President Joe Biden was eager to highlight the rapid rebound from the COVID-19 recession and tout recent progress bringing down inflation during his State of the Union address Tuesday night.
Here’s a look at what Biden said as well as the full picture behind the president’s economic claims.
The Department of the Treasury’s seal outside the Treasury Department building in Washington on May 4, 2021. (AP Photo/Patrick Semansky, File)
Biden touted a $1.7 trillion reduction in the federal deficit during the first two years of his administration as proof of his fiscal responsibility.
But the drop in the deficit over that time largely reflects the fact that Congress did not pass another multi-trillion dollar stimulus bill in 2022, as it did in the previous two years under both Biden and former President Donald Trump.
Biden also blamed Trump for a record $8 trillion increase in the federal debt over his term.
Trump did not, in fact, make any significant cuts to federal spending while in office and passed a tax-cut bill that was expected to add close to $2 trillion the debt over eight years. But Congress also passed trillions of dollars in bipartisan-approved COVID-19 stimulus under Trump, adding to the tab.
A hiring sign is displayed at a retail store in Chicago, Thursday, Jan. 5, 2023. (AP Photo/Nam Y. Huh)
Biden took credit for the 12 million jobs added by the U.S. economy since he took office in January 2021, by far the most added under any single president.
The president attributed that record-breaking stretch to the March 2021 passage of a $1.9 trillion stimulus plan and several other major initiatives to recover from the pandemic-induced recession.
While the Biden administration did add more fuel to the swift rebound from the COVID-19 recession, economists say the U.S. was bound to add millions of jobs during his first two years regardless of the president’s economic package.
The U.S. was still short millions of jobs from its pre-pandemic level in 2021 and the arrival of widely available COVID-19 vaccines early in Biden’s term was key to unlocking a faster recovery.
The economy was also still processing trillions of dollars in stimulus and economic relief from previous bills approved under Trump and near-zero Federal Reserve interest rates.
Inflation and rising costs
People shop at a grocery store in Monterey Park, California, on April 12, 2022. (Photo by Frederic J. BROWN / AFP)
Inflation has fallen sharply and Biden was eager to talk about it.
Price growth fell to 6.5 percent annually in December after peaking at 9.1 percent in June, according to the Labor Department’s consumer price index (CPI), with prices falling 0.1 percent in December alone.
Biden pinned much of the inflation on pandemic-related supply chain snarls and the shocks to energy and food supplies created by the war in Ukraine.
Those are two of the primary causes of inflation of a global increase in inflation, though economists also say some of it is a side effect of pandemic economic stimulus.
The president also correctly noted that inflation has fallen for six straight months and inflation-adjusted wages are rising again. Biden additionally touted a $1.50 decline in gas prices since a peak in 2022, which was sped along by his release of millions of barrels of crude oil from the strategic petroleum reserve.
But just as much of the global inflation surge had little to do with his policies, Biden’s claim of slashing shipping costs by 90 percent through a bipartisan bill overstates his influence over supply chains normalizing.