Fact checking President Joe Biden’s State of the Union
By CNN Staff
(CNN) — President Joe Biden delivered his annual State of the Union address on Thursday. His statements were mostly accurate, a CNN fact check found, but he also made a smattering of claims that were false, misleading or lacking key context.
Biden repeated his familiar misleading boast about how he had supposedly reduced the federal budget deficit, failing to explain that the decline overwhelmingly occurred because emergency pandemic spending from President Donald Trump’s tenure expired as schedule. He falsely claimed that “not anymore” would big companies be able to pay no federal income tax, overstating the impact of the 15% corporate minimum tax he signed into law.
He misleadingly cited an alternative calculation from economists in his administration as if it was an actual federal tax rate paid by billionaires. And he left out context in discussing Covid-19 deaths, suggesting that far more deaths occurred during the Trump era than actually did.
Sen. Katie Britt of Alabama made few specific assertions of fact during her official Republican response to Biden’s address. But Britt did falsely say, in present tense, that inflation is at a 40-year low; it no longer is.
Here is a fact check of these claims and others.
Biden on Trump and the national debt
Biden criticized the fiscal management of former President Donald Trump during his State of the Union address, claiming, “They added more to the national debt than any presidential term in American history. Check the numbers.”
Facts First: Biden’s numbers are correct; the national debt rose from about $19.9 trillion to about $27.8 trillion during Trump’s tenure, an increase of about 39% and more than in any other four-year presidential term, in part because of Trump’s major tax cuts. But it is an oversimplification to blame presidents alone for debt incurred during their tenures. Some of the Trump-era increase in the debt was due to the trillions of dollars in emergency Covid-19 pandemic relief spending that passed with bipartisan support and because of spending required by safety-net programs, such as Medicare, Medicaid and Social Security, that were created by previous presidents.
The national debt has continued to increase under Biden. As of the day before Biden’s address, it was about $34.4 trillion, federal figures show – an increase of about 24% during his tenure.
From CNN’s Katie Lobosco and Daniel Dale
Biden says the economy has added ‘800,000 new manufacturing jobs’ during his administration
Biden claimed that the economy has added “800,000 new manufacturing jobs” during his administration.
Facts first: Biden’s figure is correct. The US economy added 791,000 manufacturing jobs from Biden’s first full month in office, February 2021, through January 2024, the last month for which Bureau of Labor Statistics data is available – though it’s worth noting that the growth largely occurred in 2021 and 2022 (with 746,000 manufacturing jobs added starting in February 2021) before a relatively flat 2023.
From CNN’s Daniel Dale and Alicia Wallace
Biden on the deficit impact of IRA Medicare provisions
Just as he’s done on the campaign trail, Biden touted his administration’s efforts to reduce the burden of prescription drug costs. In his address, he also pointed out the savings for taxpayers.
“That’s not just saving seniors money, it’s saving taxpayers money,” Biden said, referring to the Inflation Reduction Act, which contained several measures to reduce drug prices. “We cut the federal deficit by $160 billion.”
Facts First: It’s true that two of the main drug price provisions in the Inflation Reduction Act, which Democrats pushed through Congress in 2022, are expected to reduce the deficit by $160 billion, according to the nonpartisan Congressional Budget Office. In total, the law’s drug measures are expected to reduce the deficit by $237 billion, though delaying the implementation of a Trump administration drug rebate rule accounts for the difference.
The Inflation Reduction Act authorized Medicare to negotiate the prices of certain costly prescription drugs for the first time. This measure is expected to save $98.5 billion over a decade, according to the CBO. Negotiations for the initial 10 drugs are underway. The final prices will be made public by September and take effect in 2026.
The law also requires drugmakers to pay a rebate to the federal government if they raise the prices of certain medications faster than the rate of inflation. This is expected to save $63.2 billion over a decade, according to the CBO.
From CNN’s Tami Luhby
Biden and the deficit
Biden said: “I have been delivering real results in fiscally responsible ways.”
“We’ve already cut the federal deficit – we’ve already cut the federal deficit of over $1 trillion,” he said.
Facts First: Biden’s claim leaves out such critical context that it is misleading. While the annual federal budget deficit was more than $1 trillion lower in the 2023 fiscal year than it was in both the 2020 fiscal year (under President Donald Trump) and the 2021 fiscal year (partially under Trump and partially under Biden), analysts have repeatedly noted that Biden’s own actions, including laws he has signed and executive orders he has issued, have had the overall effect of worsening annual deficits, not reducing them. As in past remarks, Biden didn’t explain that the primary reason the deficit fell by a record amount during his tenure was that it had skyrocketed to a record high at the end of Trump’s term because of bipartisan emergency pandemic relief spending, then fell as expected when that spending expired as planned.
