By Robert Farley, D’Angelo Gore, Saranac Hale Spencer, Catalina Jaramillo, Kate Yandell, Jessica McDonald, Alan Jaffe, Eugene Kiely and Lori Robertson
Summary
In his final State of the Union address prior to the November general election, President Joe Biden focused on Ukraine, the Israel-Hamas war, the economy, reproductive rights, prescription drug costs and border security. Biden also criticized many of the policies of “my predecessor” — without naming former President Donald Trump. But he sometimes stretched the facts or left out important context.
- Biden boasted that under his leadership “wages keep going up.” But over the entirety of Biden’s presidency, wages are down when adjusted for inflation.
- Biden claimed that the more recent U.S. inflation rate of about 3% is the “lowest in the world!” But several nations reported lower rates than the U.S. in December.
- He again claimed to have “cut the federal deficit by over one trillion dollars” — although declining deficits have mostly been the result of expiring emergency pandemic spending.
- Biden said he had created a “record” 15 million new jobs. His 14.8 million new jobs is a record for any president in the first three years, but it’s not the highest job growth rate that any president has achieved in that period of time.
- He suggested that “many” of the new jobs in U.S. semiconductor factories will be “paying $100,000 a year and don’t require a college degree.” But an industry trade group previously reported that only workers with bachelor’s or graduate degrees make that much.
- Biden said that, “My policies have attracted $650 billion in private sector investment in clean energy [and] advanced manufacturing.” Those are announcements about intentions to invest, not actual investments.
- Biden highlighted recent decreases in murder and violent crime rates, but neglected to mention that they are still coming down from their pandemic peak.
- Biden omitted context of a Trump comment following an Iowa school shooting.
- The president said billionaires pay an average federal tax rate of only 8.2%, but that’s a White House calculation that includes earnings on unsold stock as income.
- Biden said that because of the Affordable Care Act, over 100 million people can no longer be denied health insurance due to preexisting conditions. But pre-ACA, employer plans covered many of those people and couldn’t deny policies.
- Biden said he was “cutting our carbon emissions in half by 2030.” That’s the U.S. goal, relative to 2005 emissions, but studies suggest current policies will not reduce emissions by that much.
Biden spoke to Congress on March 7.
Analysis
Wages
Biden boasted that “wages keep going up, inflation keeps coming down.” But over the entirety of Biden’s presidency, wages are down when adjusted for inflation.
Average weekly earnings for rank-and-file workers went up 14.8% during Biden’s first three years in office, according to monthly figures compiled by the Bureau of Labor Statistics. But inflation ate up all that gain and more. “Real” weekly earnings, which are adjusted for inflation and measured in dollars valued at their average level in 1982-84, actually declined 3.1% since Biden took office.
The inflation-adjusted average weekly earnings of production and nonsupervisory workers — who make up 81% of all employees in the private sector — and the inflation-adjusted average hourly earnings of all employees have both been on the rise for the last year and a half, with real weekly earnings rising 1.5% since hitting the low point under Biden in June 2022.
Inflation has also moderated greatly since hitting a peak increase of 9% for the 12 months ending in June 2022, the biggest such increase in over 40 years. The unadjusted Consumer Price Index rose 3.1% in the 12 months ending in January, the most recent figure available, and as Biden said, it has been trending down.
But looking at the entire three years of Biden’s presidency so far, the Consumer Price Index has risen a total of 18%.
Inflation
Biden claimed that inflation in the U.S. “has dropped from 9% to 3% – the lowest in the world!”
The year-over-year inflation rate was 3.1% in January, down from 9% in June 2022, according to the Bureau of Labor Statistics. But that’s still higher than the 1.4% rate when Biden took office.
Furthermore, the current U.S. inflation rate is not the lowest of any country.
December data from the Organization for Economic Cooperation and Development show that Italy — a member of the G7, a group of seven of the world’s most advanced economies — had a lower year-over-year inflation rate than the U.S. While the U.S. inflation rate was 3.3% for the 12 months ending that month, Italy’s was 0.6%.
Other countries with “advanced economies,” as defined by the International Monetary Fund, and millions of residents, including Denmark (0.7%), Lithuania (1.2%), Belgium (1.4%) and South Korea (3.2%), also had lower inflation rates than the U.S., as of December.
Even by the White House’s own calculations, which adjust for differences in how countries calculate inflation, Biden’s claim was inexact.
