Biden and his team were addressing critics from both parties on Friday after Larry Summers, a former top White House economic adviser in the Obama administration, penned an op-ed warning that the administration’s massive spending package could funnel too much money into the economy, eventually sparking high inflation and crowding out other progressive policy priorities.
The president and his top economic advisers suggested criticism of their proposal was overblown and misguided. In public remarks and private conversations, Biden and his aides brushed off the idea that Summers would have much influence on the course of the debate and emphasized that the risks of spending too little were far greater than any concerns over spending too much.
“I think he’s wrong. I think he is wrong in a pretty profound way,” Jared Bernstein, a member of Biden’s Council of Economic Advisers, said on CNN.
Aides also downplayed Summers’ influence in Bidenworld after he served as an informal adviser during the campaign, pointing out Biden did not bring him into the administration. House Speaker Nancy Pelosi, after meeting with Biden and other lawmakers at the White House to discuss the relief plan, laughed off the possibility that Summers had come up during the conversation.
Economic advisers noted the White House has considered the risks of rising inflation and that the Federal Reserve has tools to combat it if needed. Bernstein said those concerns are far outweighed by other economic risks like persistent unemployment and permanent business closures, telling reporters that Biden’s economic aides are unified in their support for their plan.
“The team has all of our oars in the water pulling in the same direction on that,” Bernstein said during a White House press briefing.
Discussions about the ultimate size and shape of the rescue package are ongoing, but Democrats in Congress cleared a major obstacle Friday. House Democrats voted to adopt the Senate-passed budget resolution with reconciliation instructions, which will allow the party to muscle through a relief bill without relying on GOP votes.
The January jobs numbers has only emboldened the White House’s push for their proposal, as the numbers showed virtually no private-sector job growth for the month at a time when 10 million Americans remained unemployed.
The Labor Department report also showed hundreds of thousands more workers dropping out of the labor force altogether last month, while more than 4 million people have now been jobless for six months or more — signs of economic scarring that can portend long-term damage.
“The numbers that we got this morning really do underscore the cost of inaction,” Heather Boushey, another member of the Council of Economic Advisers, said in an interview on Bloomberg TV. “It underscores that without further aid, our economy is going to continue to struggle.”
The jobs report served as the administration’s strongest argument against the Summers piece, which circulated around the West Wing but which several people inside and close to the White House noted would have little sway over the president’s or his advisers’ thinking.
“They knew that this argument existed,” said Austan Goolsbee, a top economic adviser in the Obama administration who informally advised Biden’s presidential campaign.
“Their view was, the jobs numbers before today were clearly deteriorating, and then we got another number today that shows this is a trend,” he continued. “That’s why they’re pushing for bigger.”