“Even if Congress extends the credit in the new year, the Treasury looks unlikely to make the January payment on time and might not make the February payment,” the firm wrote in a note to investors. “Those payments could be made retroactively, but this depends on eventual congressional action.”

The Senate seems increasingly unlikely to vote on the Biden proposal before the end of the year, which proponents say could leave nearly 10 million kids at risk of slipping into poverty. The Wall Street firm noted that should that occur, the driving motivation to extend child tax credits (CTC) could be lost, putting the entire package at risk.

“The probability that the BBB Act becomes law at all also looks lower,” Goldman wrote. “The year-end deadline to extend the CTC was the most important forcing event, and it is less clear what, if anything, will serve as a new deadline for action.”

Rising inflation could also weaken the act’s chances, it notes.

While Goldman says it still expects some version of the Build Back Better Act to pass, as there’s little on the legislative agenda for 2022 at this point, should it collapse, there would be some economic effects.

“If none of the spending in the BBB is approved, [we] estimate that GDP growth would be more than half a percentage point lower in 2022 (Q4/Q4 basis, vs. current forecast) and more than one-quarter of a percentage point lower in 2023,” analysts said.

If the bill is enacted early next year, though, Goldman expects only a modest negative impact on growth.