In a Jan. 11 post on the social media platform called X, the White House Council of Economic Advisers wrote that, as of November, the latest month with complete G7 data, “both core & headline U.S. inflation were among the lowest in the G7” — not the lowest.
That’s because Italy had a lower headline inflation rate than the U.S., according to the CEA’s post. Supporting documentation provided by the White House shows that Italy’s rate was 0.5% and the U.S. rate was almost 2.5%.
Headline inflation – unlike core inflation – factors in food and energy prices.
Deficits
Biden continues to misleadingly claim, as he did during his address, that’s he’s “already cut the federal deficit by over $1 trillion dollars.”
Budget deficits have declined from the record spending gap of $3.1 trillion in fiscal year 2020, the last full fiscal cycle before Biden took office. In FY 2021, the deficit was about $2.8 trillion; in FY 2022, it was almost $1.4 trillion; and in FY 2023, which ended Sept. 30, it was roughly $1.7 trillion.
But as we’ve explained several times, the primary reason that deficits went down by about $350 billion in Biden’s first year, and by another $1.3 trillion in his second, is because of emergency COVID-19 funding that expired in those years.
Budget experts said that if not for more pandemic and infrastructure spending championed by Biden, deficits would have been even lower than they were in fiscal 2021 and 2022.
As of February, the nonpartisan Congressional Budget Office projected that under current law, the deficit would fall to $1.6 trillion in fiscal 2024, rise to $1.8 trillion in fiscal 2025, then return to $1.6 trillion in fiscal 2027. “Thereafter, deficits steadily mount, reaching $2.6 trillion in 2034,” the CBO said.
‘Record’ Jobs
As he has done in recent speeches, Biden boasted that he has created a “record” 15 million new jobs in his first three years in office. He frequently adds on the campaign trail that that’s more than any president had created in three years or in the first four-year term.
“Fifteen million new jobs in just three years – a record, a record!” he said on Thursday night, right after saying “our economy is literally the envy of the world.”
He’s right on the new jobs — to a point.
Since Biden took office, the U.S. economy added 14.8 million jobs (not quite 15 million) — which is a record number of jobs, at least since 1939, for any president in his first three or four years in office, according to Bureau of Labor Statistics data that go back to January 1939.
But Biden isn’t accounting for population and job growth. Other presidents have seen a greater percentage increase.
The 14.8 million additional jobs under Biden represent a growth rate of 10.3%, as measured from January 2021, when Biden took office, through January 2024, the latest month for which data are available from the BLS. While impressive, the 10.3% growth rate isn’t as high as under some past presidents when there were fewer jobs.
In President Jimmy Carter’s only four years in office, from January 1977 to January 1981, the U.S. added 10.3 million jobs. That’s an increase of 12.8%. In Carter’s first three years, the U.S. added 10.1 million jobs, or 12.5%.
In President Lyndon Johnson’s only full term in office, from January 1965 to January 1969, the U.S. economy added 9.9 million jobs — a 16.5% job growth. In the first three years of that term, from January 1965 to January 1968, the U.S. added 7.2 million jobs, which was an increase of 12.1%.
In President Bill Clinton’s first term, from January 1993 through January 1997, the U.S. added 11.6 million jobs, an increase of 10.5%. That’s a slightly higher rate of job growth than in Biden’s first three years. But in Clinton’s first three years, the number of jobs increased by 7.8%, which is smaller.
However, the U.S. added a total of 22.9 million jobs in Clinton’s two terms, an increase of 20.9%, from 109.8 million jobs in January 1993 to 132.7 million in January 2001. It remains to be seen if job growth continues at such a pace under Biden in a second term, if he wins reelection.
Semiconductor Jobs
On multiple occasions, Biden has left the misleading impression that new jobs in U.S. semiconductor factories would pay above $100,000 annually for those without a college degree.
During his speech, he said: “Private companies are now investing billions of dollars to build new chip factories here in America, creating tens of thousands of jobs. Many of those jobs paying $100,000 a year and don’t require a college degree.”
In a 2021 report, the Semiconductor Industry Association, a trade group, and Oxford Economics found that 277,000 people worked in the industry with an average salary of $170,000 in 2020. While the report said industry workers “consistently earn more than the U.S. average at all education attainment levels,” it noted that “average wages vary based on educational attainment.”
But only those with a bachelor’s degree ($120,000) or a graduate degree (over $160,000) had wages that topped six figures. Workers with a high school education or less could expect to earn a little more than $40,000. Those with at least some college experience could make $60,000, while earning an associate’s degree could increase that to $70,000.
