FactChecking the State of the Union

By  and Factcheck.org

Summary

President Joe Biden put his spin on some facts, particularly about the economy, in his Feb. 7 State of the Union address:

  • Biden boasted that the 12.1 million jobs created in his first two years were more than the number of jobs added in four years under any president. But that job growth was fueled by a post-pandemic recovery that started under his predecessor, and his comparison doesn’t account for population growth.
  • The president said “take-home pay has gone up,” which is true, but the rise is not as fast as inflation. “Real” weekly earnings, which are adjusted for inflation, have gone down.
  • Biden said he has cut the deficit by a record $1.7 trillion, but most of that was due to expiring emergency pandemic spending.
  • He said “no president added more to the national debt in any four years” than his predecessor, Donald Trump, and that “nearly 25% of the entire national debt” was added by Trump. It’s accurate, but trillions of dollars of the accumulated debt under Trump were due to bipartisan coronavirus relief packages.
  • Biden said “for too many decades, we imported projects and exported jobs,” but now “we’re exporting American products and creating American jobs.” In fact, U.S. imports of goods and services have continued to exceed exports under Biden.
  • The president repeated a claim popular among Democrats during the midterms, suggesting that some Republicans would “sunset” Medicare and Social Security. The claim exaggerates the support for a proposal from Sen. Rick Scott that would have brought up all federal legislation for a vote every five years.
  • With the Bipartisan Infrastructure Law, the U.S. is “replacing poisonous lead pipes that go into 10 million homes in America, 400,000 schools and childcare centers,” he said. But the law didn’t provide enough funding to replace all lead pipes.
  • As he did last year, Biden said U.S. infrastructure had “sunk to 13th in the world.” But some have questioned the report behind that statistic.

Analysis

Jobs

In boasting about job growth, the president said that more jobs were created in his first two years than in four years under any president.

“Two years ago, the economy was reeling,” Biden said. “I stand here tonight, after we’ve created — with the help of many people in this room — 12 million new jobs. More jobs created in two years than any president has created in four years.”

The president is cherry-picking the data.

For starters, the job growth under Biden was fueled by a post-pandemic job recovery that started under his predecessor.

The World Health Organization on March 11, 2020, declared COVID-19 a pandemic. The deadly pandemic sent U.S. residents into lockdown and forced businesses to close. The U.S. job market bottomed out in April 2020, when the U.S. had 21.9 million fewer jobs than the pre-COVID employment peak in February 2020, according to the Bureau of Labor Statistics.

It is true that the U.S. economy has added 12.1 million jobs in Biden’s first 24 months. But the economy also added 12.5 million jobs in Trump’s final nine months in office.

Since April 2020, the U.S. has added a total of 24.6 million jobs under both presidents. That’s 2.7 million more than the number of jobs lost during the pandemic.

Biden’s apples-to-oranges job comparison also benefits from the fact that there are more people in the job market now than under past presidents.

Under Jimmy Carter, the U.S. economy added 10.3 million jobs in four years. While larger, the 12.1 million jobs added so far under Biden represents a job growth of 8.5% — far less than the 12.8% job growth under Carter.

President Lyndon Johnson assumed the presidency after John F. Kennedy’s assassination in 1963 and was reelected in 1964. In LBJ’s only full term in office, from January 1965 to January 1969, the U.S. economy added 9.9 million jobs — a 16.54% job growth that is nearly double the rate in Biden’s first two years.

Wages

The president, while admitting “we have more to do,” said the economy has been improving, specifically inflation and wages.

“Inflation has fallen every month for the last six months, while take-home pay has gone up,” he said.

He’s right that the inflation rate for the past 12 months was 6.5% in December — which was the sixth straight month that the year-over-year inflation rate had declined. Wages also have gone up under Biden, but not as fast as prices — so the “take-home pay,” as Biden called it, doesn’t buy as much as it used to.

Average weekly earnings for rank-and-file workers went up 11% during Biden’s first 24 months in office, according to monthly figures compiled by the BLS. Those production and nonsupervisory workers make up 81% of all employees in the private sector.

But what are called “real” weekly earnings, adjusted for inflation and measured in dollars valued at their average level in 1982-84, actually declined 3.7% since Biden took office in January 2021.

But, as Biden said, recently real wages have been rising as inflation has moderated. During the last half of 2022, real weekly earnings rose 1.4%.

Deficit Down Due to Expiring COVID-19 Relief

Biden boasted that he has reduced the deficit by a record $1.7 trillion.

“In the last two years, my administration has cut the deficit by more than $1.7 trillion – the largest deficit reduction in American history,” Biden said.

The amount of the two-year drop in deficits is accurate. The FY 2020 deficit was $3.13 trillion and the FY 2022 deficit was $1.375 trillion. That translates to a roughly $1.7 trillion drop. But the deficit in FY 2022 is still nearly 41% higher than it was in FY 2019, before the pandemic hit.

