More stories

  • in

    Fact-Checking Biden’s State of the Union Address

    The president’s speech contained no outright falsehoods, but at times omitted crucial context or exaggerated the facts.WASHINGTON — President Biden praised the economy as well as his legislative accomplishments and record on the world stage in his State of the Union address on Tuesday night.Mr. Biden’s speech contained no outright falsehoods, but at times omitted crucial context or exaggerated the facts. Here’s a fact check.What WAS Said“I stand here tonight, after we’ve created, with the help of many people in this room, 12 million new jobs — more jobs created in two years than any president has created in four years.”This needs context. The economy added 12.1 million jobs‌ ‌between January 2021, the month‌ when‌ Mr. Biden took office, and this January. By raw numbers, that is indeed a larger increase in new jobs over two years than the number added over other presidents’ full four-year terms since at least 1945. But by percentage, the job growth in Mr. Biden’s first two years still lags behind that of his predecessors’ full terms.Under Mr. Biden, jobs have increased by 8.5 percent since his term began. That jump is less than that in President Barack Obama’s first term (8.6 percent), President Bill Clinton’s first term (10.5 percent), President Ronald Reagan’s second term (11.2 percent) and President Jimmy Carter’s four years in office (12.8 percent).Mr. Biden is, of course, comparing his first two years in office with the entire term or presidencies of his predecessors, so the comparison is not equivalent. Moreover, Mr. Biden’s first two years in office followed historic job losses wrought by the coronavirus pandemic. Most important, presidents are not singularly responsible for the state of the economy. — Linda QiuWhat WAS Said“For too many decades, we imported products and exported jobs. Now, thanks to what you’ve all done, we’re exporting American products and creating American jobs.”This is misleading. Mr. Biden’s statement gives the impression that a decades-old trend has reversed, but the data tells a different story. American exports reached a new high in 2022, with exports of goods alone topping $2 trillion. But the United States also imported a record high last year, $3.3 trillion in goods — countering the notion that imports have slowed. As a result, the United States also recorded the highest ever trade deficit since 1970 of $950 billion, and a trade deficit in goods of $1.1 trillion. — Linda QiuWhat WAS Said“Inflation has been a global problem because the pandemic disrupted our supply chains and Putin’s unfair and brutal war in Ukraine disrupted energy supplies as well as food supplies.”This needs context. It is accurate that inflation has been global, and that supply chain issues tied to the pandemic have been a major driver of price increases. It is also true that food and energy disruptions tied to Russia’s invasion of Ukraine exacerbated it. But those factors did not spur inflation on their own: Supply chains became clogged in the first place partly because American demand for goods was abnormally strong during the pandemic.Biden’s State of the Union AddressChallenging the G.O.P.: In the first State of the Union speech of a new era of divided government, President Biden called on Republicans to work with him to “finish the job” of repairing the unsettled economy.State of Uncertainty: Mr. Biden used his speech to portray the United States as a country in recovery. But what he did not emphasize was that America also faces a lot of uncertainty in 2023.Foreign Policy: Mr. Biden spends his days confronting Russia and China. So it was especially striking that in his address, he chose to spend relatively little time on America’s global role.A Tense Exchange: Before the speech, Senator Mitt Romney admonished Representative George Santos, a fellow Republican, telling him he “shouldn’t have been there.”That surge in demand came as stuck-at-home consumers shifted their spending away from services and toward things like new furniture. Their spending was also fueled partly by stimulus checks and other pandemic aid. Several studies by economists at the Federal Reserve have found that government spending contributed to some, but far from all, of the inflation. — Jeanna SmialekWhat WAS Said“Food inflation is coming down.”True. Food inflation is beginning to slow, though it remains very rapid. Compared with a year ago, food prices are 10.4 percent higher. But monthly food price increases have been slowing steadily in recent months, coming down from a very swift rate in May 2022.Of course, the current situation does not feel great to many consumers: Food prices are still climbing from already-high levels. And some specific food products are much more expensive than last year. Eggs, in particular, have been a pain point for consumers in recent months. — Jeanna SmialekWhat WAS Said“Inflation has fallen every month for the last six months, while take-home pay has gone up.”This needs context. It is true that inflation has slowed for the past six months: That means that prices are still increasing, but they are doing so more gradually. The Consumer Price Index ticked up by 6.5 percent in the