According to the report, only 20% of semiconductor workers at the time had not attended college. Conversely, 56% of workers had a bachelor’s or graduate degree.
Clean Energy/Advanced Manufacturing Jobs
Biden boasted that, “My policies have attracted $650 billion in private sector investment in clean energy, advanced manufacturing, creating tens of thousands of jobs here in America.” But those are announcements about intentions to invest, not actual investments.
The policies Biden is referring to are mainly the CHIPS Act, which includes $39 billion to fund manufacturing facilities in the U.S. and $11 billion for semiconductor research and development, the Inflation Reduction Act, which includes an estimated $369 billion to combat climate change while also investing in “energy security,” the $1.9 trillion American Rescue Plan, and the bipartisan infrastructure law, which included $550 billion in new infrastructure spending.
The claim about the amount of private sector investment in clean energy and manufacturing that those policies have created is based on a White House tabulation of public announcements about investments, or as a White House press release puts it, “commitments to invest.”
“These are announced plans for investments,” Douglas Holtz-Eakin, president of the center-right American Action Forum, told us in a phone interview. “They may take years to happen, or they may not happen at all.”
“He makes it seem like the investments have happened already or that they are happening this year, and they are not,” Holtz-Eakin said. “They may not come to fruition. Market conditions change.”
And, he said, while $650 billion sounds like a lot of investment, with gross capital stock in the U.S. over $69 trillion, even if that amount were invested this year, “it wouldn’t exactly transform the economy.”
Crime
Biden highlighted the continued drop in murder and violent crime rates since he took office, but he left out some important context.
“Last year the murder rate showed the sharpest decrease in history,” Biden said. “Violent crime fell to one of its the lowest levels in more than 50 years.”
It’s true that there has been a sharp decline in murder and homicide rates recently.
The number of homicides was 10% lower in 2023 than in 2022, according to a January report from the Council on Criminal Justice, which gathered data from 32 participating cities.
And, as we’ve written before, a November report from the Major Cities Chiefs Association showed a 10.7% decline in the number of murders from Jan. 1 to Sept. 30, 2023, compared with the same time period in 2022, in 69 large U.S. cities.
Similarly, violent crime has also gone down, according to the most recent data released by the FBI, and the Council on Criminal Justice report found that there were “3% fewer reported aggravated assaults in 2023 than in 2022 and 7% fewer gun assaults in 11 reporting cities. Reported carjacking incidents fell by 5% in 10 reporting cities but robberies and domestic violence incidents each rose 2%.”
But in both cases, the homicide and violent crime rates are higher than they were in 2019 — the year before the COVID-19 pandemic broke out.
While it’s unclear exactly why, there was a sharp increase in homicide and violent crime during the pandemic that may have been broadly due to the wide availability of guns and the insecurity brought on by the pandemic, according to an analysis from the Brennan Center for Justice.
While Biden was correct in pointing out a recent decrease in murder and violent crime, he didn’t account for the preceding increase during the pandemic.
Trump’s ‘Get Over It’ Comment
While speaking about the mass shooting in Uvalde, Texas, and other gun violence, Biden said, “Meanwhile, my predecessor told the NRA he’s proud he did nothing on guns when he was president. After another school shooting in Iowa recently, he said — when asked what to do about it — he said, ‘Just get over it.’”
But Biden omitted much of what Trump said after the Jan. 4 shooting at Perry High School in Iowa, where a 17-year-old student killed a sixth-grader and injured four other students and the principal.
The following day, at a campaign rally in Sioux Center, Iowa, Trump offered his “support and deepest sympathies” to the victims of the school shooting. “We’re really with you as much as anybody can be. It’s a very terrible thing that happened. It’s just terrible to see that happening,” Trump said. “That’s just horrible. It’s so surprising to see it here.”
He added, “But we have to get over it. We have to move forward. But to the relatives, and to all of the people who are devastated right now, to the point they can’t breathe, they can’t live, we are with you all the way.”
Taxes Paid by Billionaires
As he has said many times before, Biden claimed that billionaires pay an average federal tax rate of 8.2%, less than the rate paid by “a teacher, a sanitation worker, or a nurse.” But that’s not the average rate in the current tax system; it’s a White House calculation that factors in earnings on unsold stock as income.
When looking only at income, the top-earning taxpayers, on average, pay higher tax rates than those in the income groups below them, as we’ve explained. Biden’s point — which he doesn’t make clear — is that the current tax system does not tax earnings on assets, such as stock, until that asset is sold, at which point they are subject to capital gains taxes. Until stocks and assets are sold, any earnings are referred to as “unrealized” gains.
