CNN
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President Joe Biden delivered his annual State of the Union tackle on Thursday. His statements had been principally correct, a CNN truth test discovered, however he additionally made a smattering of claims that had been false, deceptive or missing key context.
Biden repeated his acquainted deceptive boast about how he had supposedly decreased the federal price range deficit, failing to elucidate that the decline overwhelmingly occurred as a result of emergency pandemic spending from President Donald Trump’s tenure expired as schedule. He falsely claimed that “not anymore” would massive corporations be capable to pay no federal earnings tax, overstating the influence of the 15% company minimal tax he signed into legislation.
He misleadingly cited an alternate calculation from economists in his administration as if it was an precise federal tax price paid by billionaires. And he not noted context in discussing Covid-19 deaths, suggesting that much more deaths occurred through the Trump period than truly did.
Sen. Katie Britt of Alabama made few particular assertions of truth throughout her official Republican response to Biden’s tackle. However Britt did falsely say, in current tense, that inflation is at a 40-year low; it not is.
Here’s a truth test of those claims and others.
Biden on Trump and the nationwide debt
Biden criticized the fiscal administration of former President Donald Trump throughout his State of the Union tackle, claiming, “They added extra to the nationwide debt than any presidential time period in American historical past. Test the numbers.”
Info First: Biden’s numbers are appropriate; the nationwide debt rose from about $19.9 trillion to about $27.8 trillion throughout Trump’s tenure, a rise of about 39% and greater than in every other four-year presidential time period, partly due to Trump’s major tax cuts. However it’s an oversimplification responsible presidents alone for debt incurred throughout their tenures. A number of the Trump-era enhance within the debt was as a result of trillions of {dollars} in emergency Covid-19 pandemic relief spending that handed with bipartisan help and due to spending required by safety-net applications, reminiscent of Medicare, Medicaid and Social Safety, that had been created by earlier presidents.
The nationwide debt has continued to extend underneath Biden. As of the day earlier than Biden’s tackle, it was about $34.4 trillion, federal figures show – a rise of about 24% throughout his tenure.
From CNN’s Katie Lobosco and Daniel Dale
Biden claimed that the financial system has added “800,000 new manufacturing jobs” throughout his administration.
Info first: Biden’s determine is appropriate. The US financial system added 791,000 manufacturing jobs from Biden’s first full month in workplace, February 2021, by means of January 2024, the final month for which Bureau of Labor Statistics data is out there – although it’s price noting that the progress largely occurred in 2021 and 2022 (with 746,000 manufacturing jobs added beginning in February 2021) earlier than a comparatively flat 2023.
From CNN’s Daniel Dale and Alicia Wallace
Simply as he’s carried out on the marketing campaign path, Biden touted his administration’s efforts to scale back the burden of prescription drug prices. In his tackle, he additionally identified the financial savings for taxpayers.
“That’s not simply saving seniors cash, it’s saving taxpayers cash,” Biden stated, referring to the Inflation Discount Act, which contained a number of measures to scale back drug costs. “We reduce the federal deficit by $160 billion.”
Info First: It’s true that two of the principle drug worth provisions within the Inflation Reduction Act, which Democrats pushed by means of Congress in 2022, are anticipated to scale back the deficit by $160 billion, in keeping with the nonpartisan Congressional Funds Workplace. In whole, the legislation’s drug measures are anticipated to scale back the deficit by $237 billion, although delaying the implementation of a Trump administration drug rebate rule accounts for the distinction.
The Inflation Discount Act licensed Medicare to barter the costs of sure pricey prescribed drugs for the primary time. This measure is predicted to avoid wasting $98.5 billion over a decade, in keeping with the CBO. Negotiations for the preliminary 10 medicine are underway. The ultimate costs shall be made public by September and take impact in 2026.
The legislation additionally requires drugmakers to pay a rebate to the federal authorities in the event that they increase the costs of sure drugs quicker than the speed of inflation. That is anticipated to avoid wasting $63.2 billion over a decade, in keeping with the CBO.
From CNN’s Tami Luhby
Biden and the deficit
Biden stated: “I’ve been delivering actual ends in fiscally accountable methods.”
