White House blames Biden-era stimulus for persistent U.S. inflation pressures

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Biden stimulus and inflation

Highlights

National Economic Council Director Kevin Hassett blamed persistent U.S. inflation on $1.9 trillion stimulus spending signed by Biden in March 2021.
U.S. inflation peaked at about 9% in summer 2022 under Biden, then slowed to 3% by January 2025 before edging higher due to new external shocks.
Voter concerns about rising living costs persist amid midterm elections, but recent polls show declining confidence in both Biden's and Trump's economic management.

Hassett links current price strains to 2021 spending

As reported by CNBC, National Economic Council Director Kevin Hassett said Tuesday that the U.S. is still dealing with the fallout from Covid-19 stimulus spending approved during former President Joe Biden's first year in office. Speaking on CNBC's “Squawk Box,” Hassett defended the Trump administration's handling of the economy and argued that excessive spending after the initial pandemic response remains a key policy error.

Hassett said the first Trump administration aimed to offset the economic shock from Covid without overspending. He argued that Biden continued large-scale spending after the immediate crisis had passed, adding that inflation was at 1.5% when Trump left office at the end of his first term and then accelerated after what he described as money being effectively dropped into the economy.

Biden signed the $1.9 trillion American Rescue Plan in March 2021. Many economists say the package exacerbated U.S. inflation, although there is still debate over the scale of its impact.

Economic argument faces tougher political test

The remarks come in the final weeks of a midterm election cycle in which voter concerns about affordability remain widespread and Democrats appear poised to make gains in Congress. Trump and senior officials regularly contrast their economic record with the Biden era, or blame Biden's policies for creating lingering problems.

Nearly two years after the 2024 presidential election, that line of attack appears to be losing force, with recent polls showing voters increasingly disapprove of Trump on the economy and more broadly. Inflation under Biden rose sharply during his first two years in office and peaked at about 9% in the summer of 2022.

Price growth later slowed to 3% by the time Trump returned to the White House in January 2025, but it has edged higher this year as the U.S. war against Iran and Russia's continuing war in Ukraine put added pressure on global energy supplies.

In our earlier coverage of Republicans’ midterm advertising push, we noted that the party planned to outspend Democrats on TV and digital ads to defend vulnerable seats as voter frustration with high prices shaped the campaign climate. We also highlighted how GOP strategists were emphasizing issue-based messages such as taxes and crime, while President Donald Trump’s prominent presence in campaign-style ads complicated efforts to keep races localized.

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