The president has used the 8% figure to argue that wealthy households, those worth over $100 million, should pay a 25% minimum tax, as calculated on both standard income and unrealized investment income combined.
The problem with the current system, the White House has said, is that unrealized gains could go untaxed forever if wealthy people hold on to them and pass them on to heirs when they die.
Under what’s called stepped-up basis, the value of an asset is adjusted to the fair market value at the time of the inheritance. This wipes out any taxes on the unrealized gains that accumulated from the time the investor bought the asset and the time it was inherited.
When we wrote about this last year, Erica York, a senior economist and research manager at the Tax Foundation, explained that wealthy households can also borrow money against the assets they own “to consume their wealth without paying tax.” After the family member passes away, the assets can go to heirs, who won’t have to pay taxes on the unrealized gains. York referred to the strategy as “buy, borrow, die.”
Biden’s brief talking point leaves the misleading impression that billionaires are only paying 8% on average in federal taxes under the current tax system.
Preexisting Conditions
Biden said that because of the Affordable Care Act, “over 100 million of you can no longer be denied health insurance because of preexisting conditions,” claiming that Trump wants to repeal the ACA and take away this protection.
The 100 million figure is an estimate of how many Americans not on Medicare or Medicaid have preexisting conditions. But if the ACA were eliminated, only those buying their own plans on the individual, or nongroup, market would immediately be at risk of being denied insurance.
The ACA instituted sweeping protections for those with preexisting conditions, prohibiting insurers in all markets from denying coverage or charging more based on health status. Those protections were most important for the individual market. Even before the ACA, employer plans couldn’t deny issuing a policy — and could only decline coverage for some preexisting conditions for a limited period if a new employee had a lapse in coverage.
We last wrote about this issue in December, when Biden said “over 100 million people” had protections for their preexisting conditions “only” because of the ACA, a figure he also used during the 2020 campaign.
Again, those with employer plans did have protections before the ACA. The law’s broad protections would benefit people who lost their jobs or retired early and found themselves seeking insurance on the individual market. As of 2022, 20 million people, or about 6.3% of the U.S. population, got coverage on the individual market.
As for Trump, he has said he wants to get rid of the law, posting on social media in November that Republicans “should never give up” on terminating the ACA. Trump said he was “seriously looking at alternatives,” but he hasn’t provided a plan. And he never released one while he was president, either.
Given what Trump has backed in the past, he may well support a plan that wouldn’t be as comprehensive as the ACA and would lead to an increase in the uninsured and fewer protections for those with health conditions. But Biden makes the assumption Trump wouldn’t replace the ACA with anything at all.
Carbon Emissions
In one of his few, short references to climate change in the speech, Biden said, “I’m cutting our carbon emissions in half by 2030.”
Biden is likely referring to the emissions target for heat-trapping greenhouse gases his administration set for the U.S. in April 2021 as part of rejoining the Paris Agreement, the international accord that ideally aims to limit global warming to 1.5 degrees Celsius above pre-industrial levels — and from which Trump had officially withdrawn the country in 2019. The goal under Biden is to reduce American emissions by 50% to 52% from 2005 levels by 2030.
The Biden administration has made substantial progress in meeting the goal, most notably with the passage of the Inflation Reduction Act, Biden’s signature climate legislation that includes investments in clean energy. But as we’ve written, when the president has previously claimed the U.S. is “on track” to achieve its Paris goal, estimates suggest existing policies will not quite get the country all the way there.
“Based on Congressional action and currently finalized regulations, we are not on track to meet 50-52% below 2005 by 2030,” Jesse Jenkins, who leads the Princeton Zero carbon Energy systems Research and Optimization Laboratory, told us in an email last April. Jenkins said then it was possible “the gap could be closed” once certain rules are finalized and others are proposed. The Biden administration, however, has recently announced or is reportedly planning changes that some say would weaken rules related to vehicle and gas power plant emissions.
In a January update, the research firm Rhodium Group estimated that under current policy, the U.S. will cut emissions 29% to 42% below 2005 levels in 2030.
A recent analysis by Carbon Brief, a U.K.-based climate-focused website, similarly projected that if Biden were reelected, the U.S. would get to a 43% reduction. That’s much higher than a second term for Trump — who, assuming he would undo Biden’s policies, would cut emissions by just 28% — but also still not to the full halfway mark.
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