What Economists Are Saying About The Build Back Better Act

The Build Back Better Act will tackle climate change, combat inflation, cut household costs, and create millions of good paying clean energy jobs. And it is fully paid for. Don’t just take our word for it, see below for a roundup of what leading economists and analysts are saying about the bill.

  • The Build Back Better Act Will Ease Inflationary Pressure
  • Clean Energy Will Cut Household Energy Costs
  • The Build Back Better Act Will Create Millions Of Jobs & Grow Our Economy
  • The Build Back Better Act Is Paid For
  • Revenue From Tax Enforcement Could Be Even Higher

The Build Back Better Act Will Ease Inflationary Pressure

Letter From 17 Nobel-Prize-Winning Economists: Biden’s Build Back Better Agenda “Will Ease Longer-Term Inflationary Pressures.” A letter from 17 Nobel Laureates in economics wrote of the Build Back Better agenda “Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy, it will ease longer-term inflationary pressures.” [Open letter from Nobel Laureates in support of economic recovery agenda, 9/15/2021]

Columbia Economist Joseph Stiglitz Maintained The Build Back Better Act “Will Ease Longer-Term Inflationary Pressures.” Joseph Stigliz, professor at Columbia University and one of the signers of a September, 2021 letter in support of the Build Back Better agenda was asked by the Washington Post about the updated version of the legislation in early November, 2021. Stiglitz held to the same conclusion about inflationary effects, saying: “Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy, it will ease longer-term inflationary pressures.” [Washington Post, 11/4/2021]

Princeton Economist Christopher Sims Maintained The Build Back Better Act Would Reduce Longer-Term Inflationary Pressures. Christopher Sims, professor at Princeton University and one of the signers of a September, 2021 letter in support of the Build Back Better agenda was asked by the Washington Post about the updated version of the legislation in early November, 2021. Sims said “The package would still reduce ‘longer-term inflationary pressures,’ even with some of its revenue-raising measures reduced, because of the supply-side effects it lists.” [Washington Post, 11/4/2021]

UC Berkeley Economist Daniel McFadden Addressing Inflation Concerns: “The Responsible Public Policy Is To Push Forward With The Infrastructure Bill And BBB Program.” In a follow-up conversation with the Washington Post, Daniel McFadden, professor at University of California at Berkeley and one of the signers of a September, 2021 letter in support of the Build Back Better agenda said:  “The responsible public policy is to push forward with the infrastructure bill and BBB program, but tie initiation of investments authorized in these bills to financing that is consistent with managing current inflationary pressure.” [Washington Post, 11/4/2021]

Roosevelt Institute Found That The Build Back Better Act Would “Relieve Inflationary Pressures.” An analysis by the Roosevelt Institute concluded that “The Build Back Better Act invests public funding in long-standing, specific supply chain bottlenecks and market failures and would, therefore, relieve inflationary pressures.”  It also stated “The Build Back Better Act commits the government to steady fiscal spending over the course of 10 years, focused on critical infrastructure that would pump money into the economy now, spur private sector investment and consumer spending, and expand the economy’s capacity over the long term. It would increase the supply of childcare, create new jobs, and allow parents to get back to work.” [Roosevelt Institute, September 2021]

Reuters Headline: “EXCLUSIVE Rating agencies say Biden’s spending plans will not add to inflationary pressure” [Reuters, 11/17/2021]

  • William Foster, VP & Senior Credit Officer At Moody’s Says BBBA & IIJA “Should Not Have Any Real Material Impact On Inflation.” William Foster, Vice President and Senior Credit Officer at Moody’s Investors Service said  of the Build Back Better Act and the Infrastructure Investment and Jobs Act: “The two pieces of legislation ’should not have any real material impact on inflation.’” [Reuters, 11/17/2021]
  • Moody’s Chief Economist Mark Zandi: Biden’s Infrastructure & Build Back Better Legislation “Take The Edge Off Of Inflation.” Mark Zandi, chief economist at Moody’s Analytics said of the Build Back Better Act and the Infrastructure Investment and Jobs Act: “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.” [Reuters, 11/17/2021]
  • Charles Seville, Senior Director at Fitch Ratings Said BBBA & IIJA “Will Neither Boost Nor Quell Inflation Much In The Short Run.” According to a report from Reuters, Charles Seville, senior director and Americas sovereigns co-head at Fitch Ratings,  said the Build Back Better Act and the Infrastructure Investment and Jobs Act: “will neither boost nor quell inflation much in the short-run.” [Reuters, 11/17/2021]

Moody’s Chief Economist Mark Zandi: Concerns About Inflation From Build Back Better Act Are “Overdone.” An analysis of the Build Back Better Act by Moody’s Analytics Chief Economist Mark Zandi found that “Concerns that the plan will ignite undesirably high inflation and an overheating economy are overdone.” [Moody’s Analytics 11/4/2021]

