President Joe Biden delivered his second State of the Union address on Tuesday.
Here is a fact check of some of the claims from Biden and the Republican response by Arkansas Gov. Sarah Huckabee Sanders:
Cutting the deficit
Biden claimed his administration cut the federal deficit by “more than $1.7 trillion.”
Facts First: Biden’s boast leaves out important context. It is true that the federal deficit fell by $1.7 trillion under Biden in the 2021 and 2022 fiscal years, including a record $1.4 trillion drop in 2022 – but it is highly questionable how much credit Biden deserves for this reduction. Biden did not mention that the primary reason the deficit fell so substantially was that it had skyrocketed to a record high under then-President Donald Trump in 2020 because of bipartisan emergency pandemic relief spending, then fell as expected when the spending expired as planned. Independent analysts say Biden’s 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.
Dan White, senior director of economic research at Moody’s Analytics – an economics firm whose assessments Biden has repeatedly cited during his presidency – told CNN’s Matt Egan in October: “On net, the policies of the administration have increased the deficit, not reduced it.” The Committee for a Responsible Federal Budget, an advocacy group, wrote in September that Biden’s actions will add more than $4.8 trillion to deficits from 2021 through 2031, or $2.5 trillion if you don’t count the American Rescue Plan pandemic relief bill of 2021.
National Economic Council director Brian Deese wrote on the White House website in January that the American Rescue Plan pandemic relief bill “facilitated a strong economic recovery and enabled the responsible wind-down of emergency spending programs,” thereby reducing the deficit; David Kelly, chief global strategist at J.P. Morgan Funds, told CNN in October that the Biden administration does deserve credit for the recovery that has pushed the deficit downward. And Deese correctly noted that Biden’s signature legislation, last year’s Inflation Reduction Act, is expected to bring down deficits by more than $200 billion over the next decade.
Still, 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.
From CNN’s Daniel Dale
Small business applications
Biden touted American small business applications.
Facts First: This is true. There were about 5.4 million business applications in 2021, the highest number 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 “high-propensity” business applications – those deemed to have a high likelihood of turning into a business with a payroll – also hit a record in 2021 and saw its second-highest total in 2022.
Former President Donald Trump’s last full year in office, 2020, also set a then-record for total and high propensity applications. 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 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.
From CNN’s Daniel Dale
Unemployment among demographic groups
Biden touted low unemployment rates.
Facts First: Biden’s claims are accurate.
The Black or African American unemployment rate was 5.4% in January 2023, just above the record low of 5.3% set in August 2019. (This data series goes back to 1972.) The rate was 9.2% in January 2021, the month Biden took office.
The Hispanic or Latino unemployment rate was 4.5% in January 2023, not too far from the record low of 4.0% that was set in September 2019 – though the 4.5% rate in January 2023 was a jump from the 4.1% rate in December 2022. (This data series goes back to 1973.) The rate was 8.5% in January 2021.
From CNN’s Daniel Dale
Trump and the national debt
Biden criticized the fiscal management of former President Donald Trump’s administration.
Facts First: Biden’s claim is correct. The national debt, now more than $31 trillion, increased by just under $8 trillion during Trump’s four years in office, in part because of Trump’s major tax cuts. It’s important to note, though, that some of the increase in the debt during the Trump era was because of the trillions in emergency Covid-19 pandemic relief spending that passed with bipartisan support. The national debt spiked in the first half of 2020 after increasing gradually during Trump’s first three years in office, and because of spending required by safety-net programs that were created by previous presidents. A significant amount of spending under any president is the result of decisions made by their predecessors.
Charles Blahous, a researcher at the Mercatus Center at George Mason University who authored the 2021 paper “Why We Have Federal Deficits,” wrote that the impact of recent legislation on the long-term structural fiscal imbalance is dwarfed by the creation of Medicare and Medicaid and increases to Social Security, all of which occurred between 1965 and 1972.
