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

The U.S. is still dealing with the impact of Covid 19-related stimulus spending from former President Joe Biden‘s first year in office, National Economic Council Director Kevin Hassett said Tuesday as he defended the Trump administration’s handling of the economy.

“That’s really the big mistake that we’re still working our way out from,” Hassett contended on CNBC’s “Squawk Box.”

The comment came in the final weeks of a midterm election cycle centered on widespread concerns about affordability and inflation, with Democrats appearing poised to make gains in Congress.

A Senate Majority PAC memo circulated Tuesday morning urges Democratic candidates to keep affordability “front-and-center,” citing battleground polling that found attacks tying Republicans to higher prices for healthcare, utilities, gas and other everyday expenses tested more strongly than corruption arguments on their own.

The memo, based on an August survey of 1,800 likely voters across nine Senate battleground states, argues Democrats should explicitly connect political decisions and corporate influence to higher household costs.

“The strongest reason to vote against a Republican continues to be that they have raised our costs,” the memo says.

President Donald Trump and his top officials regularly defend their administration’s record by contrasting it favorably with the Biden era, or blaming the former president’s policies for creating lingering problems.

Nearly two years since the 2024 presidential election, those claims appear to be losing some potency, with recent polls showing voters increasingly disapprove of Trump on the economy and in general.

After a CNBC host brought up Covid, Hassett argued that Trump’s first administration approved the right amount of pandemic-related stimulus, but that heavy spending continued under Biden.

“We wanted to fill the hole, but not do more than that,” Hassett said of Trump’s first term, which overlapped with the spread of Covid in March 2020. “What Biden did is he took all that spending and he decided to spend it on other things, even though we didn’t need it.”

“When President Trump left office last time — talk about affordability — inflation was one and a half percent,” he said.

“And then it took off when they helicopter-dropped money by keeping as a baseline the Covid spending, and that’s really the big mistake that we’re still working our way out from,” Hassett argued.

Biden signed the $1.9 trillion American Rescue Plan in March 2021, and many economists say it exacerbated U.S. inflation, though there is debate about the extent of its impact.

Inflation under Biden rose sharply during his first two years in office, peaking around 9% in summer of 2022. It declined to 3% by the time Trump returned to the White House in January 2025, and has crept higher this year as the U.S. war against Iran and Russia’s continuing conflict in Ukraine heap pressure on global energy supplies.