Political | Process

Speaking amid growing levels of concern about inflation, Biden painted a hopeful picture of what his spending proposals could do to lower prices, despite warnings from many economists that his plan would do the opposite.

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Job Creation:

• Biden has previously suggested the economic growth that occurred on his watch has been historic, a misleading claim that papers over the unprecedented circumstances surrounding the employment picture before and after he took office.

• In 2020, the economy lost roughly 9.4 million jobs amid the effects of the pandemic, according to the Bureau of Labor Statistics .

• While the economy added 6.5 million jobs in 2021, not all of the jobs that existed during the Trump administration have returned.

• Biden is not overseeing a historically healthy unemployment rate, either.

• The unemployment rate in January 2022 was 4%, according to BLS .

• But in January 2020, under former President Donald Trump, the unemployment rate was 3.4%.

Inflation:

• Biden’s claim that experts believe his spending proposal would lower inflation is based on a letter that Nobel laureates signed in September, before lawmakers made significant changes to the proposal.

• “We believe that key components of this broader agenda are critical — including tax reforms that make our tax system more equitable and that enable our system to raise the additional funds required to facilitate necessary public investments and achieve our collective goals,” the economists wrote in the letter at the time.

• However, in the weeks after the letter was written, Democratic lawmakers scrapped those tax increases in the bill for political reasons, meaning most of the programs in the bill were no longer paid for.

• A number of other economists, even Democratic ones, have said the Build Back Better Act would worsen inflation and raise the deficit.

• By November, with a different version of the bill then under consideration, experts were predicting the proposal would slow economic growth in the long term.

• The Penn-Wharton Budget Model from the University of Pennsylvania found the new version of the bill, which the Nobel laureates did not assess, would lower U.S. gross domestic product by 2050, even after adjusting for the positive effects of Biden’s programs.

Tax Cut Plan:

• Democrats have frequently characterized the Tax Cuts and Jobs Act as a law that exclusively favored the wealthy, despite the fact that the Trump-era policy lowered income tax rates across the board.

• The Tax Policy Center found that roughly 65% of all people received a tax cut from the law in 2018.

• An even larger share of middle-income earners enjoyed a tax cut, according to the analysis, with 82% seeing an average of $1,050 cut from their tax bill.

• Then-Secretary Steve Mnuchin said in 2018 the law would give 90% a boost to their take-home pay.