“Despite all the political rhetoric expended today to cast blame for skyrocketing federal deficits on either the Joseph R. Biden Jr. administration or the Donald J. Trump administration, on either congressional Democrats or congressional Republicans, the largest drivers of the structural federal fiscal imbalance were enacted roughly a half-century ago,” Blahous wrote.
From CNN’s Katie Lobosco and Daniel Dale
Manufacturing investments
Biden claimed that a new law, the bipartisan CHIPS and Science Act, will produce hundreds of thousands of new jobs.
Facts First: Biden’s prediction about future job creation is obviously beyond the scope of a fact check. But his claim about companies having announced $300 billion in manufacturing investments during his presidency is accurate; the White House provided CNN with a list of these publicly announced investments. (It’s worth noting that companies sometimes end up investing less than they initially announce.)
The majority of the manufacturing investments that have been publicly announced under Biden to date have been investments in semiconductor facilities. The Biden administration has emphasized the importance of US semiconductor manufacturing, and Biden signed a bill in August that has helped to generate major investment.
From CNN’s Daniel Dale
The unemployment rate
Touting economic progress, Biden said:
Facts First: This is true. The unemployment rate was 3.4% in January 2023, the lowest figure since the rate also hit 3.4% in May 1969. The unemployment rate was 6.3% in January 2021, the month Biden took office.
From CNN’s Daniel Dale
Electric vehicle tax credits
Biden, speaking about the Inflation Reduction Act, said:
Facts First: This claim needs context. While Inflation Reduction Act tax credits will help save families money on their energy bills, it could take years for EV tax credits to become fully available.
Biden’s claim about energy savings is similar to an estimate from clean electricity nonprofit Rewiring America – which estimated last year that a US household could save $1,800 per year if they installed electric heat pumps to heat their water and heat and cool their air, replaced a gas car with an EV, and installed solar.
Ultimately, new electric vehicles will be eligible for up to $7,500. But there’s a big catch: in order to qualify for these tax credits, the vehicles’ final assembly must happen in North America. At the insistence of Democratic Sen. Joe Manchin of West Virginia, the IRA has strict requirements for how many electric vehicle and EV battery components must be made in the US or countries that have a free trade deal with the US.
The US Treasury Department is expected to issue guidance on critical minerals and batteries in March. But the complex requirements for these tax credits could take years to fully kick in as companies must move their supply chain to North America.
Starting this year, 40% or more of the critical minerals used to create a vehicle’s battery must be extracted or processed in the United States, or a country that has a free trade deal with the US, for the vehicle to qualify for tax credits. That number will gradually rise to 80% of the battery minerals by 2027 and reach 100% by 2029.
This provision passed because Manchin wanted the US to compete with China on electric vehicles, and it will eventually have the impact of bringing more EV and battery jobs to the US or countries it has a free trade agreement with. The measure has already resulted in several companies announcing new factories in the US.
But it’s also a complex provision that will take time to implement, likely meaning vehicle manufacturers won’t be able to offer the credit in the next couple years as they move their supply chains to the US and North America.
From CNN’s Ella Nilsen
Child poverty cut in half
In calling to revive the Democrats’ enhancement of the child tax credit in 2021, Biden pointed to the fact that the provision helped slash the child poverty rate that year.
Facts First: This is true. The child poverty rate was cut nearly in half in 2021, and the expanded child tax credit was the major factor. The enhancement accounted for the bulk of the reduction.
The child poverty rate fell from 9.7% in 2020 to 5.2% in 2021, according to the US Census Bureau’s Supplemental Poverty Measure, which takes into account certain non-cash government assistance, tax credits and needed expenses.
That’s a reduction of 46%, sending the rate to the lowest level since the supplemental measure began in 2009.
The child tax credit – both the traditional credit and the enhancement – reduced the child poverty rate from 9.2% to 5.2%, or 43%, according to the Census Bureau. Without the beefed-up credit, the rate would have only fallen from 9.2% to 8.1%, or 12%.
