White House National Economic Council Director Kevin Hassett said the United States is still dealing with the aftereffects of the COVID-19 pandemic stimulus spending from former President Biden's era.
The comments, made on the program "Squawk Box," come with only a few weeks left before the midterm elections, as voters are broadly worried about the high cost of living and inflation.
Hassett argued that the pandemic stimulus funds rolled out during Trump's first administration were moderate and reasonable. The White House National Economic Council director defended the Trump administration's economic policies on Tuesday's program, saying the U.S. is still bearing the consequences of the COVID-19 fiscal stimulus introduced in the first year of former President Biden's term. Speaking on "Squawk Box," Hassett said: "This was a major policy mistake, and we are still cleaning up the mess from it to this day."
At the time, the U.S. was in the final sprint of the midterm elections, with voters widely concerned about the cost of living and inflation, and polls showing Democrats are expected to pick up more seats in the congressional elections. On Tuesday morning, an internal memo released by a Senate majority party political action committee circulated, urging Democratic candidates to put the cost of living at the center of their campaigns. Polls in battleground states show that attack messaging tying Republicans to rising prices for health care, utilities, gasoline and other daily necessities is more effective than focusing solely on corruption issues. The memo, based on an August survey of 1,800 likely voters across 9 key Senate battleground states, argues that Democrats should directly link rising household living costs to political decisions and corporate lobbying influence. The memo said: "The strongest argument against Republican candidates remains that Republicans have driven up people's living expenses."
President Trump and his senior officials often use the Biden era as a comparison to defend the current administration's record, or to blame the previous administration's policies for various lingering problems. Nearly two years after the 2024 presidential election, the influence of this argument is weakening; recent polls show voters' dissatisfaction with Trump's handling of the economy and his overall governance is rising.
After the host raised the topic of the COVID-19 pandemic, Hassett said the scale of pandemic stimulus funds introduced during Trump's first term was just right, but that after Biden took office, large-scale fiscal spending continued. Referring to Trump's first term when the COVID-19 pandemic broke out in March 2020, Hassett said: "Our goal was only to fill the economic gap, not to overstimulate. But after Biden got this policy tool, even when it was no longer needed, he still spent the money elsewhere." He said: "At the end of Trump's previous term - looking only at the cost of living, inflation was still low at that time."
Hassett pointed out: "But afterward, the government treated high pandemic-era spending as a policy baseline, equivalent to 'helicopter money,' and inflation took off. And the aftermath of this major mistake is something we are still working to digest to this day." Biden signed the $1.9 trillion American Rescue Plan in March 2021. Many economists believe the bill worsened U.S. inflation, but there is still debate in the economics profession over the bill's actual contribution to inflation. Inflation surged sharply in Biden's first two years in office, peaking at nearly 9% in the summer of 2022. By the time Trump returned to the White House in January 2025, inflation had already fallen; but this year, U.S. military conflict with Iran combined with the ongoing Russia-Ukraine war has hit global energy supplies, and inflation has risen again.
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