President Joe Biden\u00a0delivered a Thursday\u00a0speech\u00a0to hail economic progress during his administration and to attack congressional Republicans for their proposals on the economy and the social safety net.
\nSome of Biden\u2019s claims in the speech were false, misleading or lacking critical context, though others were correct. Here\u2019s a breakdown of the 14 claims CNN fact-checked.
\nInfrastructure projects
\nTouting the bipartisan infrastructure law he\u00a0signed in 2021, Biden said, \u201cLast year, we funded 700,000 major construction projects \u2013 700,000 all across America. From highways to airports to bridges to tunnels to broadband.\u201d
\nFacts First:\u00a0Biden\u2019s \u201c700,000\u201d figure is wildly inaccurate; it adds an extra two zeros to the correct figure Biden\u00a0used\u00a0in a speech last week and the White House has\u00a0also used before: 7,000 projects. The White House acknowledged his misstatement later on Thursday by\u00a0correcting the official transcript\u00a0to say 7,000 rather than 700,000.
\nA cap on seniors\u2019 drug spending
\nBiden said, \u201cWell, here\u2019s the deal: I put a \u2013 we put a cap, and it\u2019s now in effect \u2013 now in effect, as of January 1 \u2013 of $2,000 a year on prescription drug costs for seniors.\u201d
\nFacts First:\u00a0Biden\u2019s claims that this cap is now in effect and that it came into effect on January 1 are false. The $2,000 annual cap contained in the Inflation Reduction Act that Biden signed last year \u2013 on Medicare Part D enrollees\u2019 out-of-pocket spending on covered prescription drugs \u2013\u00a0takes effect in 2025. The maximum may be higher than $2,000 in subsequent years, since it is tied to Medicare Part D\u2019s per capita costs.<\/p>\n
Asked for comment, a White House official noted that other Inflation Reduction Act health care provisions that will save Americans money\u00a0did indeed come into effect on January 1, 2023.
\n– CNN\u2019s Tami Luhby contributed to this item.
\nVaccinations under Trump
\nCriticizing former President Donald Trump over his handling of the Covid-19 pandemic, Biden said, \u201cBack then, only 3.5 million people had been \u2013 even had their first vaccination, because the other guy and the other team didn\u2019t think it mattered a whole lot.\u201d
\nFacts First:\u00a0Biden is free to criticize Trump\u2019s vaccine rollout, but his \u201conly 3.5 million\u201d figure is misleading at best. As of the day Trump left office in January 2021, about 19 million people had received a first shot of a Covid-19 vaccine, according to\u00a0figures published by the Centers for Disease Control and Prevention. The \u201c3.5 million\u201d figure Biden cited is, in reality, the number of people at the time who had received two shots to complete their primary vaccination series.
\nSomeone could perhaps try to argue that completing a primary series is what Biden meant by \u201chad their first vaccination\u201d \u2013 but he used a different term, \u201cfully vaccinated,\u201d to refer to the roughly 230 million people in that very same group today. His contrasting language made it sound like there are 230 million people with at least two shots today versus 3.5 million people with just one shot when he took office. That isn\u2019t true.
\nBillionaires and taxes
\nBiden said Republicans want to cut taxes for billionaires, \u201cwho pay virtually only 3% of their income now \u2013 3%, they pay.\u201d
\nFacts First:\u00a0Biden\u2019s \u201c3%\u201d claim is incorrect. For the second time in less than a week, Biden inaccurately described a\u00a02021 finding from economists in his administration\u00a0that the wealthiest 400 billionaire families paid an average of 8.2% of their income in federal individual income taxes between 2010 and 2018; after CNN inquired about Biden\u2019s \u201c3%\u201d claim on Thursday, the White House\u00a0published a corrected official transcript\u00a0that uses \u201c8%\u201d instead. Also, it\u2019s important to note that even that 8% number is\u00a0contested, since it is an alternative calculation that includes unrealized capital gains that are\u00a0not treated as taxable income under federal law.
