Hassett: 'We're still working our way out from' Biden Covid spending

• Hassett argued Trump's first term approved appropriate stimulus to 'fill the hole' while Biden's $1.9 trillion American Rescue Plan in March 2021 represented excessive spending that exacerbated inflation
• Inflation peaked around 9% in summer 2022 under Biden, had declined by January 2025 when Trump returned to office, but has crept higher in 2026 due to U.S.-Iran conflict and Russia-Ukraine war pressures
• The economic messaging comes during midterm elections centered on affordability concerns, with Democrats poised to make congressional gains as Trump's economic approval appears to be losing potency with voters

Summary

Key Officials and Positions:

National Economic Council Director Kevin Hassett defended the Trump administration's economic policies on CNBC's "Squawk Box," attributing ongoing inflation challenges to Biden-era COVID-19 stimulus spending rather than current administration policies.

Main Arguments:

Hassett claimed the first Trump administration (2017-2021) implemented appropriate pandemic relief, aiming to "fill the hole, but not do more than that." He criticized Biden's $1.9 trillion American Rescue Plan, signed in March 2021, arguing it extended COVID spending unnecessarily and "helicopter-dropped money" into the economy.

Economic Data Points:

• Biden signed the $1.9 trillion American Rescue Plan in March 2021
• Inflation peaked around 9% in summer 2022 under Biden
• Inflation had moderated by January 2025 when Trump returned to office
• Inflation has recently increased due to U.S.-Iran conflict and ongoing Russia-Ukraine war impacting global energy supplies

Market Context:

The comments come during a midterm election cycle focused on affordability and inflation concerns, with Democrats positioned to make Congressional gains. Recent polls indicate declining voter approval of Trump on economic issues.

Expert Consensus:

Many economists acknowledge the American Rescue Plan contributed to elevated inflation, though the extent of its impact remains debated among experts.

Implications:

The administration continues deflecting current economic challenges to previous policies, though this messaging strategy appears less effective nearly two years after the 2024 election. Global conflicts affecting energy prices add complexity to the inflation narrative beyond domestic spending policies.