President Joe Biden delivered a speech on Friday to tout his administration’s efforts to boost the economy and create jobs amid the ongoing coronavirus pandemic and recession. However, a closer look at his remarks reveals that he made several false or misleading claims about his economic policies and achievements, drawing criticism from fact-checkers and experts.
One of the most glaring errors was Biden’s claim that he has cut the federal debt by $1.7 trillion over his first two fiscal years in office. This is simply not true, as the federal debt has increased by more than $5.7 trillion during his presidency so far, according to the Treasury Department1. The president confused the debt, which is the accumulation of federal borrowing plus interest owed, with the deficit, which is the one-year difference between spending and revenues. The deficit did fall by $1.7 trillion over Biden’s first two fiscal years, but this was largely due to a surge in tax revenues as the economy recovered from the pandemic-induced slump2.
Another false claim was Biden’s attribution of the deficit reduction to his 15% corporate minimum tax on certain large profitable corporations, which he said made them pay 15% in taxes instead of zero. However, this tax policy did not take effect until January 1, 2023, so it could not possibly have been responsible for the budget situation in fiscal 2021 and 2022. Moreover, the tax policy is expected to raise only about $300 billion over 10 years, which is a fraction of the $4.5 trillion spending package that Biden has proposed4.
Biden also misled the public by saying that he has presided over an “actual surplus”. There is no such surplus, as the federal government continues to run a budget deficit well over $1 trillion5. The president may have been referring to how his Inflation Reduction Act of 2022, which included some of his spending and tax proposals, is projected to reduce the deficit by about $200 billion over 10 years. However, this is a dubious claim, as it relies on optimistic assumptions about economic growth and inflation.
In addition to these false or misleading claims, Biden used outdated figures to boast of setting record lows in the unemployment rates for African Americans, Hispanics and people with disabilities. While these rates did hit record lows earlier in his presidency, they have all since increased to non-record levels – and are now higher than they were during parts of Donald Trump’s presidency.
Biden’s economic blunders have raised questions about his credibility and competence as he faces multiple challenges at home and abroad. His approval rating has fallen to its lowest point since he took office, and his agenda faces resistance from both Republicans and some moderate Democrats in Congress. As he seeks to persuade the public and lawmakers to support his vision for the economy, he will need to be more careful with his facts and figures.