The Senator does not want to approve Biden’s “Build back better” plan.
(Photo: AP)
new York The cancellation came on Fox News. Joe Manchin, the Democratic Senator who has been delaying the planned social and climate package for weeks, told the Trump-affiliated TV station in an interview that he would not agree to the latest draft of the “Build back better” plan either.
Despite months of persuasion, US President Joe Biden failed to convince his conservative party colleague from West Virginia. Since the Democrats only have a wafer-thin majority in the US Senate and the Republicans reject the package, the President depends on the Senator’s vote.
The surprise announcement from Manchin sent Wall Street stock prices further downhill. The investors unsettled by Omikron are now also afraid of the 1.75 trillion economic stimulus package that has actually already been priced in. First economists are revising their growth expectations downwards.
German companies are also closely monitoring what is happening in the Senate. You had calculated that you had good chances of investing in climate protection. The chief economist of the investment bank Goldman Sachs, Jan Hatzius, is convinced that a failure of the package would put a brake on economic growth in the coming year.
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“The implementation of BBB (Build Back Better) already looked close, and in light of Manchin’s comment we are adjusting our forecast,” he writes. Goldman Sachs is now expecting growth of two percent, three percent and 2.75 percent in the first three quarters.
Despite months of persuasion, the US president failed to convince his conservative party colleague Manchin.
(Photo: Reuters)
Moody’s economist Mark Zandi also expects negative effects on the economy if the Democrats cannot push through any further spending. Growth could slow to less than 1.5 percent in the fourth quarter of 2022. For comparison: This year, many economists expect growth of up to six percent in the fourth quarter. A failure of the BBB package “would make us vulnerable at the end of next year,” says Zandi.
A smaller package is possible
However, Jan Hatzius does not believe that the last word has really already been spoken. “While BBB in its current form looks very unlikely, there is still a good chance that Congress will push through a significantly smaller package of proposals that have to do with incentives for the manufacturing industry and supply bottlenecks,” writes the economist.
Some people have justified their rejection with the high inflation. The senator fears that more money in circulation could drive inflation further. Economist Hatzius assumes that inflation will rise to seven percent in the next few months before falling again. The inflation worries would therefore continue for the time being, which would make it difficult to approve the package.
Manchin had told Fox News that he had reservations for a long time and could not vote for the project. “I can not do it. I’ve tried everything humanly possible. ”Biden knows his concerns.
The White House spokeswoman Jen Psaki reacted unusually sharply: Manchin had promised to hold further talks and to look for a compromise. Should this now mean an end to these efforts, it would be “a sudden and inexplicable about-face and a breach of his obligations to the President and colleagues in the House and Senate”.
Bernie Sanders, who chairs the budget committee, still wants to put the package to a vote. Manchin must answer to his voters for why he voted against lower drug prices and more health services.
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