As we wrote back in April, most of the reduction in deficits is the result of expiring emergency pandemic spending. The Congressional Budget Office estimated in February 2021 — shortly after Biden took office and before any of Biden’s fiscal policies were enacted — that due to expiring pandemic relief, the combined deficits in FY 2021 and FY 2022 would total $3.31 trillion, a big decline considering that in FY 2020 the one-year total alone was $3.13 trillion. But the deficits for FY 2021 and 2022 ended up totaling $4.15 trillion. In other words, the deficits for those years ended being about $840 billion more than expected.

Biden argues that growth in the economy as a result of his policies are the reason why deficits dropped, but the Committee for a Responsible Federal Budget says that doesn’t add up.

“100% of the deficit reduction, on net, was the result of waning COVID relief,” Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, told us via email. “That’s because while higher revenue (due to inflation as much as growth!) did reduce deficits even further, additional legislative and executive actions (especially student debt cancellation, which they weirdly recorded in FY2022) and higher interest rates pushed in the other direction.” (Biden’s student debt cancellation program was paused by a District Court judge in November, and its fate will now be determined by the Supreme Court.)

In a blog post on Oct. 21, at the end of the 2022 fiscal year, CRFB said that deficits fell more than expected last year “due to a combination of lower unemployment, faster economic recovery, and higher inflation, partially offset by higher interest rates.”

But, CRFB warned, “while economic changes reduced the deficit by $310 billion in FY 2022, they will actually increase deficits by over $1.5 trillion between 2023 and 2032 under [the Congressional Budget Office’s] baseline. Factors such as higher inflation tend to increase revenues in the near-term but increase spending and push up interest costs over time. Economic changes are likely to boost deficits even further when including more recent economic data, since interest rates are now much higher and economic growth much weaker than CBO projected in the spring.”

“All said, the decline in the deficit over the past fiscal year is more than entirely the result of waning COVID relief and not of historic deficit reduction by President Biden as the White House claims,” CRFB wrote. “In fact, the President’s actions to date have increased deficits by $4.8 trillion through 2031.”

Debt and Deficits Under Trump

Biden also took aim at the deficits and debt rolled up by his predecessor, Donald Trump.

“Under the previous administration, the American deficit went up four years in a row,” Biden said. “Because of those record deficits, no president added more to the national debt in any four years than my predecessor. Nearly 25% of the entire national debt, that took over 200 years to accumulate, was added by just one administration alone, the last one. They’re the facts. Check it out. Check it out.”

The total national debt did go up by $7.8 trillion during Trump’s four years. It rose from nearly $20 trillion the day Trump was inaugurated to nearly $27.8 trillion on the day he left office.

That figure, however, includes money the U.S. owes to itself. We typically use figures for the amount of debt held by the public, which went up by $7.2 trillion during Trump’s time in office, from $14.4 trillion on the day Trump was inaugurated to $21.6 trillion four years later when Biden was sworn in.

By either measure, Biden is correct that more than 25% of the debt was accumulated while Trump was president. It’s also true that debt held by the public went up by $8.1 trillion during the eight years of former President Barack Obama and Vice President Biden. So an even bigger share of the debt inherited by Biden was accumulated when he was vice president.

As we have written, while Biden’s statistic is accurate, it leaves a misleading impression because trillions of dollars of the accumulated debt under Trump was due to bipartisan coronavirus relief packages. It’s true, as Biden said, that deficits went up every year under Trump — in part due to the 2017 tax cut law that was was supported only by Republicans. But deficits exploded during the pandemic, jumping from just under $1 trillion in FY 2019 to $3.13 trillion in FY 2020.

Before the pandemic, the deficits in the three prior years under Trump were lower than all of the deficits in Obama’s first four years in office (but higher than the deficits in Obama’s last three years in office). And, as we noted earlier, the pre-pandemic deficits under Trump are significantly lower than any year under Biden so far.

Trade Deficit

Under Biden, U.S. imports of goods and services have continued to exceed exports. However, Biden gave the false impression that was no longer the case.

“For too many decades, we imported projects and exported jobs,” he said. “Now, thanks to what you all have done, we’re exporting American products and creating American jobs.”

According to the latest figures from the Bureau of Economic Analysis, U.S exports of goods and services totaled over $3 trillion in 2022 — up more than $453 billion from 2021 and $851 billion from 2020. But imports of goods and services, which totaled over $3.9 trillion last year, have grown even faster — up $556 billion from 2021 and $1.1 trillion from 2020.

Overall, the U.S. trade deficit in goods and services was $948 billion in 2022. That’s now the highest annual deficit going back to 1960, and it’s up 12% from the deficit in 2021 and nearly 45% higher than 2020.

As for what Biden said about creating and exporting jobs, an expert in international trade economics previously told us that “the trade balance is a very poor reflection of what’s going on in the labor market in the U.S.”

