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Former President Barack Obama’s top economic advisers appear to be souring on the economic policies of his former vice president, voicing frustrations that President Biden hasn’t heeded their concerns about the burgeoning inflation crisis.
Steven Rattner, who served as counselor to the Treasury secretary in the Obama administration, issued a scathing op-ed Tuesday saying Biden’s $1.9 trillion American Rescue Plan, passed in March, was the “original sin” that contributed materially to today’s inflation, which hit the highest annual rate since November 1990, according to the Labor Department.
Steven Rattner speaks during the Aspen Ideas Festival in Aspen, Colorado, on July 1, 2014. (Matthew Staver/Bloomberg via Getty Images)
“How could an administration loaded with savvy political and economic hands have gotten this critical issue so wrong?” Rattner wrote in The New York Times. “They can’t say they weren’t warned – notably by Larry Summers, a former Treasury secretary and my former boss in the Obama administration, and less notably by many others, including me. We worried that shoveling an unprecedented amount of spending into an economy already on the road to recovery would mean too much money chasing too few goods.”
Rattner, who donated thousands of dollars to Biden’s 2020 presidential campaign, called on the president to “come clean” with voters about the real impact of his spending plans on inflation, including his Build Back Better proposal, which is estimated to add $800 billion or more to the deficit over the next five years.
Rattner was once lauded as a “leading US public intellectual” by Biden’s White House chief of staff Ronald Klain, who came under fire last month after retweeting a comment claiming inflation concerns were only “high-class problems.”
Meanwhile, Summers, who served as director of the National Economic Council under Obama and Treasury secretary under President Bill Clinton, said earlier this month that his predictions about stimulus setting off inflationary pressures “have come true.”
“I think it’s almost certain to last for another six to nine months, and it could well last longer,” he said.
Larry Summers, former Treasury secretary and White House economic adviser, is interviewed by Fox News’ Maria Bartiromo on May 24, 2017, in New York City. (Robin Marchant/Getty Images)
Summers, who also donated thousands to Biden’s 2020 presidential campaign and an additional $50,000 to Biden’s joint fundraising committee with the Democratic National Committee, according to FEC records, had predicted in an earlier op-ed there was a “chance” the American Rescue Plan could “set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability.”
But unlike the American Rescue Plan, Summers said last week that he supports Biden’s Build Back Better and bipartisan infrastructure plans because of the tax hikes that come with them.
Despite the warnings about over-stimulating the economy, White House officials fervently downplayed inflation concerns throughout the spring and summer. Biden only recently pivoted, saying his spending plans will actually decrease inflation because they’ll get more people to participate in the economy.
“Does the WH owe Larry Summers an apology?” Politico Playbook asked last week.
President Biden greets people after delivering a speech on infrastructure in Woodstock, New Hampshire, on Nov. 16, 2021. (John Tully/Getty Images)
The White House responded to the comments in a statement to Fox News defending the American Rescue Plan.
“The American Rescue Plan saved our country from economic catastrophe, helped get millions of Americans back to work, and helped make sure American families had money in their pockets from tax cuts and rising wages,” a White House official said.
“That doesn’t make rising prices due to global supply chain issues, affecting countries around the world, any less frustrating for the American people, but there are no regrets about the most robust economic recovery in history and an historic vaccination effort that has helped keep us and our kids safe,” the official added.