Moody’s Chief Economist Mark Zandi: Build Back Better Act “Will Ease Inflationary Pressures.”  Moody’s Analytics Chief Economist Mark Zandi wrote in a CNN editorial that “There is also no good way to connect the dots between the Build Back Better agenda, which is currently being debated in Congress, and higher inflation. The legislation provides support for public infrastructure and various social programs, and longer term, it is designed to lift the economy’s growth potential, which will ease inflationary pressures.” [Mark Zandi Op-Ed for CNN, 11/17/2021]

Larry Summers On The Build Back Better Act: “I’m For Build Back Better… I Don’t Think It’s Going To Have A Meaningful Impact On Inflation.” In an interview on PBS News Hour, former Treasury Secretary Larry Summers said to Judy Woodruff, “Judy, I’m for Build Back Better. I’m for it because of what it’ll do for the environment. I’m for it because of what it’ll do for the society. I don’t think it’s going to have a meaningful impact on inflation. It spends less money over 10 years than we spent just last year. Its spending is largely offset by tax increases. And it includes measures that will actually increase supply. So, I think any impact on inflation is likely to be negligible, precisely because, unlike last year’s stimulus, which I opposed, it is small and paid for in the macroeconomic scheme of things. So, I support it, not because I think it’s going to reduce inflation, but because I think it’s the right thing to do for the country’s long-term economy, and it’s not going to have much impact on inflation one way or the other.” [PBS News Hour, 11/16/2021]

Clean Energy Will Cut Household Energy Costs

RMI Found $9 Billion In Annual Savings For Consumers And Utility Companies Thanks To Clean Electricity Tax Incentives In The Build Back Better Act. An RMI analysis found: “if fully utilized, the clean energy incentives in the Build Back Better plan could help the United States reach its clean electricity goals by 2030, while saving utility companies and customers across the country $9 billion each year.  And in key states like West Virginia and Arizona, we found that tax credits and low-cost refinancing could save customers $429 million and $450 million, respectively, each year for the next decade.” [RMI, 11/4/2021]

Rhodium Group: Clean Energy Tax Credits & Energy Efficiency Investments Can Save Households $500 A Year On Overall Energy Costs. According to an analysis by the Rhodium Group of the clean energy tax credits in the Build Back Better Act paired with actions from the Biden White House: “Getting US emissions on track to reach the 2030 target can be done with little cost to consumers. Long-term tax credits, investments in energy efficiency and other factors cushion consumers from price increases associated with new standards and regulations. On a national average basis, households save roughly $500 a year in energy costs in 2030 in our joint action scenario.” [Rhodium Group, 10/19/2021]

Read more about consumer savings from clean energy investments here. 

Read more about how ignoring the climate crisis will end up costing as much as $10 trillion here

The Build Back Better Act Will Create Millions Of Jobs & Grow Our Economy

Moody’s Analytics Found The Build Back Better Agenda Could Add 2.4 Million Jobs And Increase GDP Growth. In a report that looked at the impacts of passing the Build Back Better Act alongside the Infrastructure Investments and Jobs Act, Moody’s Analytics found “The economy performs best in the final scenario, in which both the bipartisan infrastructure deal and the reconciliation package become law. Real GDP growth would average 3.2% per annum during Biden’s term and 2.2% over the next decade, compared with less than 2.8% and 2.1% per annum if the legislation fails to become law. In terms of employment, under the infrastructure deal and reconciliation package, there are 2.4 million more jobs at the peak of the employment impact by mid-decade, and unemployment is a full percentage point.” [Moody’s Analytics, 11/4/2021]

Economic Policy Institute Headline “The Build Back Better Act Will Support 2.3 Million Jobs Per Year In Its First Five Years.” A report from the Economic Policy Institute Found: “Overall, we estimate that the Build Back Better Act (BBBA) will provide support for 2.3 million jobs per year in its first five years, shown in detail in Table 1, below. Add to this an estimated 772,000 jobs per year supported by the bipartisan infrastructure deal, also referred to as the Infrastructure Investment and Jobs Act, passed last Friday in the House, and you get more than 3 million jobs supported per year.” [Economic Policy Institute, 11/10/2021]

Blue Green Alliance Estimates $2.3 Million Jobs From The Build Back Better Act’s Climate & Environmental Provisions. The Blue Green Alliance, a coalition of labor unions and environmental advocates published an analysis of job creation from the Build Back Better Act. According to the Blue Green Alliance, the bill would create over 2.3 million jobs, including 1.27 million jobs in revitalizing American manufacturing, 133,800 jobs in ensuring safe drinking water, 264,256 jobs in improving public transit, 602,899 jobs in improving community & worker resilience, 33,450 jobs in improving municipal buildings, universities, schools, and hospitals, and 52,000 jobs in improving electricity transmission. [Blue Green Alliance 11/18/2021]

The Build Back Better Act Is Paid For

Moody’s Analytics Found The Build Back Better Act Is “More Or Less Paid For” On A Static Basis And “More Than Paid For” On A Dynamic Basis. In a report that looked at the impacts of passing the Build Back Better Act alongside the Infrastructure Investments and Jobs Act, Moody’s Analytics found “The legislation is more-or-less paid for on a static basis and more than paid for on a dynamic basis through higher taxes on multinational corporations and the well-to-do and several other pay-fors.” [Moody’s Analytics, 11/4/2021]