\n\u201cBiden\u2019s numbers are way too low,\u201d said\u00a0Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute think tank, though Gleckman also said we don\u2019t know precisely what tax rates billionaires do pay. Gleckman wrote in an email: \u201cIn 2019, Berkeley economists Emmanuel Saez and Gabe Zucman\u00a0estimated 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, or even 8 percent.\u201d
\nBiden has cited the 8% statistic in various\u00a0other speeches, but\u00a0unlike\u00a0the administration economists who came up with it, he tends not to explain that it doesn\u2019t describe tax rates in a conventional way. And regardless, he said \u201c3%\u201d in this speech and \u201c2%\u201d\u00a0in a speech last week.
\nThe impact of a new corporate tax
\nBiden cited a\u00a02021 report\u00a0from the Institute on Taxation and Economic Policy think tank that found that 55 of the country\u2019s largest corporations had made $40 billion in profit in their previous fiscal year but not paid any federal corporate income taxes. Before touting the 15% alternative corporate minimum tax he signed into law in last year\u2019s Inflation Reduction Act, Biden said, \u201cThe days are over when corporations are paying zero in federal taxes.\u201d
\nFacts First:\u00a0Biden exaggerated. The new minimum tax will reduce the number of companies that don\u2019t pay any federal taxes, but it\u2019s not true that the days of companies paying zero are \u201cover.\u201d That\u2019s because the minimum tax, on the \u201cbook income\u201d 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 2021 list of 55 non-payers reported having US pre-tax income of at least $1 billion.
\nIn other words, there will clearly still be some large and profitable corporations paying no federal income tax even after the minimum tax\u00a0takes effect this year. The exact number is not yet known.
\nMatthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, told CNN in the fall that the new tax is \u201can important step forward from the status quo\u201d and that it will raise substantial revenue, but he also said: \u201cI wouldn\u2019t 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.\u201d
\nThere are lots of nuances to the tax; you can read more specifics\u00a0here. Asked for comment on Thursday, a White House official told CNN: \u201cThe 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. The President\u2019s full Made in America tax plan would ensure all corporations pay a 15% minimum tax, and the President has\u00a0called on Congress to pass that plan.\u201d
\nBiden and the federal deficit
\nNoting the\u00a0big increase in the federal debt under Trump, Biden said that his administration has taken a \u201cdifferent path\u201d and boasted: \u201cAs a result, the last two years \u2013 my administration \u2013 we cut the deficit by $1.7 trillion, the largest reduction in debt in American history.\u201d
\nFacts First:\u00a0Biden\u2019s boast leaves out important context. It is true that the federal deficit fell by a total of $1.7 trillion under Biden in the 2021 and 2022 fiscal years, including a\u00a0record $1.4 trillion drop\u00a0in 2022 \u2013 but it is highly questionable how much credit Biden deserves for this reduction. Biden did not mention that the\u00a0primary reason\u00a0the deficit fell so substantially was that it had skyrocketed to a record high under Trump in 2020 because of bipartisan emergency pandemic relief spending, then fell as expected as the spending expired as planned. Independent analysts say Biden\u2019s own actions, including his laws and executive orders, have had the overall effect of adding to current and projected future deficits, not reducing those deficits.
\nDan White, senior director of economic research at Moody\u2019s Analytics \u2013 an economics firm whose assessments Biden has\u00a0repeatedly cited\u00a0during his presidency \u2013\u00a0told CNN\u2019s Matt Egan\u00a0in October: \u201cOn net, the policies of the administration have increased the deficit, not reduced it.\u201d The Committee for a Responsible Federal Budget, an advocacy group,\u00a0wrote\u00a0in September that Biden\u2019s actions will add more than $4.8 trillion to deficits from 2021 through 2031, or $2.5 trillion if you don\u2019t count the American Rescue Plan pandemic relief bill of 2021.
\nNational Economic Council director Brian Deese\u00a0wrote\u00a0on the White House website last week that the American Rescue Plan pandemic relief bill \u201cfacilitated a strong economic recovery and enabled the responsible wind-down of emergency spending programs,\u201d thereby reducing the deficit; David Kelly, chief global strategist at J.P. Morgan Funds, told Egan in October that the Biden administration does deserve credit for the recovery that has pushed the deficit downward. And Deese correctly noted that Biden\u2019s signature legislation, last year\u2019s Inflation Reduction Act, is expected to bring down deficits by more than $200 billion over the next decade.
\nStill, the deficit-reducing impact of that one bill is expected to be swamped by the deficit-increasing impact of various additional bills and policies Biden has approved.