“We’ve already reduce the federal deficit – we’ve already reduce the federal deficit of over $1 trillion,” he stated.
Info First: Biden’s declare leaves out such vital context that it’s deceptive. Whereas the annual federal budget deficit was greater than $1 trillion decrease within the 2023 fiscal 12 months than it was in each the 2020 fiscal 12 months (underneath President Donald Trump) and the 2021 fiscal 12 months (partially underneath Trump and partially underneath Biden), analysts have repeatedly noted that Biden’s personal actions, together with legal guidelines he has signed and govt orders he has issued, have had the general impact of worsening annual deficits, not lowering them. As in past remarks, Biden didn’t clarify that the primary reason the deficit fell by a document quantity throughout his tenure was that it had skyrocketed to a document excessive on the finish of Trump’s time period due to bipartisan emergency pandemic aid spending, then fell as anticipated when that spending expired as deliberate.
“The deficit is a trillion {dollars} decrease, roughly, than when President Biden took workplace. That’s true. However that’s pushed not as a result of he ‘decreased’ the deficit by a trillion {dollars}, however as a result of when he took workplace it was the center of Covid and we had been quickly injecting big sums of cash into the financial system,” Marc Goldwein, senior vp on the Committee for a Accountable Federal Funds, an advocacy group that promotes deficit discount and tracks the problem, stated in a February interview.
The deficit hit a document of about $3.1 trillion underneath Trump amid the hefty pandemic-related spending in fiscal 2020. The deficit then fell underneath Trump and Biden in fiscal 2021 (to about $2.8 trillion) and once more underneath Biden in fiscal 2022 (to about $1.4 trillion). Nevertheless it then rose in fiscal 2023 (to about $1.7 trillion). And the soar from 2022 to 2023 would have been much bigger, from about $1 trillion in 2022 to about $2 trillion in 2023, if not for a Treasury Department accounting decision associated to the Biden scholar debt cancellation program the Supreme Courtroom blocked earlier than it got here into impact.
The nonpartisan Congressional Funds Workplace projects that the deficit will decline barely in fiscal 2024, to about $1.5 trillion. Regardless, all the Biden-era deficits are among the biggest in US history.
Components out of a president’s management, like rates of interest hikes, have performed a task in preserving deficits excessive underneath Biden. And Biden has signed some deficit-fighting payments; his signature Inflation Discount Act of 2022 is predicted to convey down deficits by a total of more than $230 billion over a decade, whereas the Fiscal Accountability Act of 2023 is predicted to cut a cumulative $1.5 trillion from federal deficits over a decade.
Nonetheless, Biden’s actions have clearly added to deficits. These actions embody a pandemic relief law, a bipartisan infrastructure law, a bipartisan legislation to spur semiconductor manufacturing, a boost to meals stamp advantages and an extension of the Trump-era pandemic pause on federal scholar mortgage repayments.
Biden can fairly say that his insurance policies have contributed to a powerful financial restoration that has boosted tax revenues and thus eaten into deficits. On the entire, although, Goldwein stated deficits underneath Biden have been “greater than they in any other case would have been due to laws President Biden has signed into legislation and govt actions he’s taken.”
From CNN’s Daniel Dale
Biden claimed the financial system created a document 15 million jobs within the first three years of his time period.
Info First: Biden’s declare is appropriate: the US financial system added about 14.8 million jobs between Biden’s first full month in workplace, February 2021, and January 2024, extra jobs than had been added in any earlier four-year presidential time period. Nevertheless, it’s vital to notice that Biden took workplace in an uncommon pandemic context that makes significant comparability to different durations very tough.
Biden turned president lower than a 12 months after the US financial system had shed practically 22 million jobs over two months, March 2020 and April 2020, due to the Covid-19 pandemic. The roles restoration then began immediately after that, underneath then-President Donald Trump, however there was nonetheless an unprecedented gap to fill when Biden took workplace.
Nonetheless, Biden is free to argue that his stimulus legislation and different insurance policies have helped the nation achieve jobs quicker than it in any other case would have. The US has had an extraordinarily strong labor market underneath Biden, and its general financial restoration from the pandemic has outpaced those of many other major countries.