“The deficit is a trillion dollars lower, roughly, than when President Biden took office. That’s true. But that’s driven not because he ‘reduced’ the deficit by a trillion dollars, but because when he took office it was the middle of Covid and we had been temporarily injecting huge sums of money into the economy,” Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, an advocacy group that promotes deficit reduction and tracks the issue, said in a February interview.
The deficit hit a record of about $3.1 trillion under Trump amid the hefty pandemic-related spending in fiscal 2020. The deficit then fell under Trump and Biden in fiscal 2021 (to about $2.8 trillion) and again under Biden in fiscal 2022 (to about $1.4 trillion). But it then rose in fiscal 2023 (to about $1.7 trillion). And the jump 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 related to the Biden student debt cancellation program the Supreme Court blocked before it came into effect.
The nonpartisan Congressional Budget Office projects that the deficit will decline slightly in fiscal 2024, to about $1.5 trillion. Regardless, all of the Biden-era deficits are among the biggest in US history.
Factors out of a president’s control, like interest rates hikes, have played a role in keeping deficits high under Biden. And Biden has signed some deficit-fighting bills; his signature Inflation Reduction Act of 2022 is expected to bring down deficits by a total of more than $230 billion over a decade, while the Fiscal Responsibility Act of 2023 is expected to cut a cumulative $1.5 trillion from federal deficits over a decade.
Still, Biden’s actions have clearly added to deficits. These actions include a pandemic relief law, a bipartisan infrastructure law, a bipartisan law to spur semiconductor manufacturing, a boost to food stamp benefits and an extension of the Trump-era pandemic pause on federal student loan repayments.
Biden can fairly say that his policies have contributed to a strong economic recovery that has boosted tax revenues and thus eaten into deficits. On the whole, though, Goldwein said deficits under Biden have been “higher than they otherwise would have been because of legislation President Biden has signed into law and executive actions he’s taken.”
From CNN’s Daniel Dale
Biden claims record ‘15 million new jobs’ in three years
Biden claimed the economy created a record 15 million jobs in the first three years of his term.
Facts First: Biden’s claim is correct: the US economy added about 14.8 million jobs between Biden’s first full month in office, February 2021, and January 2024, more jobs than were added in any previous four-year presidential term. However, it’s important to note that Biden took office in an unusual pandemic context that makes meaningful comparison to other periods very difficult.
Biden became president less than a year after the US economy had shed nearly 22 million jobs over two months, March 2020 and April 2020, because of the Covid-19 pandemic. The jobs recovery then began immediately after that, under then-President Donald Trump, but there was still an unprecedented hole to fill when Biden took office.
Nonetheless, Biden is free to argue that his stimulus legislation and other policies have helped the country gain jobs faster than it otherwise would have. The US has had an extraordinarily strong labor market under Biden, and its overall economic recovery from the pandemic has outpaced those of many other major countries.
From CNN’s Daniel Dale
Biden on the corporate minimum tax
Biden cited a 2021 report from the Institute on Taxation and Economic Policy think tank that found that 55 of the country’s largest corporations had made $40 billion in profit in their previous fiscal year but not paid any federal corporate income taxes. He said, “Remember in 2020, 55 of the biggest companies in America made $40 billion and paid zero in federal income taxes. Zero. Not anymore. Thanks to the law I wrote and we signed, big companies have to pay a minimum of 15%.”
Facts First: Biden’s “not anymore” claim is false, an exaggeration. While his 15% corporate minimum tax will reduce the number of big companies that don’t pay any federal taxes, it’s not true that “not anymore” will any big company – such as the ones on the list of 55 companies Biden mentioned – ever do so. That’s because the minimum tax, on the “book income” companies report to investors, only applies to companies with at least $1 billion in average annual income. According to the Institute on Taxation and Economic Policy, only 14 of the companies on its list of 55 non-payers reported having US pre-tax income of at least $1 billion.
In other words, there will clearly still be some large and profitable corporations paying no federal income tax despite the existence of the tax. The exact number is not known.
Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, told CNN in 2022 that the new tax is “an important step forward from the status quo” and that it would raise substantial revenue, but he also said: “I wouldn’t want to assert that the minimum tax will end the phenomenon of zero-tax profitable corporations. A more accurate phrasing would be to say that the minimum tax will *help* ensure that *the most profitable* corporations pay at least some federal income tax.”
There are lots of nuances to the tax; you can read more specifics here. Asked for comment in early 2023, when Biden made a similar claim, a White House official told CNN: “The Inflation Reduction Act ensures the wealthiest corporations pay a 15% minimum tax, precisely the corporations the President focused on during the campaign and in office.”
