Fact-Checking Biden’s Recent Economic Talking Points

Under President Biden, the economy has grown 3.1 percent from the end of 2022 to the end of 2023.

As he seeks re-election, President Biden has been trying to sell voters on his approach to the economy and draw a contrast with his likely 2024 opponent, former President Donald J. Trump.

During Mr. Biden’s administration, the economy has grown 3.1 percent from the end of 2022 to the end of 2023. The rate of inflation has dropped considerably since its summer 2022 peak (although it dipped less than economists had expected in January). And job gains continue.

The economy grew 3.1 percent from the end of 2022 to the end of 2023.

At recent public and campaign events, though, Mr. Biden has made some misleading statements about the economy, jobs and taxes.

Here’s a fact check.

WHAT WAS SAID

“We now have a thousand billionaires in America. You know what their average tax rate is — federal tax? 8.2 percent.”

— during a campaign event in late January

This is misleading. Mr. Biden was referring to a White House study that sought to use a “more comprehensive measure of income” than the way income is currently assessed. In other words, it offered a hypothetical on what the rate would be if the law was different.

More specifically, the study, released in 2021, included gains made in unsold stocks. Under the law, those gains are not taxed until the asset is sold. The report estimated the average federal income tax rate paid by the 400 wealthiest families in the United States to be 8.2 percent.

While there is debate about whether the law should factor in that type of income, presenting that 8.2 figure with no explanation leaves room for mistaken impressions, said Garrett Watson, a senior policy analyst at the right-leaning Tax Foundation.

For example, the public may then wrongly compare that 8.2 percent to other average federal income tax rates. To draw a more accurate comparison with, say, the tax rate of someone with a middle income, the same exercise would need to be done to also incorporate their unrealized gains, such as from increased value in investment accounts or homes, Mr. Watson said.

(The Tax Foundation has also argued that the White House analysis should also account for corporate income taxes, since many business founders may hold onto stock in their companies but the companies are taxed on their profits every year.)

Under the law, the top 1 percent of earners in the United States are currently estimated to pay an average federal income tax rate of more than 20 percent, according to an analysis by the Treasury Department in November. An I.R.S. report that specifically looked at the top 400 individual income tax returns found that those taxpayers paid an average income tax rate of about 23 percent in 2014.

The White House defended Mr. Biden’s use of the 8.2 percent figure.

“Most Americans agree that when a billionaire’s wealth increases by millions of dollars in a year, that is income,” Michael Kikukawa, a White House spokesman said in a statement. “And economists across the political spectrum, including the American Enterprise Institute and the nonpartisan congressional Joint Committee on Taxation, agree that a person’s income is equal to the change in their net worth. By quantifying the income the wealthiest Americans receive from unrealized capital gains, the CEA-OMB analysis applies this standard definition of effective tax rates, adding to our understanding of just how low billionaires’ tax rates are.”

WHAT WAS SAID

“I signed the CHIPS and Science Act, which attracted $640 billion in private companies’ investments that are building factories, creating jobs in America again.”

— during an event this month

False. Estimates of private investments spurred by the CHIPS and Science Act, which gave billions to the chip industry, do not come in at $640 billion. By some measures, it is a fraction of that: One estimate by the Semiconductor Industry Association puts the figure at about $220 billion.

Mr. Biden signed the legislation in August 2022, which included some $52 billion in subsidies and tax credits for manufacturers of semiconductors — chips used in electronics — to open or expand in the United States. It also heavily invested in research into artificial intelligence, quantum computing and other technologies.

Mr. Biden was referring to a White House estimate of private investments made in various industries over the course of his presidency, not only in response to the CHIPS legislation but also as a result of the Inflation Reduction Act and the $1 trillion bipartisan infrastructure law.

That estimate tabulated that there had been $649 billion worth of private investments in multiple 21st-century industries, including clean energy and electric vehicles. The White House says it arrived at the figure by calculating projects announced in public sources.

WHAT WAS SAID

“And let’s get something straight. Trump talks about putting checks in pockets. But in 2021, as soon as I came to office, I was the guy who sent every one of you those $1,400 checks.”

— during a campaign event in late January

This needs context. Both Mr. Biden and Mr. Trump signed legislation providing stimulus payments to Americans as the United States grappled with the coronavirus.

In March 2020, Mr. Trump signed a $2 trillion measure known as the CARES Act, which provided payments of $1,200 per person and an additional $500 per child. Months later, in December 2020, Mr. Trump signed a stimulus package that included $600 checks and an additional $600 per child. (He had pushed for the second round of payments to be increased to $2,000.)

Two months after assuming office, in March 2021, Mr. Biden signed a $1.9 trillion economic relief package, called the American Rescue Plan Act, which provided payments of $1,400 per person and another $1,400 per child.

WHAT WAS SAID

“The only president other than Donald Trump that lost jobs during an administration was Herbert Hoover.”

— during a campaign event in late January

This needs context. Mr. Biden is correct that Mr. Trump ended his term with a negative jobs record — the only president to do so after World War II — but omits that this occurred because of the coronavirus pandemic.

Using January 2017 as a base line, when Mr. Trump was inaugurated, there were 145.6 million jobs, according to Bureau of Labor Statistics data. When he left in January 2021, there were 142.9 million jobs. That is a decline of 2.7 million jobs, or 1.9 percent.

But before the pandemic took hold, Mr. Trump had a positive jobs record. Jobs had increased from 145.6 million jobs in January 2017 to 152 million jobs in January 2020 — a rise of 6.4 million jobs, or 4.4 percent.

About half of the nearly 22 million jobs lost in early 2020 were recovered before Mr. Trump left office.

The same data from the Bureau of Labor Statistics only goes back to 1939, several years after Mr. Hoover departed the White House in 1933. But Mr. Hoover was president at the start of the Great Depression and when he left office, nearly a quarter of the labor force was unemployed.

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