From CNN’s Daniel Dale
Biden cited a 2021 report from the Institute on Taxation and Financial Coverage assume tank that discovered that 55 of the nation’s largest firms had made $40 billion in revenue of their earlier fiscal 12 months however not paid any federal company earnings taxes. He stated, “Keep in mind in 2020, 55 of the most important corporations in America made $40 billion and paid zero in federal earnings taxes. Zero. Not anymore. Because of the legislation I wrote and we signed, massive corporations need to pay a minimal of 15%.”
Info First: Biden’s “not anymore” declare is fake, an exaggeration. Whereas his 15% company minimal tax will cut back the variety of massive corporations that don’t pay any federal taxes, it’s not true that “not anymore” will any massive firm – reminiscent of those on the record of 55 corporations Biden talked about – ever accomplish that. That’s as a result of the minimal tax, on the “ebook earnings” corporations report back to traders, solely applies to corporations with at the least $1 billion in common annual earnings. In line with the Institute on Taxation and Financial Coverage, solely 14 of the businesses on its record of 55 non-payers reported having US pre-tax earnings of at the least $1 billion.
In different phrases, there’ll clearly nonetheless be some massive and worthwhile firms paying no federal earnings tax regardless of the existence of the tax. The precise quantity isn’t identified.
Matthew Gardner, a senior fellow on the Institute on Taxation and Financial Coverage, instructed CNN in 2022 that the brand new tax is “an vital step ahead from the established order” and that it will increase substantial income, however he additionally stated: “I wouldn’t wish to assert that the minimal tax will finish the phenomenon of zero-tax worthwhile firms. A extra correct phrasing can be to say that the minimal tax will *assist* make sure that *essentially the most worthwhile* firms pay at the least some federal earnings tax.”
There are many nuances to the tax; you possibly can learn extra specifics here. Requested for remark in early 2023, when Biden made the same declare, a White Home official instructed CNN: “The Inflation Discount Act ensures the wealthiest firms pay a 15% minimal tax, exactly the firms the President centered on through the marketing campaign and in workplace.”
From CNN’s Daniel Dale
Biden claimed throughout his State of the Union tackle Thursday evening that violent crime has fallen to one in all its lowest ranges in “greater than 50 years.”
Info First: That is true, at the least primarily based on preliminary 2023 information that must be handled with warning. The preliminary 2023 information printed by the FBI, working by means of the third quarter of the 12 months, showed that violent crime was down 8.2% in comparison with the identical interval in 2022 – a decline that may be “traditionally massive” for a 12 months, crime information knowledgeable Jeff Asher wrote in a December article. Asher wrote: “The quarterly information exhibits violent crime down in massive cities, small cities, suburban counties, and rural counties, just about throughout the board.”
Asher, co-founder of the agency AH Datalytics, instructed CNN in late February that, if the decline in reported violent crime for the total 12 months of 2023 ended up being better than 1.6%, 2023 would have the bottom violent crime price since 1970. The 2022 price was the second-lowest since 1970, worse than solely 2019.
As all the time, whether or not crime is rising or falling, it’s important to note that it’s notoriously tough to pinpoint the explanations that crime has elevated or decreased at any given time, since there’s a lengthy record of financial, social and political components at play; the influence of the president is unclear.
From CNN’s Daniel Dale and Piper Hudspeth Blackburn
Biden, as he was discussing the state of the nation 4 years earlier, stated greater than 1 million American lives had been misplaced to Covid-19, implying it was underneath the Trump administration
Info First: Biden’s determine wants context. Many lives had been misplaced to Covid-19 through the Trump administration, however the US didn’t attain its millionth dying till Could 2022 when Biden was in workplace.
Whereas there have been a major variety of lives misplaced to Covid through the Trump administration, on President Donald Trump’s final full day in workplace the US dying depend reached at the least 400,000, according to Johns Hopkins University. At that time through the pandemic there had been a winter surge in instances and somebody was dying from the virus within the US every 26 seconds, in keeping with KFF, a well being coverage and analysis group. The dying price from Covid-19 within the US on the time was decrease than in lots of different nations, however with the nation’s massive inhabitants, the dying numbers exceeded all different nations at the moment.