From CNN’s Daniel Dale
Biden claims that violent crime has fallen to lowest levels in ‘more than 50 years’
Biden claimed during his State of the Union address Thursday night that violent crime has fallen to one of its lowest levels in “more than 50 years.”
Facts First: This is true, at least based on preliminary 2023 data that should be treated with caution. The preliminary 2023 data published by the FBI, running through the third quarter of the year, showed that violent crime was down 8.2% compared to the same period in 2022 – a decline that would be “historically large” for a year, crime data expert Jeff Asher wrote in a December article. Asher wrote: “The quarterly data shows violent crime down in big cities, small cities, suburban counties, and rural counties, pretty much across the board.”
Asher, co-founder of the firm AH Datalytics, told CNN in late February that, if the decline in reported violent crime for the full year of 2023 ended up being greater than 1.6%, 2023 would have the lowest violent crime rate since 1970. The 2022 rate was the second-lowest since 1970, worse than only 2019.
As always, whether crime is rising or falling, it’s important to note that it is notoriously difficult to pinpoint the reasons that crime has increased or decreased at any given time, since there is a long list of economic, social and political factors at play; the impact of the president is unclear.
From CNN’s Daniel Dale and Piper Hudspeth Blackburn
Biden on Covid-19 deaths
Biden, as he was discussing the state of the country four years earlier, said more than 1 million American lives were lost to Covid-19, implying it was under the Trump administration
Facts First: Biden’s figure needs context. Many lives were lost to Covid-19 during the Trump administration, but the US didn’t reach its millionth death until May 2022 when Biden was in office.
While there were a significant number of lives lost to Covid during the Trump administration, on President Donald Trump’s last full day in office the US death count reached at least 400,000, according to Johns Hopkins University. At that point during the pandemic there had been a winter surge in cases and someone was dying from the virus in the US every 26 seconds, according to KFF, a health policy and research organization. The death rate from Covid-19 in the US at the time was lower than in many other countries, but with the country’s large population, the death numbers exceeded all other countries at that time.
Officially the US surpassed a million deaths from Covid in May 2022 during the Biden administration. As of this February, more than 1.18 million people in the US have died from Covid-19 according to the US Centers for Disease Control and Prevention.
From CNN’s Jen Christensen
Biden on the unemployment rate
Touting the economy during his presidency, Biden said, “Unemployment at 50-year lows.”
Facts First: This needs context.
The unemployment rate did hit a five-decade low during two months of early 2023, 3.4%, and it has since remained close to that level – but the latest available unemployment rate, 3.7% for January, is higher than the rate was during nine months under President Donald Trump in 2019 and pre-pandemic 2020. (The rate then skyrocketed on account of the pandemic, and it was 6.4% the month Biden took office in January 2021.)
From CNN’s Daniel Dale
Biden claims that a record 16 million Americans have started small businesses
Biden said, “A record 16 million Americans are starting small businesses, and each one is a little act of hope.”
Facts First: Biden’s claim is accurate based on federal data, though there is an important nuance to note. More than 16.3 million business applications had been filed during the Biden presidency as of February 17, official federal data show, the most over any period of the same length since the data series began in the mid-2000s. It’s worth noting that not all business applications turn into actual businesses. However, so-called “high propensity” business applications, those thought to have a high likelihood of turning into a business with employees, have also set records under Biden.
The spike in overall business applications began in the second half of 2020 under President Donald Trump and accelerated under Biden in 2021; the number of applications then remained high in 2022 and then narrowly set a new record in 2023. There are various reasons for the pandemic-era boom in entrepreneurship, which began after millions of Americans lost their jobs in early 2020. Among them: some newly unemployed workers seized the moment of disruption to start their own enterprises; Americans had extra money from stimulus bills signed by Trump and Biden; interest rates were particularly low until the series of rate hikes that began in the spring of 2022.
From CNN’s Daniel Dale
Biden on child tax credit cutting child poverty in half
Biden once again touted the impact that the temporary enhancement to the child tax credit – a key provision in the 2021 American Rescue Plan Act – had on reducing the poverty rate among children. He called on Congress to bring back the now-expired beefed up credit.
“In fact, the child tax credit I passed during the pandemic cut taxes for millions of working families and cut child poverty in half,” he said.
Facts First: Biden’s assertions are true, though the benefit only lasted for the one year the temporary enhancement was in effect. Child poverty increased in 2022 to a rate higher than in 2020.
The American Rescue Plan Act, which Democrats pushed through Congress in March 2021, increased the size of the credit for certain families, enabled many more parents to claim it and distributed half of it on a monthly basis.
