Fact check: Biden’s latest false statistical claims about the economy

(CNN) President Joe Biden has made another series of inaccurate claims in an economics speech.

In late January, CNN verified Biden’s false and misleading claims in a business speech to union members in Virginia. In a speech this Wednesday to union members in Maryland, Biden repeated one of those claims and made three other false statements — all about statistics.

Trump and the national debt

In Wednesday’s speech, Biden criticized ex-President Donald Trump’s fiscal policy. After correctly noting that the federal budget deficit grew every year during Trump’s tenure, Biden said, “And because of those record deficits, no president has added more to the national debt — that’s 200 years of debt — has never added more to the national debt.” than my predecessor.”

Facts first: This claim is wrong. The eight years of President Barack Obama with Biden as vice president added more debt than the four years of Trump. The Trump era set the record for most debt added in a single four-year presidential term, but Biden here made it sound like the Trump era set the record, even if you like two-term presidents Include Obama. (Biden correctly said in his State of the Union address last week, that he was referring to a debt record added over a four-year period.) While Biden mentioned “record deficits,” plural, under Trump, just a Trump-era deficit that Pandemic-era fiscal 2020 was indeed a record; the deficits in fiscal years 2017, 2018 and 2019 everything lower than any deficit in Obama’s first term, when the country emerged from one great recession and Obama approved some guidelines that increased deficits.

There are several ways to measure debt. Using the basic headline, total national debt, the debt increased by about $9.3 trillion over Obama’s eight years, from about $10.6 trillion on the day of his inauguration in 2009 to about $19.9 trillion dollars on Trump’s inauguration day in 2017. The debt increased by about $7.8 trillion over Trump’s four years to about $27.8 trillion when Biden replaced him in 2021.

It is also important to note that it is an oversimplification to hold presidents solely responsible for the debt incurred during their tenure.

A significant portion of every president’s spending is the result of decisions made by his predecessors — like the creation of Social Security, Medicare, and Medicaid decades ago — and circumstances beyond a president’s control, like an inherited recession for Obama and the global Covid -19 pandemic for Trump.

And while some debts can be attributed to a single party — Trump’s 2017 tax cuts, which were unanimously rejected by Congressional Democrats, were a major contributor — other debts are bipartisan. Remarkably, debt soared in 2020 after Trump approved trillions in emergency pandemic relief spending, which Congress passed with overwhelming support from Democrats and Republicans.

Biden was right when he said the deficit grew every year under Trump. But the deficits in fiscal 2017, 2018, and 2019 under Trump were all below $1 trillion — lower than the deficits in fiscal 2009, 2010, 2011, and 2012 under the Obama-Biden administration. The deficit then roughly tripled to a record level of about $3.1 trillion in pandemic-era fiscal 2020.

Biden and the national debt

In another part of the speech, Biden said, “We’ve reduced the debt by $1.7 billion over the past two years.” The White House corrected the official transcript to read “$1.7 trillion.” instead of betting “$1.7 billion”.

Facts first: That claim is inaccurate even if you ignore Biden’s billion-versus-trillion mix-up. The national debt has continued to rise under Biden. It’s the deficit that’s down about $1.7 trillion — and experts say it’s misleading for Biden to acknowledge that reduction.

Debt has increased by about $3.7 trillion to about $31.5 trillion during Biden’s tenure as president. As Biden did in speeches during the 2022 midterm election, his assertion in that speech conflated debt (the accumulation of federal bonds plus interest owed) with deficit (the one-year difference between spending and revenue).

The deficit has decreased by about $1.7 trillion between fiscal 2020 and fiscal 2022, from about $3.1 trillion to about $1.4 trillion. But as CNN has repeatedly noted, it’s highly questionable how much credit Biden deserves for the downfall — overwhelmingly due to end-Trump-era emergency pandemic spending phasing out as planned. In fact, independent analysts say that Biden’s own new legislation and executive actions have significantly increased current and projected future deficits, and have not reduced those deficits. You can read more here and here.

Medicare and the Inflation Reduction Act

Biden made a confusing comment about prescription drug costs and the anti-inflation bill he signed into law last year.

He said the law “saves seniors big bucks” on prescription drugs, then added that by reducing the cost of those drugs, the law will “lower the federal deficit and save taxpayers hundreds of billions of dollars over time.”

Both claims are fair. But then Biden added that if Republicans repealed that law, they would get rid of “$159,000 a year in savings from lower drug costs.”

Here’s a more complete quote: “Now our Republican friends want to repeal the Inflation Control Act. They would get rid of the savings on prescription drugs that we buy, like Medicare — I mean, we buy from — to — Medicare. And it would eliminate $159,000 a year in savings from lower drug costs today, right now. It just means your tax dollars are saved — you save $159,000 to do what we’re doing right now.

Facts first: The Inflation Mitigation Act does not provide for “$159,000 per year savings in reduced drug costs.” A White House official told CNN Thursday that Biden was trying to say that $159 billion in federal savings over 10 years would be lost if Republicans repealed two key provisions of the Inflation Reduction Act on prescription drugs.

As such, Biden’s figure of “$159,000 per year” significantly underestimated the total savings from those two provisions. (One allows Medicare to negotiate the price of certain prescription drugs. The other requires drug companies to pay Medicare rebates for price increases above the rate of inflation.) But his use of such a modest number may have led some listeners to believe he was talking about huge ones Savings for specific seniors or families than modest savings for the government. And his character was fake, regardless of how it was perceived.

The White House corrected that section of the official transcript of the speech after CNN asked for the “$159,000” figure.

Billionaires and Taxes

Biden repeated an inaccurate figure he used in the Virginia speech in late January. He said of billionaires in the United States, “You know what the average tax they pay is? About 3%.”

Facts first: Once again, Biden’s “3%” claim is wrong. For the third time in less than a month, Biden inaccurately described a found in 2021 by economists in his administration that the top 400 billionaire families paid an average of 8.2% of their income in state individual income taxes between 2010 and 2018; after CNN inquired about Biden’s “3%” claim in the late January speech, the White House published a corrected transcript of that speech to make “8%” instead. Also, it’s important to note that even the figure of 8% holds true deniedas it is an alternative calculation that includes unrealized capital gains not treated as taxable income under federal law.

“Biden’s numbers are way too low,” Howard Gleckman, a senior fellow at think tank Urban Institute’s Urban-Brookings Tax Policy Center, told CNN in late January — though Gleckman also said we don’t know exactly what tax rates billionaires are paying. Gleckman wrote in an email: “In 2019, Berkeley economists Emmanuel Saez and Gabe Zucman estimated that the 400 largest households paid an average effective tax rate of about 23 percent in 2018. They attracted 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 was still way more than 2 or 3 or even 8 percent.”

Biden has cited the 8 percent statistic in various other speeches, but unlike the administrative economists who invented it, he’s not inclined to explain that it doesn’t describe tax rates in a traditional way. And independently, he said “3%” in that speech and the Virginia speech — and “2%” in another speech in January.