Analysts and economists in the nation’s top rating agencies say President Biden’s infrastructure and social spending plans will not add inflationary pressure to the U.S. economy, according to a report by Reuters.
Both spending bills “should not have any real material impact on inflation,” William Foster, a vice president at Moody’s Investors Service, told the news service.
“The bills do not add to inflation pressures, as the policies help to lift long-term economic growth via stronger productivity and labor force growth, and thus take the edge off of inflation,” Mark Zandi, the chief economist at Moody’s Analytics, said, according Reuters, adding that the bills are paid for largely by higher taxes on multinational corporations and wealthy households.
And Charles Seville, senior director at Fitch Ratings, said that both bills “will neither boost nor quell inflation much in the short-run,” reports Reuters.
West Virginia Sen. Joe Manchin, a centrist Democrat, has raised concerns that inflation could be worsened by spending in the Biden plans.
The White House has said that the “Build Back Better” plan would inject an additional $1.75 trillion into the economy and it would lower inflation, but Manchin has remained skeptical.
“I really haven’t heard any specifics on that one,” he said on Tuesday. “They say it’s going to lower [inflation]? I’ll have to check on that one.”
The $1 trillion bipartisan infrastructure bill was signed into law on Monday as attention now shifts to the next piece of Biden’s domestic agenda: his $1.75 trillion Build Back Better plan.