It’s official. President Joe Biden’s $2 trillion Build Back Better plan died a widely reported death over the weekend.
The sweeping spending plan’s demise has been squarely pinned on the shoulders of Sen. Joe Manchin (A West Virginia Democrat, who in an explosive appearance on “Fox News Sunday” announced: "If I can't go home and explain it to the people of West Virginia, I can't vote for it. And I cannot vote to continue with this piece of legislation.”
While Manchin has taken the brunt of criticism for the move, which comes after months of him negotiating with the White House and key lawmakers, his final thumbs-down on the legislation was the tip of the spear for at least 51 of his Senate colleagues, who also did not believe the legislation and its price tag were the right move for America.
Manchin spoke about soaring inflation and the fifth wave of the Covid pandemic, which is threatening the economy, eroding the purchasing power of American households and stressing an already-fragile healthcare system, saying he’d “done everything humanly possible,” to negotiate with “all different spectrums of the political spectrum,” before announcing he would not vote for the plan.
Several advisors who spoke with Financial Advisor also thought the death of the Build Back Better plan is best for the nation and their clients at this time.
“We have been saying since January that the Democrats, who have the slimmest of majorities, were elected to ‘get back to normal,’ not to have the biggest progressive agenda passed in decades, to use their words, so it’s not too surprising a majority of senators were against it,” Jeff Farrar, founding co-partner in Procyon Partners, a Wilton, Conn.-based RIA, said.
“Some parts were okay, but the increased taxes were a burden. So overall, BBB dying this year is probably a net positive for the markets,” Farrar said.
He said the firm’s appraisal of the bill was not partisan. “We have clients all across the political spectrum, so the question so ‘are we glad’ is irrelevant. Our job is to interpret what we think will happen in any political scenario vs what we want to happen,” he added.
Scott A. Bishop, Executive Director of Wealth Solutions at Avidian Wealth in Houston, had a different take. He said he is “very glad that this fully partisan plan in its current form has failed.”
While there are “several provisions in the bill that many will like and should be debated, pushing it all through as a ‘kitchen sink’ bill that would truly cost trillions at a time of high deficits, debt and inflation is a bad stewardship of our tax dollars. Given the trillions spent in deficit this year and the COVID stimulus and the infrastructure bill...it’s best to see how off of that works first,” Bishop said.