Formally the US surpassed a million deaths from Covid in Could 2022 through the Biden administration. As of this February, greater than 1.18 million folks within the US have died from Covid-19 according to the US Centers for Disease Control and Prevention.
From CNN’s Jen Christensen
Touting the financial system throughout his presidency, Biden stated, “Unemployment at 50-year lows.”
Info First: This wants context.
The unemployment price did hit a five-decade low throughout two months of early 2023, 3.4%, and it has since remained close to that level – however the newest obtainable unemployment price, 3.7% for January, is greater than the speed was during nine months under President Donald Trump in 2019 and pre-pandemic 2020. (The speed then skyrocketed on account of the pandemic, and it was 6.4% the month Biden took workplace in January 2021.)
From CNN’s Daniel Dale
Biden stated, “A document 16 million Individuals are beginning small companies, and every one is a bit act of hope.”
Info First: Biden’s declare is correct primarily based on federal information, although there is a crucial nuance to notice. Greater than 16.3 million enterprise functions had been filed through the Biden presidency as of February 17, official federal data show, essentially the most over any interval of the identical size because the information sequence started within the mid-2000s. It’s price noting that not all enterprise functions flip into precise companies. Nevertheless, so-called “excessive propensity” enterprise functions, these thought to have a excessive chance of turning right into a enterprise with staff, have also set records under Biden.
The spike in general enterprise functions started within the second half of 2020 underneath President Donald Trump and accelerated underneath Biden in 2021; the variety of functions then remained excessive in 2022 after which narrowly set a new record in 2023. There are numerous causes for the pandemic-era boom in entrepreneurship, which started after hundreds of thousands of Individuals misplaced their jobs in early 2020. Amongst them: some newly unemployed employees seized the second of disruption to start out their very own enterprises; Individuals had extra cash from stimulus payments signed by Trump and Biden; rates of interest had been notably low till the sequence of price hikes that started within the spring of 2022.
From CNN’s Daniel Dale
Biden as soon as once more touted the influence that the short-term enhancement to the child tax credit – a key provision within the 2021 American Rescue Plan Act – had on lowering the poverty price amongst kids. He known as on Congress to convey again the now-expired beefed up credit score.
“In actual fact, the kid tax credit score I handed through the pandemic reduce taxes for hundreds of thousands of working households and reduce baby poverty in half,” he stated.
Info First: Biden’s assertions are true, although the profit solely lasted for the one 12 months the short-term enhancement was in impact. Little one poverty elevated in 2022 to a price greater than in 2020.
The American Rescue Plan Act, which Democrats pushed by means of Congress in March 2021, elevated the dimensions of the credit score for sure households, enabled many extra mother and father to say it and distributed half of it on a month-to-month foundation.
That despatched child poverty – as measured by the Supplemental Poverty Measure – to a document low 5.2% in 2021, a drop of 46% from 2020, when the speed was 9.7% in keeping with the US Census Bureau. The Supplemental Poverty Measure, which started in 2009, takes under consideration sure non-cash authorities help, tax credit and wanted bills.
However in 2022, baby poverty soared to 12.4%, roughly corresponding to the place it was previous to the pandemic in 2019. It was the biggest soar in baby poverty because the Supplemental Poverty Measure started.
The Home not too long ago handed a tax invoice that may once more expand the child tax credit quickly, although the increase wouldn’t be as beneficiant because it was in 2021. Nevertheless, the laws is now caught within the Senate, and it’s unclear whether or not it has the votes to move.
From CNN’s Tami Luhby
In his State of the Union tackle, President Joe Biden stated that the hole between the quantity of products the US imports from China and the quantity it exports to China was the narrowest in additional than 10 years.
“Our commerce deficit with China is right down to the bottom level in over a decade,” Biden stated. “We’re standing up towards China’s unfair financial practices.”
