Economic forecasts dip after Manchin says he’ll oppose Build Back Better

Sen Joe Manchin’s fellow Democrats weren’t the only ones in mourning after his announcement opposing the Build Back Better Act likely killed hope for the legislation to be passed, at least without significant rewrites and cuts to some provisions.

Goldman Sachs cut its economic forecast for the US on Sunday in light of the news, with the bank’s chief economist stating bluntly in a note to clients that Mr Manchin’s decision to kill the bill or at the very least put it in serious jeopardy would stifle economic growth in 2022.

“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,” read the note from Jan Hatzius, according to multiple news outlets.

"A failure to pass BBB has negative growth implications,” the note continued.

The downturn could be offset by some “positive effects” in the stock market, it went on, but on Monday the stock market appeared to be reacting to the news coupled with growing fears about the Omicron variant of Covid-19 with dismay. The Dow plunged more than 430 points, while the S&P 500 and Nasdaq also saw losses.

Mr Manchin’s decision ignited a war of words between the West Virginia senator and the White House, which essentially accused him of not telling the truth in conversations with the president. Press secretary Jen Psaki called his decision 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” in a statement on Sunday.

The move could have dire consequences as well for Democrats seeking to hold their seats in swing districts, such as Rep Cindy Axne who previously told The Independent that she planned to campaign alongside Mr Biden on the passage of the Build Back Better Act in her district, which was won by former President Donald Trump in the last two presidential elections.

In a move many saw as a signal regarding his political leanings, Mr Manchin made his announcement on Sunday in an interview with Fox News, before which an aide alerted the White House of his plans. The senator did not speak personally with either the administration or Democratic congressional leadership before doing so.

"I cannot vote to continue with this piece of legislation. I just can't. I've tried everything possible. I can't get there,” he told Fox News Sunday guest host Bret Baier.

“You're done? This is a no?” asked Mr Baier in response.

“This is a no,” Mr Manchin confirmed.

The senator explained his decision in more detail in a radio interview on Monday, claiming he was never going to support some of the proposals in the bill and claiming that White House staff had “drove some things and they put some things out that were absolutely inexcusable” which pushed him over the edge.

Ms Psaki pointed reporters to her Sunday statement when asked about the issue at Monday’s press conference, and reiterated that while the president and Mr Manchin remained friends, her statement had “made clear what the course of events were over the last couple of weeks”.