year through December, which is notably slower than the 9 percent peak in June. That pace is still much more rapid than the roughly 2 percent that was typical before the pandemic.It is also true that wages are climbing sharply compared with the pace that would be normal. But for much of 2021 and 2022, wage gains struggled to keep up with rapid price increases. That has recently begun to change: Average hourly earnings increases exceeded consumer price increases on a monthly basis in both November and December 2022. — Jeanna Smialek.css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.What WAS Said“We’re finally giving Medicare the power to negotiate drug prices.”This needs context. The Inflation Reduction Act, which Mr. Biden signed into law in August, does fulfill Democrats’ long-held goal of empowering Medicare to negotiate the price of prescription drugs directly with pharmaceutical makers. But the law has limits. The negotiation provisions do not kick in until 2026, when the federal government may begin negotiating the price of up to 10 medicines. The number of drugs subject to negotiation will rise over time. — Sheryl Gay StolbergWhat WAS Said“In the last two years, my administration has cut the deficit by more than $1.7 trillion — the largest deficit reduction in American history.”This needs context. The federal deficit did decrease by $1.7 trillion, from $3.1 trillion in the 2020 fiscal year to $1.4 trillion in the 2022 fiscal year, though Mr. Biden’s fiscal policies are not the sole factor.In fact, much of that decline can be attributed to the expiration of pandemic-era spending, according to the Committee for a Responsible Federal Budget, which advocates lower levels of spending. In February 2021, before the Biden administration enacted any fiscal legislation, the Congressional Budget Office estimated that the deficit would have reached $1.1 trillion in the 2022 fiscal year, less than what ended up happening.Coronavirus stimulus funding from 2021 added nearly $1.9 trillion to the deficit over 10 years, the budget office estimated. The budget agency also estimated that the infrastructure package added $256 billion to the deficit, though supporters disagreed with the analysis. The Inflation Reduction Act, which was the only significant piece of legislation to reduce the deficit, trimmed it by $238 billion over the next 10 years. — Linda QiuWhat WAS Said“Nearly 25 percent of the entire national debt that took over 200 years to accumulate was added by just one administration alone, the last one.”This needs context. Mr. Biden is correct that a quarter of the national debt was accumulated over the four years Mr. Trump was in office. But the former president did not unilaterally add to that amount. In fact, two major factors driving that increase were mandatory spending levels set long before Mr. Trump took office and bipartisan spending bills that were passed to address the pandemic.From the 2018 to 2021 fiscal years, the government collected $14.3 trillion in revenue, and spent $21.9 trillion, according to data compiled by the Congressional Budget Office. In that time, mandatory spending on programs such as Social Security and Medicare totaled $14.7 trillion alone. Discretionary spending totaled about $5.8 trillion.The budget estimated that Mr. Trump’s tax cuts — which passed in December 2017 with no Democrats in support — added roughly another $1 trillion to the federal deficit from 2018 to 2021, even after factoring in economic growth spurred by the tax cuts.But other drivers of the deficit include several sweeping measures that had bipartisan approval. The first coronavirus stimulus package, which received near unanimous support in Congress, added $2 trillion to the deficit over the next two fiscal years. Three additional spending measures contending with Covid-19 and its economic ramifications added another $1.4 trillion. — Linda QiuWhat WAS Said“Some Republicans want Medicare and Social Security to sunset. I’m not saying it’s a majority.”This needs context. President Biden implied that the Republicans who wanted to allow Social Security and Medicare to sunset were tying those demands to the fight over raising the nation’s debt limit.It is true that a couple of Republicans have suggested allowing those entitlement programs to sunset as mandatory spending, instead bringing them up for regular renewal. But Republicans have recently distanced themselves from such efforts. Speaker Kevin McCarthy, Republican of California, has said that cuts to Social Security and Medicare are “off the table” in talks over raising the debt ceiling, which Congress must vote to do in the coming month or risk a default on the government’s bills. Likewise, President Donald J. Trump has warned Republicans to leave the programs alone in the negotiations. Mr. Biden, nodding to lawmakers responding to his speech, acknowledged that it seemed that cuts to the programs were “off the books now.” — Jeanna SmialekWhat WAS Said“While the virus is not gone, thanks to the resilience of the American people and the ingenuity of medicine, we have broken the Covid grip on us. Covid deaths are down by 90 percent.”This needs context. On average, about 450 people in the United States are dying each