As part of the $1.9 trillion American Rescue Plan Act that passed in March 2021, Congress enhanced the child tax credit for one year, beefing up payments to $3,600 for each child up to age 6 and $3,000 for each one ages 6 through 17, for lower- and middle-income families. For the first time, half the credit was paid in monthly installments from July through December, while parents could claim the other half when they filed their 2021 taxes this year.
Also, more low-income parents became eligible for the full amount because lawmakers made it fully refundable.
From CNN’s Tami Luhby
Gas prices down since their peak
Biden touted progress against inflation.
Facts First: Biden’s claim is correct. He didn’t mention, however, that gas prices are still significantly higher today than they were when he took office. And it’s important to note that presidential policy has a limited impact on gas prices, which are determined by a complex global interplay of supply and demand factors.
As of the day of the State of the Union, the national average for a gallon of regular gas was $3.457, per data from the American Automobile Association. That was indeed down more than $1.50 from a record high of $5.016 in mid-June. But it was still up from a national average of $2.393 on Biden’s Inauguration Day in January 2021.
Biden has taken steps to lower gas prices. Following Russia’s invasion of Ukraine in early 2022, which contributed to a spike in gas prices, the Biden administration released 180 million barrels of oil from the national Strategic Petroleum Reserve. The administration also issued an emergency waiver that allowed the sale of E15 gasoline, a blend that contains 15% ethanol, last summer. A White House official noted Wednesday that the price of gas today is lower than it was when the Russian invasion began.
But as we regularly note – whether a president is boasting about a decline in gas prices or his critics are blasting him for an increase in gas prices – presidential policy is not a primary factor in the price of gasoline.
“Similar to why the primary reason for rise in price isn’t due to the President, the same holds true for declines,” Patrick De Haan, head of petroleum analysis at GasBuddy, told CNN in a message this week. Asked about the role of the president in the decline since the peak of mid-2022, De Haan said: “While the president may have had a minimal role in lowering prices through easing regulation, and occasionally using waivers, the bulk of the decline is simply due to supply and demand changes, and Russian oil and refined products that are still being exported, providing needed supply to the global market.”
De Haan said Biden’s releases of oil from the strategic reserve “put some downward pressure on the price of oil, but I would not call it materially significant.”
The White House official responded Wednesday by pointing to an analysis from the administration’s Treasury Department that estimated that the releases of reserve oil by the US and its allies could have reduced the price of gas by 40 cents a gallon.
From CNN’s Daniel Dale
Job creation
Biden claimed to have created more jobs “in two years than any president has ever created in four years.”
Facts First: Biden’s number is accurate: the US economy added 12.1 million jobs between Biden’s first full month in office, February 2021, and January 2023. That number is indeed higher than the number of jobs 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 economy shed nearly 22 million jobs over two months, March 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.
Biden is free to argue that his stimulus legislation and other policies have helped the country gain jobs faster than it otherwise would have. (As always, it’s debatable precisely how much credit the president deserves for job-creation.) Nonetheless, it is clear that there could only be such an extraordinary number of jobs added in 2021 and 2022 because there was such an extraordinary number of jobs lost in early 2020.
From CNN’s Daniel Dale
Biden on democracy spreading
While touting his efforts to stand up to authoritarian leaders in China and Russia, Biden painted himself as a champion of freedom and inaccurately claimed that democracy was spreading under his watch.
Facts First: This claim is at odds with data from Freedom House, a leading nonprofit that tracks democracy and human rights around the world. They say democracy has been in global decline over the past few years.
The group’s most recent annual report on the state of global democracy, released in February 2022, was aptly titled, “The Global Expansion of Authoritarian Rule.” Their 2021 report was called, “Democracy under Siege.”
Getting into the data, Freedom House says 60 countries experienced democratic backsliding in the previous year, while only 25 countries improved their position. The group highlighted backsliding in Sudan, Nicaragua and Afghanistan, where the Taliban reclaimed power when Biden withdrew all American troops from the country.