That sent child poverty – as measured by the Supplemental Poverty Measure – to a record low 5.2% in 2021, a drop of 46% from 2020, when the rate was 9.7% according to the US Census Bureau. The Supplemental Poverty Measure, which began in 2009, takes into account certain non-cash government assistance, tax credits and needed expenses.
But in 2022, child poverty soared to 12.4%, roughly comparable to where it was prior to the pandemic in 2019. It was the largest jump in child poverty since the Supplemental Poverty Measure began.
The House recently passed a tax bill that would again expand the child tax credit temporarily, though the boost would not be as generous as it was in 2021. However, the legislation is now stuck in the Senate, and it’s unclear whether it has the votes to pass.
From CNN’s Tami Luhby
Biden on US trade relationship with China
In his State of the Union address, President Joe Biden said that the gap between the amount of goods the US imports from China and the amount it exports to China was the narrowest in more than 10 years.
“Our trade deficit with China is down to the lowest point in over a decade,” Biden said. “We’re standing up against China’s unfair economic practices.”
Facts First: What Biden said is true but needs context. The US trade deficit with China in 2023 was $279 billion, the US Commerce Department reported earlier this year. That was the lowest it has been since 2010.
But the reason for the narrowing trade gap isn’t because of any Biden administration policy. Inflation has driven American consumers away from discretionary purchases, such as electronics – stuff that is primarily made in China. Instead, they’re buying more non-discretionary items, such as groceries.
On top of that, the Trump administration’s tariffs on Chinese goods, which Biden’s administration left in place, have made Chinese goods less popular for Americans, because of the added cost.
That’s why, for the first time in two decades, the US imported more goods from a country other than China: Mexico exported more goods to the US than any other country last year.
The US trade gap didn’t just narrow with China: It shrank dramatically with most countries. The total US trade deficit was $773.4 billion last year, a nearly 19% decline from 2022. That’s the largest annual decline in the trade deficit since 2009. Also contributing to the narrowing trade gap: a weaker dollar that made US goods cost less overseas.
From CNN’s Dave Goldman
Biden’s claims about what billionaires pay in taxes
Presidnet Joe Biden claimed during his State of the Union address that the average federal tax rate for billionaires is 8.2%.
Facts First: Biden used the 8.2% figure in a way that was misleading. As in previous speeches, Biden didn’t explain that the figure is based on an alternative calculation from economists in his own administration that factors in unrealized capital gains that are not treated as taxable income under federal law. In other words, while Biden made it sound like he was talking about a federal tax rate, he was actually citing a figure that is not based on the way the US tax system actually works at present.
There’s nothing inherently wrong with the alternative calculation itself; the administration economists who came up with it explained it in detail on the White House website in 2021. Biden, however, has tended to cite it without any context about what it is and isn’t, leaving open the impression that he was talking about what these billionaire families pay under current law.
So what do the wealthiest billionaire families pay under current law? It’s not publicly known, but experts say it’s clearly more than 8%.
“Biden’s numbers are way too low,” Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute think tank, told CNN in 2023. Gleckman said that in 2019, University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman “estimated the top 400 households paid an average effective tax rate of about 23 percent in 2018. They got a lot of attention at the time because that rate was lower than the average rate of 24 percent for the bottom half of the income distribution. But it still was way more than 2 or 3,” numbers Biden has used in some previous speeches, “or even 8 percent.”
In February 2024, Gleckman provided additional calculations from the Tax Policy Center. The center found that the top 0.1% of households paid an average effective federal tax rate of about 30.3% in 2020, including an average income tax rate of 24.3%.
From CNN’s Daniel Dale
Britt on inflation
Delivering the official Republican response to Biden’s State of the Union address, Britt said, “We have the worst inflation in 40 years.”
Facts First: This claim is false. Britt could have accurately said, in past tense, that inflation was at a 40-year high when it hit its Biden-era peak of 9.1% in June 2022. But inflation has declined sharply since that June 2022 peak, and the most recent available rate, for January 2024, was 3.1%. The Biden presidency aside, that rate was exceeded as recently as 2011 – far less than 40 years ago.
Like Britt, former President Donald Trump and other Republicans have repeatedly ignored the decline in inflation since June 2022 to criticize Biden in the present tense.
From CNN’s Daniel Dale
Britt on Biden suspending deportations
Britt said that just after taking office in 2021, Biden “suspended all deportations.”
“President Biden inherited the most secure border of all time. But minutes after taking office, he suspended all deportations.”
Facts First: This needs context. Hours after taking office, Biden did call for a 100-day pause on deportations, but not “all deportations.”
The moratorium excluded individuals suspected of terrorism or espionage, among other groups. But, more importantly, the suspension never actually took effect. A federal judge in Texas immediately blocked the action and it was never revived.
From CNN’s Danya Gainor
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