day of Covid-19, according to a New York Times database. That number is way down from the roughly 3,200 Americans who were dying each day in early 2021, when the Omicron variant was ripping through the country. But the current daily average of Covid-19 deaths is higher than it was in December 2022, when roughly 250 Americans were losing their lives each day to the virus. — Sheryl Gay StolbergWhat WAS Said“We united NATO. We built a global coalition.”True. In response to Russia’s invasion of Ukraine in February 2022, President Biden led a huge political, economic and military response that has involved dozens of countries. Surprising many experts who predicted that the United States’ European allies would argue over strategy and lose their resolve, the 30-member North Atlantic Treaty Organization has shown a unity unseen since the aftermath of the Sept. 11, 2001, attacks and, a year after the Russian invasion, continues to supply vast amounts of weapons to Ukraine.That unity has not been perfect: NATO leaders have argued at times, including their recent tussle over whether and how to supply modern tanks to Ukraine. But many analysts believe it has surprised President Vladimir V. Putin of Russia, who did not anticipate such a strong degree of Western resolve.President Biden also successfully rallied dozens of nations beyond NATO to join in economic sanctions against Moscow, including Asian countries like South Korea and Japan. That coalition excludes major nations like India and China, which are supporting the Kremlin’s war machine through major purchases of Russian oil. But it remains among the broadest coalitions the United States has led against an adversary. — Michael CrowleyWhat WAS Said“But in the past two years, democracies have become stronger, not weaker. Autocracy has grown weaker, not stronger.”This lacks evidence. Experts say that President Biden took office after years of global gains for autocracy and deep problems for democracies — as illustrated by the Capitol riot on Jan. 6, 2021. According to the nonprofit group Freedom House, in every region of the world “democracy is under attack by populist leaders and groups that reject pluralism and demand unchecked power.”It is hard to say whether Mr. Biden has changed the situation. He has made the defense of democracies a core theme of his presidency and held a White House democracy summit in December 2021. He has worked to contain two major autocratic powers, building a coalition against Russia in defense of Ukraine — which has weakened its economy and isolated it diplomatically — and rallied allies to contest China’s political influence and technological gains. American voters rejected many election conspiracy theorists in the midterm elections last year.But Russia and, especially, China retain considerable foreign political influence. Brazil, the largest country in Latin America, had a far-right riot in the heart of its government last month. Italy elected a prime minister whose party has fascist roots. Huge crowds in Israel are protesting new right-wing government policies that opponents call an assault on democracy itself. Last February, The Economist magazine’s annual democracy index found that “global democracy continued its precipitous decline in 2021.” Mr. Biden’s rosier view is difficult to substantiate. — Michael Crowley More

  • in

    Fact-Checking the Misleading Claim About 87,000 Tax Agents

    The claim, which has been debunked numerous times, has resurged ahead of the midterm elections. Here’s why it’s still wrong.As the midterm campaigns come to a close, Republican lawmakers are seizing on misleading claims warning that Democrats are recruiting an army of tax auditors, finding new resonance in an assertion debunked months ago.The assertion began to circulate when President Biden first outlined a wide-ranging social spending plan last fall. A whittled-down version of that plan, known as the Inflation Reduction Act, was enacted this summer, fueling a new wave of attacks that have gained momentum as the elections neared.That law provides the Internal Revenue Service with nearly $80 billion in funding, including $45.6 billion for enforcement activities. But the suggestion that this would amount to 87,000 additional tax collectors scrutinizing the financial filings of middle-class Americans is wrong.Here’s a fact check.What Was Said“When House Republicans earn the majority, we will STOP Biden’s army of 87,000 IRS agents hired to audit hardworking American families and small businesses.”— Representative Elise Stefanik, Republican of New York, in a tweet in November.“Senate Democrats could have secured the border to protect you and your family. They didn’t. Instead, they hired 87,000 IRS agents to audit you.”— Senate Republicans’ official Twitter account in November.The State of the 2022 Midterm ElectionsElection Day is Tuesday, Nov. 8.House Democrats: Several moderates elected in 2018 in conservative-leaning districts are at risk of being swept out. That could cost the Democrats their House majority.A Key Constituency: A caricature of the suburban female voter looms large in American politics. But in battleground regions, many voters don’t fit the stereotype.Crime: In the final stretch of the campaigns, politicians are vowing to crack down on crime. But the offices they are running for generally have little power to make a difference.Abortion: The fall of Roe v. Wade seemed to offer Democrats a way of energizing voters and holding ground. Now, many worry that focusing on abortion won’t be enough to carry them to victory.