CNN
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President Joe Biden has made one other collection of inaccurate claims in an financial speech.
In late January, CNN fact-checked Biden’s false and deceptive claims in an financial speech to union employees in Virginia. In a speech this Wednesday to union employees in Maryland, Biden repeated a kind of claims and made three different incorrect statements – all of them about statistics.
Within the Wednesday speech, Biden criticized the fiscal administration of former President Donald Trump. After accurately noting that the federal funds deficit increased yearly of Trump’s time period, Biden mentioned, “And due to these file deficits, no president added extra to the nationwide debt – that’s a 200-year debt – by no means added extra to the nationwide debt than my predecessor.”
Information First: This declare is fake. Extra debt was added within the eight years underneath President Barack Obama, with Biden as vice chairman, than within the 4 years underneath Trump. The Trump period set the file for many debt added in a single four-year presidential time period, however Biden made it sound right here just like the Trump period set the file even while you embrace two-term presidents like Obama. (Biden correctly said in his State of the Union tackle final week that he was referring to a file for debt added in a four-year interval.) Additionally, whereas Biden talked about “file deficits,” plural, underneath Trump, just one Trump-era deficit, in pandemic-era fiscal 2020, was really a file; the deficits in fiscal 2017, 2018 and 2019 have been all lower than each deficit in Obama’s first time period, when the nation was rising from a major recession and Obama authorised some insurance policies that increased deficits.
There are various ways to measure the debt. Utilizing the fundamental headline measure, total public debt, the debt elevated about $9.3 trillion over Obama’s eight years, from about $10.6 trillion on the day he was inaugurated in 2009 to about $19.9 trillion on the day Trump took workplace in 2017. The debt elevated by about $7.8 trillion over Trump’s 4 years, to about $27.8 trillion when Biden changed him in 2021.
It’s additionally vital to notice that it’s an oversimplification accountable presidents alone for debt incurred throughout their tenures.
A big quantity of spending underneath any president is the results of choices made by their predecessors – such because the creation of Social Safety, Medicare and Medicaid a long time in the past – and by circumstances out of a president’s management, corresponding to an inherited recession for Obama and the worldwide Covid-19 pandemic for Trump.
And whereas some debt can pretty be attributed to a single occasion – Trump’s 2017 tax cuts, unanimously opposed by congressional Democrats, have been a major contributor – different debt is bipartisan. Notably, the debt spiked in 2020 after Trump authorised trillions in emergency pandemic relief spending that Congress had handed with overwhelming Democratic and Republican assist.
Biden was proper when he mentioned that the deficit elevated yearly underneath Trump. However the deficits in fiscal 2017, 2018 and 2019 underneath Trump have been all beneath $1 trillion – decrease than the deficits in fiscal 2009, 2010, 2011 and 2012 underneath the Obama-Biden administration. The deficit then roughly tripled, to a file degree of about $3.1 trillion, in pandemic-era fiscal 2020.
In one other a part of the speech, Biden mentioned, “We lower the debt by $1.7 billion the final two years.” The White Home made a correction to the official transcript to make it “$1.7 trillion” as a substitute of “$1.7 billion.”
Information First: This declare is inaccurate even if you happen to ignore Biden’s billion-versus-trillion mixup. The nationwide debt has continued to extend underneath Biden. It’s the deficit that has declined by about $1.7 trillion – and consultants say it’s deceptive for Biden to take credit score for that discount.
The debt has increased about $3.7 trillion throughout Biden’s time as president, rising to about $31.5 trillion. As Biden additionally did in speeches during the 2022 midterms, his declare on this speech conflated the debt (the buildup of federal borrowing plus curiosity owed) with the deficit (the one-year distinction between spending and revenues).