\nWage growth
\nBiden said, \u201cWages are up, and they\u2019re growing faster than inflation. Over the past six months, inflation has gone down every month and, God willing, will continue to do that.\u201d
\nFacts First:\u00a0Biden\u2019s claim that wages are up and growing faster than inflation is true if you start the calculation seven months ago; \u201creal\u201d wages, which take inflation into account, started rising in mid-2022 as inflation slowed. (Biden is\u00a0right\u00a0that inflation has declined, on an annual basis, every month for the last six months.) However, real wages are lower today than they were both a full year ago and at the beginning of Biden\u2019s presidency in January 2021. That\u2019s because inflation was so high in 2021 and the beginning of 2022.
\nThere are various ways to measure real wages. Real average hourly earnings declined\u20021.7%\u00a0between December 2021 and December 2022, while real average weekly earnings (which factors in the number of hours people worked) declined 3.1% over that period.
\nHouse Republicans and the deficit
\nBiden said he was disappointed that the first bill passed by the new Republican majority in the House of Representatives \u201cadded $114 billion to the deficit.\u201d
\nFacts First:\u00a0Biden is correct about how the bill would affect the deficit if it became law. He accurately cited an estimate from the government\u2019s nonpartisan Congressional Budget Office.
\nThe bill would\u00a0eliminate more than $71 billion\u00a0of the $80 billion in additional funding for the Internal Revenue Service (IRS) that Biden signed into law in the Inflation Reduction Act. The Congressional Budget Office\u00a0found\u00a0that taking away this funding \u2013 some of which the Biden administration said\u00a0will go toward increased audits of high-income individuals and large corporations\u00a0\u2013 would result in a loss of nearly $186 billion in government revenue between 2023 and 2032, for a net increase to the deficit of about $114 billion.
\nThe Republican bill has no chance of becoming law under Biden, who has\u00a0vowed to veto it\u00a0in the highly unlikely event it got through the Democratic-controlled Senate.
\nHouse Republicans and taxes
\nBiden said that \u201cMAGA Republicans\u201d in the House \u201cwant to impose a 30 percent national sales tax on everything from food, clothing, school supplies, housing, cars \u2013 a whole deal.\u201d He said they want to do that because \u201cthey want to eliminate the income tax system.\u201d
\nFacts First:\u00a0This is a fair description of the Republicans\u2019 \u201cFairTax\u201d\u00a0bill. The bill would eliminate federal income taxes, plus the payroll tax, capital gains tax and estate tax, and\u00a0replace it with a national sales tax. The bill describes a rate of 23% on the \u201cgross payments\u201d on a product or service, but when the tax rate is\u00a0described\u00a0in the way consumers are used to sales taxes being described, it\u2019s actually right around 30%,\u00a0as a pro-FairTax website acknowledges.
\nIt is not clear how much support the bill currently has among the House Republican caucus. Notably, House Speaker Kevin McCarthy\u00a0told CNN\u2019s Manu Raju this week\u00a0that he opposes the bill \u2013 though, while seeking right-wing votes for his bid for speaker in early January, he promised its supporters that it\u00a0would be considered\u00a0in committee. Biden wryly said in his speech, \u201cThe Republican speaker says he\u2019s not so sure he\u2019s for it.\u201d
\nThe unemployment rate
\nBiden claimed\u00a0the unemployment rate\u00a0\u201cis the lowest it\u2019s been in 50 years.\u201d
\nFacts First:\u00a0This is true. The unemployment rate was just below 3.5% in December, the lowest figure since 1969.
\nThe headline monthly rate, which is rounded to a single decimal place, was reported as 3.5% in December and also reported as 3.5% in three months of President Donald Trump\u2019s tenure, in late 2019 and in early 2020. But if you look at\u00a0more precise figures, December was indeed the lowest since 1969 \u2013 3.47% \u2013 just below the figures for\u00a0February 2020,\u00a0January 2020\u00a0and\u00a0September 2019.
\nUnemployment among demographic groups
\nBiden said that the unemployment rates for Black and Hispanic Americans are \u201cnear record lows\u201d and that the unemployment rate for people with disabilities is \u201cthe lowest ever recorded\u201d and the \u201clowest ever in history.\u201d
\nFacts First:\u00a0Biden\u2019s claims are accurate, though it\u2019s worth noting that the unemployment rate for people with disabilities\u00a0has only been released by the government since 2008.
