Biden’s $1.9 Trillion Pandemic-Relief Package Was Too Big, Senator Warner Says

(Bloomberg) -- Democratic Senator Mark Warner said that, in retrospect, President Joe Biden’s $1.9 trillion pandemic relief package last year was too large, though he played down its influence in spurring US inflation.

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“Was there too much in the American Rescue Plan on a relative basis? Absolutely,” Warner said on Bloomberg Television’s “Balance of Power with David Westin.”

Warner said he and other lawmakers at the time were worried about the economy unraveling. Some observers have argued that the size of the package sapped support for the administration’s longer-term social investment proposals.

With inflation running at a 40-year high, Republicans have put much of the blame on the stimulus Biden signed into law in March 2021. Warner noted that more pandemic-related stimulus was passed during former President Donald Trump’s administration, which included a $2.2 trillion package that took effect in March 2020 and another $900 billion measure in December of that year.

Warner, whose comments were highlighted by Senate Republicans, said that he didn’t think the Democratic spending measures have had much of an impact on inflation and that he didn’t regret voting for pandemic relief. Instead, he put much of the blame for the cost-of-living surge on the Federal Reserve, which he said was slow to raise interest rates.

“The Fed waited too long to start this process,” Warner said.

Economists at the Federal Reserve Bank of San Francisco wrote in March that pandemic-related fiscal stimulus passed during the Trump and Biden administrations helped push inflation higher in the US, though likely helped keep the economy from slowing.

Still, Warner raised concerns about spending. He told Bloomberg in a separate interview Tuesday that Democrats’ larger budget agenda was “way more than it should have been” before West Virginia Senator Joe Manchin whittled it down and they ultimately passed the Inflation Reduction Act.

Warner said a bipartisan budget deal including long-term spending and revenue changes to bring down the deficit would be good policy, citing rising federal interest payments as a reason to act.

“Is there an appetite? I hope so. Is there any movement on that at all? No,” Warner said. “Neither party has any credibility on this issue.”

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