Medicare and Social Security

Republicans in Congress booed the president when he suggested that some among them would “sunset” Medicare and Social Security — Rep. Marjorie Taylor Greene shouted “liar.”

“Some of my Republican friends want to take the economy hostage — I get it — unless I agree to their economic plans,” Biden said. “All of you at home should know what those plans are. Instead of making the wealthy pay their fair share, some Republicans, some Republicans want Medicare and Social Security to sunset. I’m not saying it’s the majority. Anybody who doubts it, contact my office. I’ll give you a copy of the proposal.”

We did. His office referred us to a news story that mentioned a proposal from Sen. Rick Scott that would have required all federal legislation to be subject to renewal every five years. Both Medicare and Social Security were created by legislation.

As we’ve written before, Scott didn’t specifically mention Medicare or Social Security in his proposal, but he did acknowledge that they would be included — although he said his aim was to “fix” the programs.

Scott — of Florida, who was chairman of the National Republican Senatorial Committee — said in a March 27 interview on Fox News, “No one that I know of wants to sunset Medicare or Social Security, but what we’re doing is we don’t even talk about it.”

And, at a press conference on March 1, Scott stood behind Sen. Mitch McConnell as he said, “We will not have as part of our agenda a bill that raises taxes on half of the American people and sunsets Social Security and Medicare within five years. That will not be part of a Republican Senate majority agenda.”

So, it’s a stretch to claim that there was anything close to significant support for ending the programs among Republicans — not even the proposal’s author supported ending them.

Lead Pipe Replacement

While talking about what the Bipartisan Infrastructure Law will do, Biden said, “We’re also replacing poisonous lead pipes that go into 10 million homes in America, 400,000 schools and childcare centers, so every child in America — every child in America — can drink the water instead of having permanent damage to their brain.”

But as we have explained before, the $15 billion provided by the infrastructure law for lead pipe replacement is not nearly enough to replace all lead pipes. According to a basic calculation by the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution in February 2022, the cost of replacing 10 million lead service lines is $47 billion, based on the Environmental Protection Agency’s estimated average cost for replacing a line.

“A back-of-the-envelope calculation based on EPA’s estimate of average replacement cost per line ($4,700) and assumption of 6 to 10 million lead service lines across the country suggests the cost could range from $28 billion to $47 billion, putting Biden’s originally-proposed $45 billion near the top of that range—but the $15 billion legislated well below it,” experts from Brookings wrote.

On Jan. 27, the Biden administration announced “new actions and progress” to remove lead pipes and paint. Those actions included the creation of a partnership between private and public organizations to “leverage existing efforts and funding” to “help accelerate” the goal of “the replacement of 100 percent of the Nation’s lead service lines in 10 years.” There’s also a partnership between the EPA and four states (Connecticut, New Jersey, Pennsylvania and Wisconsin) to “accelerate progress” in the identification and replacement of lead service lines.

In a press release about that initiative, EPA said that in addition to the $15 billion for lead service line replacement in the infrastructure law, “$11.7 billion of general Drinking Water State Revolving Funds … can also be used for lead service line replacement.”

The White House has said that other funds can also be used by state, local and tribal governments for replacing lead service lines, such as the $350 billion in aid provided under the American Rescue Plan. During a visit to Philadelphia on Feb. 3, Biden said Pittsburgh, Pennsylvania, already used $17.5 million “as part of their plan to replace lead service lines in the city by 2026.”

“They got to do that through this state and throughout — we got to do it throughout the country,” he added in his Feb. 3 remarks.

Whether that will happen or not, remains to be seen.

Infrastructure

In talking about the bipartisan infrastructure law, Biden repeated a claim he made in last year’s speech: “We used to be No. 1 in the world in infrastructure. We’ve sunk to 13th in the world. The United States of America: 13th in the world in infrastructure.”

As we wrote a year ago, his claim is based on a 2019 Global Competitiveness Report by the World Economic Forum, in which the U.S. overall ranked second among 141 economies, but 13th in infrastructure.

But some said the report underrated the U.S. The Washington Post’s Charles Lane said the countries ranked higher than the U.S. were smaller and not comparable to a country as large as this. When considering the largest countries in the world, both geographically and in terms of population, the U.S. comes first in terms of infrastructure in the list. China, for example, ranked 36th, Canada 26th, India 70th and the Russian Federation 50th. Also, the 13th place is an improvement when compared with the 2011-12 report that ranked U.S. infrastructure in 24th place out of 142 economies.


Editor’s note: FactCheck.org does not accept advertising. We rely on grants and individual donations from people like you. Please consider a donation. Credit card donations may be made through our “Donate” page. If you prefer to give by check, send to: FactCheck.org, Annenberg Public Policy Center, 202 S. 36th St., Philadelphia, PA 19104. 

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