank the economy. Goldman Sachs says so. Will he change his mind again? Will Murkowski? Or Collins? Call your elected officials. We can win this yet!