Biden economic adviser calls Summers 'flat-out wrong' with inflation remarks

Top White House economic adviser Jared BernsteinJared BernsteinMore than 7 million Americans to lose jobless benefits on Labor Day Job openings hit 10.1 million in third straight record-breaking month Deficit Ponzi schemes meet cold fusion MORE on Friday pushed back on public criticism from former Obama economic adviser Larry Summers, who raised concerns in a Washington Post op-ed about the risks to inflation posed by President Biden's $1.9 trillion coronavirus relief proposal.

Bernstein, a member of the Council of Economic Advisers, told reporters at a White House press briefing that he disagreed with Summers's op-ed and that the former Treasury secretary was “flat-out wrong” to suggest Biden administration officials were dismissive of the inflationary risks.

Bernstein also stood firm in the White House’s position that the risk of doing too little outweighs the risk of passing a big relief package.

ADVERTISEMENT

“I think that the idea now is that we have to hit back hard, we have to hit back strong if we’re going to finally put this dual crisis of the pandemic and the economic … pain that it has engendered behind us,” Bernstein said. “We’ve constantly argued that the risks of doing too little are far greater than the risks of going big, providing families and businesses with the relief they need to finally put this virus behind us.”

Summers, who was a top economic adviser to former President Obama and served as Treasury secretary during the Clinton administration, wrote in the Post that such a large stimulus package could “set off inflationary pressures of a kind we have not seen in a generation.”

“This will be manageable if monetary and fiscal policy can be rapidly adjusted to address the problem,” Summers wrote. “But given the commitments the Fed has made, administration officials’ dismissal of even the possibility of inflation, and the difficulties in mobilizing congressional support for tax increases or spending cuts, there is the risk of inflation expectations rising sharply.”

Bernstein on Friday repeatedly took issue with that assertion, saying Summers was wrong. Bernstein also said Biden’s economic team was unanimous in agreeing on the need to pass a robust package to address the crisis.

“With respect to Larry in his piece, it’s just flat-out wrong that our team is quote dismissive of inflationary risks,” Bernstein said. “Janet YellenJanet Louise YellenBiden pushes back at Democrats on taxes Five questions and answers about the debt ceiling fight White House touts Nobel economists' support for Biden agenda MORE is our Treasury secretary. She knows a little something about inflationary risks.”

Yellen is a former chair of the Federal Reserve.

The briefing took place after Biden delivered remarks pushing for the swift passage of his $1.9 trillion proposal, signaling he’s ready to move forward without Republican support after seeking bipartisan approval for a coronavirus relief bill. He warned that the economy is still clearly “in trouble,” citing new Labor Department figures showing employers added only 49,000 jobs in January.