President Joe Biden announced on April 25 that he would run for reelection in the 2024 campaign. In his video announcement and a speech later that day to a union group, Biden repeated several claims we’ve fact-checked before:
The president claimed Republicans would cut Social Security for seniors, but proposals for potential changes haven’t attracted much congressional support.
Biden was correct in saying the debt had gone up “nearly 40%” under his predecessor, but that leaves a misleading impression. Trillions of it were due to bipartisan pandemic relief legislation, not Republicans acting alone.
Biden’s boast that more jobs were created in two years of his presidency “than any president created in a four-year term,” is correct in raw numbers, but not when looking at the percentage growth.
The president said that “in my first two years in office I’ve lowered the deficit by a record $1.7 trillion,” but most of that reduction was expected as a result of expiring emergency pandemic spending.
Biden said the average tax rate for billionaires is 8%, lower than the rate for schoolteachers or firefighters. That’s based on factoring in gains on unsold stock as income.
He said the U.S. “fell to number 13 in the international ratings” for infrastructure prior to his signing a bipartisan infrastructure law in 2021, but some experts say the ranking underrated the U.S.
In his reelection announcement video, Biden once again raised the possibility that Republicans will cut Social Security retirement benefits, although there seems to be little appetite in Congress for any significant changes.
“MAGA extremists are lining up to take on those bedrock freedoms,” Biden said, referring to Trump’s Make America Great Again movement. “Cutting Social Security that you paid for your entire life, while cutting taxes for the very wealthy.”
Some Republicans have called for changes to Social Security that critics have branded as cuts.
For years, the conservative Republican Study Committee has proposed budgets — including for fiscal year 2023 — that have included gradually increasing the full retirement age to 70 and indexing it after that for life expectancy. (The “full retirement age” — the age at which someone is eligible for full benefit payments — ranges from age 66 to 67, depending on when the beneficiary was born.)
But the RSC proposals have failed over the years to attract enough support.
In his State of the Union speech in February, Biden referenced a plan by Sen. Rick Scott of Florida that the president said would “sunset” Social Security and Medicare. Prior to the 2022 midterm elections, Scott proposed sunsetting all federal programs after five years — unless Congress voted to extend them. Scott’s plan said: “Force Congress to issue a report every year telling the public what they plan to do when Social Security and Medicare go bankrupt.”
As we’ve written before, Scott has said he doesn’t want to end those programs, and he doesn’t know any Republican legislators who do. After the plan was released, Senate Minority Leader Mitch McConnell said sunsetting Social Security and Medicare “would not be a part of our agenda.”
In February, Scott revised the plan to specifically exclude those two programs. “All federal legislation sunsets in 5 years, with specific exceptions of Social Security, Medicare, national security, veterans benefits, and other essential services,” the plan now says.
Former President Donald Trump, who is the leading 2024 Republican presidential candidate, earlier this year said “under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security.” As we recently wrote, Trump did not propose any cuts to Social Security retirement benefits in his four years as president.
Both Parties Share in Debt Increase
In his first speech after his reelection announcement, delivered at North America’s Building Trades Unions Legislative Conference, Biden repeated a misleading claim about the accumulation of debt under Trump. “The last administration alone increased the debt by nearly 40% in four years,” he said. That figure is correct, but trillions of that debt were due to bipartisan actions, namely passing coronavirus relief packages.
The total national debt did go up by about 39% during Trump’s four years, from nearly $20 trillion the day he took office to nearly $27.8 trillion on the day he left. Those figures include money the U.S. owes to itself. We typically use figures for the amount of debt held by the public, which went up by even more — about 50%.
The $7.2 trillion added to the debt held by the public under Trump compares with $8.1 trillion added during the eight years of former President Barack Obama and Vice President Biden.
Trump had promised to reduce the debt, and he did the opposite — with some of the growth directly due to his and Republicans’ actions, such as enacting the 2017 tax cut law. When we wrote about this issue before, Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, told us the tax law alone could have added about $1 trillion to the debt.
But other debt-increasing legislation had the support of Democrats, too, including bipartisan budget bills that increased spending and, notably, the pandemic relief. A ProPublica/Washington Post report estimated the COVID-19 relief spending totaled more than $3 trillion to mitigate the economic and public health impacts of the pandemic.
As he did in his State of the Union address, Biden boasted that he had created more than 12 million new jobs — “more jobs in two years than any president created in a four-year term.” But Biden isn’t accounting for population growth; other presidents have seen a greater percentage increase.
First, it is true that 12 million jobs were created in Biden’s first two years (measuring from January 2021 to January 2023), according to the Bureau of Labor Statistics. That’s an 8.4% increase — which, while impressive, isn’t higher than job growth “in a four-year term” under some past presidents when the job market was a lot smaller.
In Lyndon Johnson’s only full term in office, from January 1965 to January 1969, the U.S. economy added 9.9 million jobs — a 16.5% job growth that is nearly double the rate in Biden’s first two years.
In Jimmy Carter’s only four years in office, from January 1977 to January 1981, the U.S. added 10.3 million jobs. That’s an increase of 12.8%.
