President Joe Biden’s Build Back Better agenda has been dealt a haymaker blow after Sen. Joe Manchin, D-W.Va, made it clear he would not support passage of his climate and social spending bill. Now, investment bank Goldman Sachs warns that Manchin’s opposition will hurt economic growth.

In a research note to clients on Monday, Goldman Sachs economists assessed that the bill’s demise will cost the U.S. in the next year. Economists project that the U.S. economy will experience 2% growth in the first quarter, followed by 3% and 2.75% in the following two periods without the spending bill.

"A failure to pass BBB has negative growth implications," said Goldman Sachs economist Jan Hatzius in the report.

On Sunday, Manchin announced that he could not support the nearly $2 trillion proposal. True to his earlier gripes about the spending bill, Manchin cited his concerns about inflation and the national debt as being left unaddressed, which he contends would be unacceptable for his voters in West Virginia.

The White House furiously denounced Manchin in a statement after his announcement, with Press Secretary Jen Psaki accusing him of going back on commitments he made to Biden to support Build Back Better.

"Senator Manchin committed to the President, at his home in Wilmington, to support the Build Back Better framework that the President then subsequently announced," said Psaki in a statement.

“If his comments on FOX and written statement indicate an end to that effort, they represent a sudden and inexplicable reversal in his position, and a breach of his commitments to the President and the Senator’s colleagues in the House and Senate,” she continued.

The inflation concerns cited by Manchin are unlikely to abate soon and ease the way for a new spending package, Goldman Sachs cautioned. Core inflation metrics, like the consumer price index (CPI), are at levels not seen in decades and this is not projected to dissipate just yet.

Concern about the Omicron variant of COVID-19 is fueling concerns that short-term measures to address the virus will take precedence over long-term reforms like climate spending.

"With headline CPI reaching as high as 7% in the next few months in our forecast before it begins to fall, the inflation concerns that Sen. Manchin and others have already expressed are likely to persist, making passage more difficult," Goldman Sachs economists wrote. "The Omicron variant is also likely to shift political attention back to virus-related issues and away from long-term reforms."