Senator Joe Manchin Almost all killed On Sunday, Joe Biden introduced a $175 million flagship social spending bill. He mentioned his concerns about rising inflation and the bill’s impact on the federal deficit.

Now, economists are responding to the intervention of conservative Democrats by lowering their expectations for US economic growth.

It was previously predicted that the global Largest economy In the first quarter of next year, it will grow by 3%. A group of economists at Goldman Sachs lowered their estimates by 1 percentage point this week in anticipation that the “Rebuild Better” bill will be passed.

Additional layoffs for the second and third quarters of 2022 highlight the “negative growth impact” of the bank’s employees as a result of failing to pass the fiscal plan.

Biden cited Goldman Sachs’ amendments in a speech at the White House on Tuesday, saying: “All the discussions about how my better reconstruction plan will increase inflation and lead to these debts… What happened? Goldman Sachs and others. Say, if we don’t pass Build Back Better, we will be in trouble because it will promote economic growth. Without it, we will not grow.

“What happened? The stock price fell all the way,” he added. “It really fell.” The Standard & Poor’s 500 Index fell 1% on Monday, and after a similar trend on Friday, it recovered most of its losses on Tuesday.

Kathy Bostjancic of the Oxford Economics Institute cited the Manchin deadlock and the surge in coronavirus cases associated with the new Omicron variant, warning that the overall blow could reduce next year’s growth rate from 4.4% to around 3.7% The projected percentage of speed earlier this month.

She added that the drag on failing to pass “rebuild better” in 2023 may be even more serious, with the growth rate of real GDP falling below 2%, and the number of jobs will be reduced by 750,000 by the end of the year.

James Knightley, chief international economist at ING, said: “It takes money from the economy we think it will enter.” “This is a loss, and if this is the case, we will have to slightly lower our growth expectations.”

ING’s official forecast predicts that the U.S. economy will grow by 4.5% next year, but with Omicron’s ravages and Biden’s spending plans at risk, Knightley believes that 3.5% is more reasonable.

A few days ago, Manchin, representing West Virginia, said that he could not support the “rebuild better” package. This is a huge piece of legislation that will invest heavily in early childhood education and work hard to combat it. climate changeAnd other regulations.

After several weeks of direct negotiations with the White House, Manchin told Fox News on Sunday: “I can’t vote for the continuation of this legislation. I just can’t. I have tried every possible method for humans. I can’t get there.”

He disputed the size and scope of the package, including specific regulations, such as the introduction of four-week paid family and sick leave allowances for all American workers, and tax credits for families with children.

Earlier this year, the $1.9 trillion new crown stimulus bill proposed by the Democratic Party expanded the child tax credit, providing each child under the age of 6 with an annual credit of $3,600, for each child between the ages of 6 and 17. Provide an annual credit of $3,000.

Economists at Deutsche Bank said that the loss of child tax credits is “a major downside risk to consumer spending,” which directly affects recent income levels.

Manchin’s intervention aroused the anger of Democrats in the Senate and House of Representatives, sparked disagreements, and led to mutual accusations within the president’s party.

On Tuesday, Katie Porter, a progressive member of the House of Representatives, issued a statement saying: “No wonder economists lowered their forecasts for US economic growth after Senator Manchin made comments.

“The Rebuild Better Act fights inflation and invests in the strong, stable, and globally competitive economies we need.”

The White House and Democratic congressional leaders argued that the $175 million bill would curb rather than exacerbate inflation by reducing the cost of households’ childcare and other services and prescription drugs.

At the same time, Republican lawmakers are trying to link the bill to rising consumer prices, believing that unprecedented spending will further push up inflation. Recently read It shows that inflation is rising at the fastest rate in the past 40 years.

Most economists Under investigation However, in a joint poll conducted by the Financial Times and the Global Market Initiative of the University of Chicago Booth School of Business, they endorsed a third option, that is, the social spending plan and the recently passed bipartisan infrastructure bill will “over time Over time, there will be no substantial impact on inflation.

“This is not a financial wall that will hit the economy within a year. This will last for several years, and it will take longer to filter out,” Knightley said. “In an economy with very active demand and a limited supply chain, any additional demand will increase inflationary pressure, but if it increases the production capacity of the U.S. economy, it can actually reduce inflation in the long run.”

Manchin’s obstruction is dealt with Devastating blow The Democratic leaders of the White House and Capitol Hill plan to pass the bill with the support of only Democrats. Since the Democrats control the Senate at 50-50 and Vice President Kamala Harris can cast the final vote, Manchin’s support is critical to obtaining a majority of the bill.