Kevin Hassett, Director of the National Economic Council of the United States, stated on Tuesday that the country is still suffering from the impacts of stimulus spending related to the COVID-19 pandemic during the first year of former President Joe Biden's administration, and defended the economic handling methods of the Trump administration.
Hassett said in the program “Squawk Box” on CNBC: “This is indeed the biggest mistake we are still working hard to correct.”
These remarks came in the last few weeks of the mid-term election cycle. The core issues of this cycle were people's widespread concerns about affordability and inflation, and it seemed that the Democratic Party had a chance to make progress in Congress.
A memo from the Senate Majority Political Action Committee circulated on Tuesday morning urged Democratic candidates to put the issue of affordability “at the top of their agenda,” citing polls in battleground states that indicated attacks linking Republicans to rising healthcare costs, public utilities, gasoline prices, and other everyday expenses were more effective than mere corruption accusations.
This memorandum, based on a survey of 1,800 likely voters in nine swing states of the Senate conducted in August, suggests that Democrats should clearly link political decisions and corporate influence to higher household costs.
The memo states: "The strongest reason to continue opposing the Republicans is that they have increased our costs."
President Donald Trump and his senior officials often defend their administration's record by comparing its performance to that of the Biden era, or by attributing ongoing problems to the policies of the former president.
With less than two years until the 2024 presidential election, these claims seem to be losing some of their impact. Recent polls indicate that voter dissatisfaction with Trump's economic record and overall performance is on the rise.
After the host from CNBC mentioned the COVID-19 pandemic, Hassett stated that Trump's first administration approved stimulus measures of an appropriate scale related to the pandemic, but Biden continued with large-scale spending during his tenure.
Hassett said, "Our goal is to fill the gap, but not to go beyond that." He was referring to Trump's first term in office, when the COVID-19 pandemic began to spread in March 2020. "What Biden did was take all that spending and use it for other things, even though we didn't need that spending at all."
He said, "When President Trump left office last time – regarding affordability – inflation was 1.5%."
And then, when they started throwing money out like helicopters and continued to treat COVID-related expenditures as a baseline, inflation began to soar, and that is indeed the biggest mistake we are still trying to overcome.
In March 2021, Biden signed the $1.9 trillion American Rescue Plan. Many economists believe that this has exacerbated inflation in the United States, although the extent of its impact is still subject to debate.
Inflation during Biden's tenure rose significantly in the first two years of his administration, reaching a peak of around 9% in the summer of 2022. By the time Trump returned to the White House in January 2025, inflation had fallen back to 3%, but it has risen again this year due to the war between the United States and Iran, as well as Russia's ongoing war in Ukraine, which has put pressure on global energy supplies.
—— Luke Fountain contributed to this report.