Under Bill Clinton, the U.S. also saw job growth exceed 8.4% in each of his two terms.
In Clinton’s first term, from January 1993 through January 1997, the U.S. added 11.6 million jobs, an increase of 10.5%, and then the next four years brought an additional 11.3 million jobs, an increase of 9.3%.
In total, the U.S. added 22.9 million jobs in Clinton’s two terms, an increase of 20.9%, from 109.8 million jobs in January 1993 to 132.7 million in January 2001.
Misleading Deficit Boast
As he has in the past, Biden boasted that in his first two years in office, he “lowered the deficit by a record $1.7 trillion.” But as we have written, most of that was due to expiring emergency pandemic spending and, according to the Committee for a Responsible Federal Budget, deficits would have dropped even more if not for policies enacted by the Biden administration.
“Matter of fact, in my first two years in office I’ve lowered the deficit by a record $1.7 trillion,” Biden said at the trade unions conference. “Lowered the deficit. The debt.”
Some may have thought that Biden’s last remark was meant to correct that he was talking about the debt, not deficits. If so, that would be very wrong. The public debt, which excludes money the government owes to itself, increased by about $3 trillion in Biden’s first two years in office, from $21.6 trillion to $24.6 trillion.
And debt would continue to grow over the next 10 years if Biden’s proposed fiscal year 2024 budget were enacted. According to a CRFB analysis, if that budget were enacted, debt would rise from $24.6 trillion today to $43.6 trillion by the end of 2033 (and debt as a percentage of GDP would rise from 97% to 110%).
But assuming that Biden was talking about the deficit falling by $1.7 trillion in his first two years in office — as he said initially — that figure is roughly accurate. The FY 2020 deficit was $3.13 trillion and the FY 2022 deficit was $1.375 trillion. But the deficit in FY 2022 is still nearly 41% higher than it was in FY 2019, before the pandemic hit.
Where Biden’s comment is misleading is in claiming the he lowered that deficit.
As we wrote last April, most of the reduction in deficits was expected as a result of expiring emergency pandemic spending. Deficits did fall, but by about $840 billion less than expected in FY 2021 and 2022, according to the nonpartisan Congressional Budget Office.
While Biden attributes the falling deficits to growth in the economy — and commensurate growth in revenues — that resulted from his policies, the CRFB says that doesn’t add up.
“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 a blog post on Oct. 21, at the end of the 2022 fiscal year. “In fact, the President’s actions to date have increased deficits by $4.8 trillion through 2031.”
Billionaire Tax Rate
Biden said that the average tax rate for billionaires is 8%, adding that he wants a “minimum tax for billionaires.” What voters may not know is that Biden’s 8% is calculated by including wealthy families’ gains on unsold stock as income.
“No billionaire should be paying a lower tax rate than a construction worker, a schoolteacher, a firefighter, a cop, a nurse,” Biden said.
As we’ve explained before, Biden is referring to a White House economic analysis that estimated the average federal individual income tax rate for the 400 wealthiest families was 8.2%, if including their earnings on unsold stock. Under the current tax system, earnings on assets, such as stock, are not taxed until that asset is sold. The earnings are considered “unrealized gains” until they’re sold.
If such assets are held and passed on after death, the value is adjusted to the fair market value at the time of the inheritance under what’s called stepped-up basis. That means all of the gains earned up until the inheritance would never be taxed.
Erica York, a senior economist and research manager at the Tax Foundation, told us when we wrote about Biden’s claim in February that one issue with wealthy families is that they could “purchase assets that appreciate (increase in value), and then borrow money against their assets to consume their wealth without paying tax.” Then, the assets can be passed on to heirs through inheritance and the gains up until that point aren’t taxed. She referred to the strategy as “buy, borrow, die.”
Biden aims to change that through a billionaire minimum tax to ensure those worth over $100 million pay at least 20% in federal income taxes, as calculated on both standard income and unrealized gains combined.
So, do many billionaires pay lower tax rates than schoolteachers and other middle-income-sounding jobs? “Yes, if you count the unrealized gains, which we don’t normally count” for federal income tax purposes, Steven M. Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center, told us.
To be sure, when looking only at income under the current tax system, the top-earning taxpayers, on average, pay higher tax rates than those in the income groups below them.
Voters can make up their own minds about whether they support Biden’s proposal to start taxing unrealized gains for people worth more than $100 million (not just billionaires), but they need a lot more explanation than what’s in the president’s talking point.
U.S. Infrastructure Ranked
Touting the bipartisan infrastructure law he signed in November 2021 — which included $550 billion in new infrastructure spending — Biden once again justified the effort by citing an international infrastructure ranking from a report that some experts have questioned.
“Can you believe we used to have the best infrastructure in the world?” Biden said. “We were rated number one. We fell to number 13 in the international ratings. Thirteen.”
Biden has cited this ranking in each of the last two State of the Union addresses, but as we wrote after both of those speeches, the most recent ranking doesn’t look so bad when comparing the U.S. to other large countries.
His claim is based on a 2019 Global Competitiveness Report by the World Economic Forum, in which the U.S. overall was ranked second among 141 economies, but 13th in infrastructure.
But 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.
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