Freedom House’s most recent report is one year old, with a new report likely coming out soon. And to be fair, Biden could merely be expressing his view that autocratic regimes have lost prestige on the world stage.
But the trends appear to be holding. For instance, after Russian President Vladimir Putin invaded Ukraine last year, he initiated a domestic crackdown that rolled back the few remaining civil liberties that existed in Russia.
Freedom House is largely funded by grants from the US government.
From CNN’s Marshall Cohen
Building electric vehicle charging stations
Biden highlighted his administration’s work to build more electric vehicle charging stations.
Facts First: This is more of a promise than a fact, but even so, it needs context. For a few reasons, it’s questionable whether the Biden administration will be able to meet its goal of installing 500,000 electric vehicle charging stations on US roads.
Installing 500,000 electric vehicle charging stations has long been one of Biden’s goals. The president initially proposed Congress spend $15 billion to make it a reality, but just half of that – $7.5 billion – passed as part of the 2021 bipartisan infrastructure bill.
Though the administration has said that could be backfilled by private investment, that change in funding could hinder the administration’s ability to meet the goal. States can now unlock more than $900 million in funding for fiscal years 2022 and 2023, which the administration estimated will “help build” chargers across approximately 53,000 miles of US highways. Over the next five years, the full $5 billion will be spent to build out a network of EV chargers on major highways. Another pot of $2.5 billion in grant funding is also available for states to apply to.
There is also a wide range in how much different types of chargers cost, and individual states have a lot of leeway in deciding what kinds of chargers will go on their roads. DC fast chargers can charge a car to mostly full in 20 minutes to an hour and are meant to go on major highways and roads. Another kind of charger known as an L2 charger can take hours to charge a car to full. But DC fast chargers are much more expensive, costing around $100,000 compared to around $6,000 for an L2, Ellen Hughes-Cromwick, a senior resident fellow at the think tank Third Way, has told CNN.
In an interview with climate publication Grist last year, Transportation Secretary Pete Buttigieg said that ultimately the number of EV chargers on the roads “really depends on how the states decide to mix the fast chargers and different types of technology.”
From CNN’s Ella Nilsen
Biden on creating 800,000 ‘good-paying’ manufacturing jobs
In another claim about the economy, Biden claimed to have created “800,000 good-paying manufacturing jobs.”
Facts First: Biden’s figures are correct; however, the “good-paying” qualifier is subjective and can’t be independently verified for each of those 800,000-plus positions.
The US economy added 803,000 manufacturing jobs from Biden’s first full month in office, February 2021, through January 2023, according to the Bureau of Labor Statistics. The job growth rate during Biden’s first two years in office was 6.58%. The last time a comparable growth rate was higher was in 1979.
The average hourly wage in the manufacturing industry was $31.57 for all employees and $25.84 for production and non-supervisory positions in January, preliminary BLS data shows. Nationally, the average hourly wage was a projected $33.03.
From CNN’s Alicia Wallace
Biden on burger chain employees being forced to sign non-compete agreements
Biden said 30 million workers had to sign non-compete agreements, illustrating his point with an example of a cashier at a burger place being unable to cross the street to take a similar job at a restaurant that pays more money.
Facts First: This is partially true. Millions of rank-and-file employees and independent contractors, in addition to business executives across industries, have signed non-compete agreements that critics say suppress competition, wages and entrepreneurship. The Federal Trade Commission in January proposed a rule to ban employers from imposing those agreements on workers and to rescind all existing noncompete agreements. But are burger chain workers really subject to those noncompete agreements? It’s not likely – not anymore, anyway.
An investigation in Washington state in 2017 revealed that several fast-food chains, including Arby’s, Auntie Anne’s, Buffalo Wild Wings, Carl’s Jr., Cinnabon, Jimmy John’s, and McDonald’s, had been enforcing no-poaching rules that prevented employees from moving between franchises within the same chain – not, as Biden suggested, between rival chains. By 2018, all those chains agreed to end their no-poach practices at roughly 25,000 restaurants nationwide.
From CNN’s David Goldman