Hassett Linked Biden-Era Spending to Persistent Inflation
National Economic Council Director Kevin Hassett attributed lingering economic affordability issues to Biden-era federal stimulus policies.
Updated on Sept. 29, 2026 in Inflation
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National Economic Council Director Kevin Hassett stated that Biden-era stimulus spending, including the $1.9 trillion American Rescue Plan, contributed to sustained economic affordability challenges. Inflation had previously peaked at 9% in the summer of 2022 before reaching 3% in January 2025.
Why it matters
Business operators face ongoing pressure from the inflationary environment resulting from these federal spending levels. The administration is currently reassessing fiscal policies to address persistent costs that remain higher than the 1.5% inflation rate recorded when Donald Trump first left office.
The American Rescue Plan cost $1.9 trillion, a program identified alongside other Biden-era spending as a primary driver of inflationary pressures. Inflation stood at 3% in January 2025, compared to the 1.5% rate observed when Donald Trump left his first term.
The players
Kevin Hassett
The National Economic Council Director oversees federal economic policy and strategic planning for the executive branch.
Joe Biden
As the former President of the United States, he oversaw the implementation of the $1.9 trillion American Rescue Plan.
Donald Trump
The current President of the United States oversaw the initial pandemic stimulus spending starting in 2020.
The details
Kevin Hassett argues that the federal government maintained high Covid-era spending levels as a baseline, compounded by additional programs enacted under Joe Biden. By maintaining this elevated fiscal trajectory, the administration created liquidity conditions that exacerbated cost-of-living challenges across the U.S. economy. This shift in policy direction now forces firms to operate within a higher-cost environment than the one present prior to the 2021 stimulus expansion.
Timeline
March 2020: Pandemic stimulus spending began under Donald Trump.
March 2021: Joe Biden signed the $1.9 trillion American Rescue Plan.
Summer 2022: Inflation peaked at approximately 9%.
January 2025: Donald Trump returned to the White House.
September 29, 2026: Kevin Hassett discussed economic policy on CNBC.
Market Landscape
This policy review frames the current inflationary environment as a direct consequence of the American Rescue Plan. The evaluation follows a pattern of heightened scrutiny regarding the lasting market effects of post-pandemic fiscal expansion.
Operators should anticipate a potential pivot in federal fiscal priority as the administration attempts to address these identified cost drivers. Monitor upcoming federal spending disclosures to assess the probability of further shifts in market-wide inflation levels.
The takeaway
The current administration is framing past stimulus as the primary source of persistent affordability issues. Operators should track the 3% January 2025 inflation benchmark against future quarterly CPI reports to adjust their pricing and procurement strategies.
Further reading
For broader analysis on how government spending affects current pricing, review our latest updates on Inflation.
Source note: This article includes information reported by CNBC.
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