\nThe Black or African American unemployment\u00a0rate\u00a0was 5.7% in December, not far from the record low of 5.3% that was set in August 2019. (This data series goes back to 1972.) The rate was 9.2% in January 2021, the month Biden became president. The Hispanic or Latino unemployment\u00a0rate\u00a0was 4.1% in December, just above the record low of 4.0% that was set in September 2019. (This data series goes back to 1973.) The rate was 8.5% in January 2021.
\nThe unemployment rate for people with disabilities was 5.0% in December, the lowest since the beginning of the data series in 2008. The rate was 12.0% in January 2021.
\nForeclosures
\nBiden said that fewer families are facing foreclosure than before the pandemic.
\nFacts First:\u00a0Biden is correct. According to a\u00a0report\u00a0published by the Federal Reserve Bank of New York, about 28,500 people had new foreclosure notations on their credit reports in the third quarter of 2022, the most recent quarter for which data is available; that was\u00a0down\u00a0from about 71,420 people with new foreclosure notations in the fourth quarter of 2019 and 74,860 people in the first quarter of 2020.
\nForeclosures plummeted in the second quarter of 2020 because of government moratoriums put in place because of the Covid-19 pandemic. Foreclosures spiked in 2022, relative to 2020-2021 levels, after the expiry of these moratoriums, but they remained very low by historical standards.
\nHealth insurance coverage
\nBiden said, \u201cMore American families have health insurance today than any time in American history.\u201d
\nFacts First:\u00a0Biden\u2019s claim is accurate. An analysis provided to CNN by the Kaiser Family Foundation, which studies US health care, found that about 295 million US residents had health insurance in 2021, the highest on record \u2013 and\u00a0Jennifer Tolbert, the foundation\u2019s director for state health reform, told CNN this week that \u201cI expect the number of people with insurance continued to increase in 2022.\u201d
\nTolbert noted that the number of insured residents generally rises over time because of population growth, but she added that \u201cit is not a given\u201d that there will be an increase in the number of insured residents every year \u2013 the number declined slightly under Trump from 2018 to 2019, for example \u2013 and that \u201cpolicy changes as well as economic factors also affect these numbers.\u201d
\nAs CNN\u2019s Tami Luhby has\u00a0reported, sign-ups on the federal insurance exchange created by the Affordable Care Act, also known as Obamacare, have\u00a0spiked nearly 50%\u00a0under Biden. Biden\u2019s 2021 American Rescue Plan pandemic relief law and then\u00a0the 2022 Inflation Reduction Act\u00a0temporarily boosted federal premium subsidies for exchange enrollees, and the Biden administration has also taken\u00a0various other steps\u00a0to get people to sign up on the exchanges. In addition, enrollment in Medicaid health insurance has increased significantly during the Covid-19 pandemic, in part because of a bipartisan 2020 law that\u00a0temporarily prevented\u00a0people from being disenrolled from the program.
\nThe percentage of residents without health insurance fell to an all-time low of 8.0% in the first quarter of 2022, according to an\u00a0analysis\u00a0published last summer by the federal government\u2019s Department of Health and Human Services. That meant there were 26.4 million people without health insurance, down from 48.3 million in 2010, the year Obamacare was signed into law.
\nBusiness applications
\nBiden said, \u201cAnd over the last two years, more than 10 million people have applied to start a small business. That\u2019s more than any two years in all of recorded American history.\u201d
\nFacts First:\u00a0This is true. There were\u00a0about 5.4 million business applications in 2021, the highest since 2005 (the first year for which the federal government released this data for a full year), and about 5.1 million business applications in 2022. Not every application turns into a real business, but the number of \u201chigh-propensity\u201d business applications\u00a0\u2013 those deemed to have a high likelihood of turning into a business with a payroll \u2013 also hit a record in 2021 and saw its second-highest total in 2022.
\nTrump\u2019s last full year in office, 2020, also set a then-record for total and high-propensity applications. There are various reasons for the\u00a0pandemic-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 to start their own enterprises; Americans had extra money from stimulus bills signed by Trump and Biden; interest rates were particularly low until a series of rate hikes that began in the spring of 2022.<\/p>\n