The deficit did fall by roughly $1.7 trillion between fiscal 2020 and monetary 2022, from about $3.1 trillion to about $1.4 trillion. However as CNN has repeatedly noted, it’s extremely questionable how a lot credit score Biden deserves for the decline – which overwhelmingly occurred as a result of the emergency pandemic spending from the tip of the Trump period expired as deliberate. In actual fact, impartial analysts say Biden’s personal new legal guidelines and govt actions have considerably added to present and projected future deficits, not diminished these deficits. You’ll be able to learn extra here and here.
Biden made a complicated comment about prescription drug prices and the Inflation Discount Act he signed into regulation final 12 months.
He mentioned the regulation “saves seniors some huge cash” on prescribed drugs, then added that, by bringing down the price of these medication, the regulation “will lower the federal deficit, saving taxpayers tons of of billions of {dollars} over time.”
Each of those assertions are fair. However then Biden added that if Republicans repealed this regulation, they’d be eliminating “$159,000 a 12 months in financial savings on decrease drug prices.”
Right here’s a fuller quote: “Now, our Republican associates need to repeal the Inflation Discount Act. They’d eliminate the financial savings on prescribed drugs that we purchase, like Medicare – I imply, we purchase from – via – via Medicare. And it could get rid of, at this time, proper now, $159,000 a 12 months in financial savings on lowered drug prices. Now, that simply means your tax {dollars} are going to avoid wasting – be saved $159,000 to do what we’re doing proper now.”
Information First: The Inflation Discount Act doesn’t present “$159,000 a 12 months in financial savings on lowered drug prices.” A White Home official made clear to CNN on Thursday that Biden was trying to say that authorities financial savings of $159 billion over 10 years can be misplaced with a Republican repeal of two key Inflation Discount Act provisions on prescribed drugs.
Seen a method, Biden’s “$159,000 a 12 months” determine considerably understated the entire financial savings from these two provisions. (One permits Medicare to barter the worth of sure prescribed drugs. The opposite requires pharmaceutical firms to pay rebates to Medicare for worth will increase over the speed of inflation.) However his use of such a modest quantity could have led some listeners to imagine that he was speaking about big financial savings to explicit seniors or households moderately than modest financial savings to the federal government. And his determine was incorrect no matter the way it was perceived.
The White Home corrected this part of the official transcript of the speech after CNN inquired concerning the “$159,000” determine.
Biden reprised an inaccurate determine he used within the Virginia speech in late January. He mentioned of billionaires in the USA: “You already know what their common tax they pay is? About 3%.”
Information First: As soon as extra, Biden’s “3%” declare is wrong. For the third time in lower than a month, Biden inaccurately described a 2021 finding from economists in his administration that the wealthiest 400 billionaire households paid a median of 8.2% of their earnings in federal particular person earnings taxes between 2010 and 2018; after CNN inquired about Biden’s “3%” declare within the late-January speech, the White Home published a corrected transcript of that speech to make it “8%” as a substitute. Additionally, it’s vital to notice that even the 8% quantity is contested, since it’s an alternate calculation that features unrealized capital positive aspects which can be not treated as taxable earnings underneath federal regulation.
“Biden’s numbers are means too low,” Howard Gleckman, senior fellow on the City-Brookings Tax Coverage Heart on the City Institute suppose tank, instructed CNN in late January – although Gleckman additionally mentioned we don’t know exactly what tax charges billionaires do pay. Gleckman wrote in an electronic mail: “In 2019, Berkeley economists Emmanuel Saez and Gabe Zucman estimated the highest 400 households paid a median efficient tax price of about 23 % in 2018. They received numerous consideration on the time as a result of that price was decrease than the typical price of 24 % for the underside half of the earnings distribution. However it nonetheless was far more than 2 or 3, and even 8 %.”
Biden has cited the 8% statistic in numerous other speeches, however unlike the administration economists who got here up with it, he tends to not clarify that it doesn’t describe tax charges in a standard means. And regardless, he mentioned “3%” on this speech and the Virginia speech – and “2%” in another January speech.
