The controversial joke was delivered during a pre-planned comedic sketch performed by the two politicians and Hamilton cast member Leslie Odom Jr.
"Thanks for the endorsement, Bill," Clinton began, quipping, "Took you long enough."
"Sorry, Hillary. I was running on CP time," de Blasio joked in response, in an apparent reference to "colored people time," a phrase stemming from the stereotype that black people are chronically late.
In a video of the skit, released by the mayor's office on Sunday night, the audience is heard laughing awkwardly at the joke, as one man in the crowd cries out, "No!"
"That's not – I don't, I don't like jokes like that, Bill," said Odom, who is black.
Clinton then interjected, "Cautious politician time. I've been there."
Media outlets were quick to pounce on the joke, calling it "awkward" and "cringe-worthy" at best, and "racist" at worst.
Twitter users were nothing short of stunned.
I still love how the awful "CP Time" joke bit from Clinton and DeBlasio seems right out of a Veep episode.— Jonathan Cohn (@JonathanCohn) 12 April 2016
Just saw the Hillary Clinton/Bill deBlasio “CP time” joke and I’m now convinced that the world isn’t real and we are living in a simulation.— Johnny Taylor, Jr. (@hipsterocracy) 11 April 2016
In an interview Monday, MSNBC host Chris Matthews told the mayor to "get a new joke writer." "All that stuff was a disaster," Matthews added. "It was a disaster."
De Blasio, whose wife, Chirlane McCray, is black, defended the joke during another interview on CNN on Monday night, saying, "It was clearly a staged show, it was a scripted show and the whole idea was to do the counterintuitive and say 'Cautious Politician Time.' "
"I think people are missing the point here," he added.
De Blasio's office later released a statement adding, "In an evening of satire, the only person this was meant to mock was the mayor himself, period. Certainly no one intended to offend anyone."
The joke comes as both Clinton and her husband, former President Bill Clinton, are facing backlash over his clash with Black Lives Matter protestors at a campaign event in Philadelphia last Thursday. It also comes just days before the New York primary on April 19.
As NPR put it, "the timing is unfortunate" – especially for a cautious politician.