Info First: What Biden stated is true however wants context. The US commerce deficit with China in 2023 was $279 billion, the US Commerce Division reported earlier this 12 months. That was the bottom it has been since 2010.
However the motive for the narrowing commerce hole isn’t due to any Biden administration coverage. Inflation has pushed American customers away from discretionary purchases, reminiscent of electronics – stuff that’s primarily made in China. As an alternative, they’re shopping for extra non-discretionary objects, reminiscent of groceries.
On high of that, the Trump administration’s tariffs on Chinese language items, which Biden’s administration left in place, have made Chinese language items much less standard for Individuals, due to the added price.
That’s why, for the primary time in 20 years, the US imported extra items from a rustic aside from China: Mexico exported extra items to the US than every other nation final 12 months.
The US commerce hole didn’t simply slender with China: It shrank dramatically with most nations. The whole US commerce deficit was $773.4 billion final 12 months, an almost 19% decline from 2022. That’s the biggest annual decline within the commerce deficit since 2009. Additionally contributing to the narrowing commerce hole: a weaker greenback that made US items price much less abroad.
From CNN’s Dave Goldman
Presidnet Joe Biden claimed throughout his State of the Union tackle that the common federal tax price for billionaires is 8.2%.
Info First: Biden used the 8.2% determine in a method that was deceptive. As in previous speeches, Biden didn’t clarify that the determine relies on an alternate calculation from economists in his personal administration that components in unrealized capital good points which might be not treated as taxable earnings underneath federal legislation. In different phrases, whereas Biden made it sound like he was speaking a couple of federal tax price, he was truly citing a determine that isn’t primarily based on the way in which the US tax system truly works at current.
There’s nothing inherently flawed with the choice calculation itself; the administration economists who got here up with it explained it in detail on the White House website in 2021. Biden, nonetheless, has tended to cite it with none context about what it’s and isn’t, leaving open the impression that he was speaking about what these billionaire households pay underneath present legislation.
So what do the wealthiest billionaire households pay underneath present legislation? It’s not publicly identified, however specialists say it’s clearly greater than 8%.
“Biden’s numbers are method too low,” Howard Gleckman, senior fellow on the City-Brookings Tax Coverage Middle on the City Institute assume tank, instructed CNN in 2023. Gleckman stated that in 2019, College of California, Berkeley economists Emmanuel Saez and Gabriel Zucman “estimated the highest 400 households paid a mean efficient tax price of about 23 p.c in 2018. They received numerous consideration on the time as a result of that price was decrease than the common price of 24 p.c for the underside half of the earnings distribution. Nevertheless it nonetheless was far more than 2 or 3,” numbers Biden has utilized in some earlier speeches, “and even 8 p.c.”
In February 2024, Gleckman supplied further calculations from the Tax Coverage Middle. The middle found that the highest 0.1% of households paid a mean efficient federal tax price of about 30.3% in 2020, together with a mean earnings tax price of 24.3%.
From CNN’s Daniel Dale
Delivering the official Republican response to Biden’s State of the Union tackle, Britt stated, “We’ve got the worst inflation in 40 years.”
Info First: This declare is fake. Britt might have precisely stated, in previous tense, that inflation was at a 40-year excessive when it hit its Biden-era peak of 9.1% in June 2022. However inflation has declined sharply since that June 2022 peak, and the newest obtainable price, for January 2024, was 3.1%. The Biden presidency apart, that price was exceeded as recently as 2011 – far lower than 40 years in the past.
Like Britt, former President Donald Trump and different Republicans have repeatedly ignored the decline in inflation since June 2022 to criticize Biden within the current tense.
From CNN’s Daniel Dale
Britt stated that simply after taking workplace in 2021, Biden “suspended all deportations.”
“President Biden inherited essentially the most safe border of all time. However minutes after taking workplace, he suspended all deportations.”
Info First: This wants context. Hours after taking workplace, Biden did name for a 100-day pause on deportations, however not “all deportations.”
The moratorium excluded people suspected of terrorism or espionage, among other teams. However, extra importantly, the suspension by no means truly took impact. A federal choose in Texas immediately blocked the motion and it was by no means revived.
From CNN’s Danya Gainor