Biden and his team spoke to critics from both parties Friday after a letter from Larry Summers, a former top White House economic adviser in the Obama administration an op-ed Warning that the government’s massive spending package could inject too much money into the economy, which could eventually trigger high inflation and crowd out other progressive political priorities.
The president and his top economic advisers suggested that criticism of their proposal was excessive and misguided. In public statements and private conversations, Biden and his co-workers brushed off the idea that Summers would have a major impact on the course of the debate, and stressed that the risk of spending too little was far greater than the concern of over-spending.
“I think he’s wrong. I think he’s deeply wrong,” Jared Bernstein, a member of the Biden Council of Economic Advisers, told CNN.
Aides also downplayed Summers’ influence at Bidenworld after serving as an informal advisor during the campaign, pointing out that Biden had not accepted him into the administration. House spokeswoman Nancy Pelosi laughed after meeting Biden and other White House lawmakers about the relief plan over the possibility that Summers had appeared during the conversation.
Economic advisers noted that the White House has considered the risks of soaring inflation and that the Federal Reserve has tools to address it if necessary. Bernstein said these concerns far outweighed them through other economic risks such as persistent unemployment and permanent business closings, telling reporters that Biden’s economic workers are in agreement in their support for their plan.
“The team has all of our oars in the water, which are pulling in the same direction,” said Bernstein during a press conference at the White House.
Discussions of the final size and shape of the bailout continue, but Democrats in Congress overcame a major obstacle on Friday. House Democrats voted to pass the Senate-approved budget resolution with reconciliation instructions that will allow the party to pass an auxiliary law without relying on GOP votes.
January employment numbers only encouraged the White House’s efforts on their proposal, as numbers showed virtually no private sector employment growth for the month that 10 million Americans remained unemployed.
The Labor Department’s report also showed that hundreds of thousands more workers left the workforce last month, while more than 4 million people have been unemployed for six months or more – signs of economic scars that may indicate long-term damage.
“The numbers we got this morning really underscore the cost of inaction,” said Heather Boushey, another member of the Board of Economic Advisers, in an interview with Bloomberg TV. “It underscores that our economy will continue to struggle without further help.”
The job report was the government’s strongest argument against the piece of Summers, which circulated in the West Wing, but which several people inside and near the White House stated would have little impact on the thinking of the President or his advisors.
“They knew that argument existed,” said Austan Goolsbee, a top economic advisor in the Obama administration who informally advised Biden’s presidential campaign.
“Their view was that the employment numbers went down significantly before today, and then we have another number today that shows that this is a trend,” he continued. “That’s why they’re pushing for more.”