U.S. growth in jeopardy after Manchin says he won’t vote for Build Back Better: Goldman Sachs

President Joe Biden faces the unexpected task of quickly rewriting his policy agenda in a crucial election year after a key Senate Democrat abruptly rejected his signature $1.75 trillion economic plan.

Senator Joe Manchin stunned the White House and fellow Democrats Sunday by announcing his opposition to a tax-and-spending package tailored to win his support after months of courtship by Biden and other administration officials. The move effectively torpedoes Biden’s campaign promises to address climate change, health-care costs and child-care needs.

Losing support from Manchin, a moderate from West Virginia, is essentially fatal in a 50-50 Senate where Republicans uniformly oppose the plan, known as Build Back Better. Biden and top congressional Democrats must now regroup at once on those priorities, with little more than 10 months before midterm races that will decide control of Congress.

Failure to deliver on the legislation risks ripples through a U.S. economy still recovering from the pandemic. Biden had lately portrayed it as an inflation-fighting measure, and Goldman Sachs lowered its estimates for U.S. economic output next year after Manchin’s move.