Joint Committee On Taxation’s Scoring Of Tax Provisions In The Build Back Better Act Put The Bill On Track To Be Fully Paid For When Paired With Other Revenue Sources. On November 4, 2021, The Hill reported: “Tax-increase provisions in House Democrats’ latest version of their social spending package would raise nearly $1.5 trillion over 10 years, Congress’s tax scorekeeper said Thursday. The analysis from the Joint Committee on Taxation (JCT) comes as House Democrats are hoping to pass the bill as soon as this week. JCT’s score does not include revenue raised by providing the IRS more money for enforcement, or savings from drug pricing changes. House Ways and Means Committee Chairman Richard Neal (D-Mass.) told reporters that the JCT score indicates that the bill will be fully paid for when the tax increase, IRS and drug pricing provisions are all taken into account.” [The Hill, 11/4/2021]

Revenue From Tax Enforcement Could Be Even Higher

Larry Summers Called The CBO’s Underestimation Of Revenue From IRS Enforcement “​​Conservative To The Point Of Implausibility” In an op-ed for the Washington Post, Harvard economist and former Treasury Secretary Larry Summers wrote of the Congressional Budget Office’s analysis of revenue from additional IRS enforcement under the Build Back Better Act: “In general, I believe policy should be set on the basis of official scorekeeping by nonpartisan scorekeepers. But, in this case, it would be irresponsible to not recognize that the CBO estimate for tax-compliance efforts is conservative to the point of implausibility.” [Larry Summers Op-Ed for the Washington Post, 11/17/2021]

Larry Summers Said The CBO’s Scoring Of IRS Enforcement Provisions In BBBA “Flies In The Face Of Academic Research” On Taxpayer Behavior. In an op-ed for the Washington Post, Harvard economist and former Treasury Secretary Larry Summers wrote of the Congressional Budget Office’s analysis of revenue from additional IRS enforcement under the Build Back Better Act: “Finally, and perhaps most important, official estimates leave out the large impact of increased enforcement on taxpayer behavior, due to the CBO’s belief that greater enforcement scrutiny will increase voluntary compliance ‘only modestly.’ Even Treasury is extremely conservative in accounting for deterrence, suggesting that the indirect effect of additional spending on the IRS will be about half of the direct effect. This flies in the face of academic research: Indeed, a recent study from Tulane’s James Alm notes that the magnitude of these spillover effects are in the range of 4 to 12.”  [Larry Summers Op-Ed for the Washington Post, 11/17/2021; “Academic Research on Tax Compliance”, Larry Summers, 11/17/2021]

Five Former U.S. Treasury Secretaries Point Out That Stepped-Up IRS Enforcement Could Yield $700 Billion To $1.6 Trillion In Revenue. In an Op-Ed for the New York Times, five former Treasury Secretaries wrote: “The Treasury’s Office of Tax Analysis estimates that these initiatives will generate $700 billion over the 10-year budget window. But this proposal, if anything, is modest. Former I.R.S. Commissioner Charles Rossotti, who served under Presidents Bill Clinton and George W. Bush, and Fred Forman, an experienced technology executive and former I.R.S. associate commissioner for modernization, estimate $1.6 trillion could be collected within a decade from efforts to close the gap between taxes owed and collected. This is because they include, for example, modernizing outdated technological systems and improving taxpayer experiences with the I.R.S. — elements of the administration’s proposal whose revenue impact is not accounted for.” [Timothy F. Geithner, Jacob J. Lew, Henry M. Paulson Jr., Robert E. Rubin and Lawrence H. Summers Op-Ed for the New York Times, 6/9/2021]

Former Trump IRS Commissioner Charles Rettig Estimated A “Tax Gap” Of $1 Trillion Between What Is Owed And What Is Collected. In November of 2021, Reuters reported: “IRS Commissioner Charles Rettig, a Trump appointee, told Senators in April 2021 that the agency is ‘outgunned’ by increasingly sophisticated tax avoidance schemes that underreport business income and capital gains, leaving a ‘tax gap’ between owed and collected taxes as high as $1 trillion a year.” [Reuters, 11/1/2021]

William Gale From Tax Policy Center & The Brookings Institution Says “There’s Hundreds of Billions Of Dollars A Year That Are Not Being Collected.” In an interview with Federal News Network, William Gale, a senior fellow in Economic Studies and co-director of the Tax Policy Center at the Brookings Institution, stated that tax evasion is a “low hanging fruit” and “There’s hundreds of billions of dollars a year that are not being collected.” [Federal News Network, 9/24/2021]

Treasury Report: More Than A Quarter Of Unpaid Taxes Come From The Top 1% Of Earners. In October of 2021, Yahoo News reported: “A recent report from the U.S. Department of the Treasury found that more than a quarter of unpaid taxes come from the top 1% of earners and more than 20% come from the top 0.5%.” [Yahoo News, 10/29/2021]

The Build Back Better Act is the most significant climate bill in history.

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