“$80 Billion: Increased IRS Funding. 87,000: Full-Time IRS Agents Added Using $80 Billion in Funding. 710,000 New Audits on Taxpayers Making $75,000 or Less.”— a graphic Tiffany Smiley, the Republican candidate for Senate in Washington, shared on Twitter in October.These claims are misleading. The 87,000 figure refers to a May 2021 estimate from the Treasury Department of the total number of employees — not just auditors — the I.R.S. proposes to hire over the next 10 years with funding requested by Mr. Biden. And while the I.R.S. plans to conduct more audits, wealthy Americans and businesses will bear the brunt of that scrutiny, not, as Republicans have suggested, working families.Among the I.R.S.’s work force of about 79,000 employees, 10,000 are actually agents. (Of those, 8,000 are revenue agents who audit tax filings and 2,000 are special agents who investigate potential tax crimes.) In fact, the two most common I.R.S. jobs have little to do with tax auditing or investigations: about 13,000 are customer service representatives who answer taxpayer phone calls and 10,000 are seasonal employees who file mail or transcribe data. Other jobs include lawyers, examiners, technicians and appeals officers.The additional funding for to the I.R.S. will allow the agency to modernize its infrastructure and replace an aging work force, and it is unclear just how many full-time employees or agents will be hired in the next decade, Treasury Department officials said. The majority of those new employees will replace the 52,000 expected to retire in the near future, the officials said, and many will focus on customer service and updating the agency’s technology infrastructure — not investigating the finances of ordinary Americans.In other words, the funding will enable the I.R.S. to increase its work force over the next 10 years to 113,000 employees. That is about the same number of workers it employed annually in the early 1990s.In a September speech, Janet Yellen, the Treasury secretary, outlined some of that hiring — an additional 5,000 customer service representatives and fully staffing the agency’s taxpayer assistance centers — and committed to not raise audit rates for households making under $400,000 a year.Using historical audit rates, House Republicans estimated this summer that the additional funding will correspond to 710,000 new audits for taxpayers making $75,000 or less — as Ms. Smiley, the Republican candidate for Senate in Washington State, tweeted. But those calculations ignore the proportional effect on each income bracket.In the past decade, tax audit rates have fallen most starkly for higher income earners, which the I.R.S. attributes to diminished resources and therefore its inability to retain specialized auditors needed to examine the filings of the wealthy.Increasing funding for the I.R.S., the nonpartisan Congressional Budget Office said in September 2021, would address those needs and result in increased audit rates for everyone, particularly for high-income earners.The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data when Republicans started making these claims, audits decreased to 370,000, or about 0.2 percent.The budget office estimated increasing I.R.S. funding would return enforcement to its 2010 levels. Doing so would result in about 1.2 million more audits; of those, 583,000 would target people making less than $75,000.But that is because a vast majority of tax filers — about 70 percent — make under that threshold. Looking at what fraction of returns are examined by income group, rather than the sheer number, shows that wealthier taxpayers would have a better chance of being audited than lower-income earners under the law.Under 2010 levels of enforcement, about 0.5 percent of returns reporting between $1 and $75,000 in income would be audited, as would 1 percent of those with more than $75,000 in income. In comparison, those rates were 0.3 percent and 0.1 percent in 2018. For those making more than $10 million, more than 20 percent of returns would be examined under 2010 levels, compared with 5.3 percent in 2018.It is also worth noting that of those 710,000 additional audits cited by Republicans, about 127,000 would target those with “no positive income,” such as those who report negative business income or capital losses. Including these filers with lower-income taxpayers is also misleading, as they actually receive more audit scrutiny than any other income group outside of those making over $5 million annually.In a statement in support of the law released this summer, three former I.R.S. commissioners appointed by Republican and Democratic presidents disputed claims about increased scrutiny. The law would add “the capacity to enforce the tax laws against sophisticated taxpayers who today evade their tax obligations freely,” they said, “because they know that the I.R.S. lacks the tools it needs to pursue them.” More