Tornado Alley (PROG)

[fuagf]

Since Manchin has continuously opposed the bill it seems weird for you to say "Manchin wasn't against any of BBB Faug." Guess you mean he wasn't against anything specifically in the bill. He is certainly against the totality of the bill itself. And according to many experts the basis of his opposition is severely misguided.

Economists question validity of Manchin's inflation fears on Build Back Better

By Tara Subramaniam Updated 1854 GMT (0254 HKT) January 12, 2022

[...]

Experts weigh in

According to Mark Zandi, chief economist of Moody's Analytics, "One shouldn't vote for or against this legislation based on the impact on inflation."

Benjamin Page, a senior fellow at the Urban-Brookings Tax Policy Center, puts the possible inflation effect of the bill in the near term at about a few tenths of a percent, which would be a small bump compared with the 6.8% jump in prices for November 2021.

Justin Wolfers .. https://fordschool.umich.edu/faculty/justin-wolfers , a professor of public policy and economics at the University of Michigan, told CNN that "most of the inflation threat is Covid related in the present," adding that "roughly speaking Build Back Better is not inflationary."

"Manchin either fails to understand the inflation concerns or fails to understand the structure of the bill," Wolfers said. "The inflation surge is today, it's expected to be gone soon. Build Back Better if it does anything to the economy will be, most of it, several years hence."

Wolfers added that, "If you wanted to spend $2 trillion in 2021 that would be inflationary, but that is not at all what the bill does."

The Build Back Better Act calls for around $1.75 trillion in new spending which the Congressional Budget Office estimates will be mostly paid for over 10 years. The bill includes $585 billion for family benefits, $570 billion for climate and infrastructure initiatives, $340 billion for healthcare and $215 billion in individual tax credits and cuts.

The Committee for a Responsible Federal Budget, a nonpartisan group focused on policy analysis and fiscal responsibility, conducted its own estimates of how much the bill would cost over time.

Marc Goldwein, Senior Vice President and Senior Policy Director for the CRFB, told CNN, "We think that in the first couple of years there's about $250 billion of spending, by the third year over $300 billion, peaks in 2025 at almost $400 billion of spending and tax cuts, and ramps down to about $150 (billion) a year by the end."

In the short term, the spending will not be immediately offset because two big tax relief programs -- the expanded child tax credit and the earned income tax credit -- would be implemented immediately and would last another year, while some of the tax increases would not go into effect until later.

According to Goldwein, two of the main drivers of inflationary effects of the bill in 2022 would be the retroactive SALT cap increase and the monthly Child Tax Credit payments.

"Barely anything else is going to be spent in the first year," Goldwein said. "In that first 9 months not much else has had a chance to ramp up in a significant way but those have because people will get 9 monthly checks and one fat check at rebate time."

As a result, some economists say there may be a modest increase to inflation in the short term. However, Zandi believes that over the long run, the bill will have a marginal impact on inflation overall.

"Maybe on the margin it adds a bit to inflation next year, the year after," Zandi told CNN .. https://www.cnn.com/2021/12/15/politics/build-back-better-bill-inflation/index.html . "Maybe on the margin it reduces inflation in the longer run, but taking a step back it does not have a meaningful impact on inflation."

It's also worth noting that if legislation is inflationary and prices start rising too quickly, there are mechanisms in place designed to counter that, primarily interest rate hikes by the Federal Reserve .. https://www.cnn.com/2021/12/15/economy/inflation-fed-meeting/index.html .

"Even if you thought that Build Back Better was inflationary, the Fed's going to lean against that," Wolfers said. "To the extent that the Fed has the tools, it can undo whatever Congress does in terms of its implications for inflation."

https://edition.cnn.com/2021/12/23/politics/manchin-inflation-bbb-fact-check/index.html

I've read your more recent chats with others, won't buy into any of that here.

See also:

Two ways to read Manchin’s “no” on Build Back Better
[...]
The bill’s fate depends on whether he’s acting in good faith or bad faith.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=167185349