The Biden administration has rapidly built a remarkable record of ridiculous economic claims, misrepresentations, and worse.
A recounting of President Biden’s economic falsehoods.
T he recent White House budget proposal was an exercise in misdirection and spin. The budget document reaffirmed the president’s $2.4 trillion Build Back Better proposal, but simply left its massive cost out of the tax-and-spending tables. To make matters more confusing, the other tax-hike proposals that did appear in the budget were scored under a baseline that assumes Build Back Better has already been enacted.
Such economic sophistry has become a trend under President Biden.
White House economic spin is as old as the modern presidency. George W. Bush and Donald Trump portrayed their tax cuts as the most revolutionary economic growth engines in modern history. Bill Clinton took credit for balanced budgets and a late-1990s economic boom that were almost totally unrelated to presidential policies. Barack Obama spun a far-weaker-than-expected recovery from his inherited recession as a magical triumph of economic management.
And now, in just 14 months, the Biden administration has rapidly built a remarkable record of ridiculous economic claims, misrepresentations, and worse. This is especially notable following a campaign in which Joe Biden presented himself as the more professional, level-headed, serious alternative to Donald Trump.
When the American Rescue Plan (ARP) was unveiled a year ago, President Biden asserted that “according to Moody’s, for example, by the end of this year, this law alone will create 7 million new jobs. Seven million.” Yet Moody’s made no such claim. Mark Zandi, the report’s chief author, specified in his projection (and again in response to the White House) that ARP would create 4 million jobs through 2021, on top of the baseline 3 million that would be created even without the law. Yet President Biden continued to assert the false 7 million figure.
That is, until April, when the president upped the ante with a ten-year Moody’s figure, claiming that “independent analysis shows that if we pass this plan, the economy will create 19 million jobs — good jobs, blue-collar jobs, jobs that pay well.” Shortly thereafter, National Economic Council director Brian Deese told Fox News Sunday that “Moody’s suggests it would create 19 million jobs,” while Transportation Secretary Pete Buttigieg repeated that figure afterward on Meet The Press. Once again, they were wildly misrepresenting a Moody’s report that actually predicted just 2.7 million jobs over the decade — 86 percent fewer than the administration’s claim. The other 16 million projected jobs represented the baseline job growth.
How absurd was the claim of adding 19 million new jobs from this bill? With only 7.2 million adults projected to be unemployed in 2030 according to the Congressional Budget Office, the president had essentially promised to reduce the unemployment rate to zero and then provide infrastructure jobs to an additional 12 million seniors, college students, and other people who are not even in the labor force. Back when I was the chief economist to a U.S. senator, I would have been fired for passing such preposterous misinformation to my boss for public use.
And yet that was not even the most ridiculous White House legislative claim. As Build Back Better (BBB) legislation was sinking in the Senate under the weight of trillions in new spending, President Biden invented a novel defense. He tweeted out that “My Build Back Better Agenda costs zero dollars.” He later clarified: “We talk about price tags. It is zero price tag on the debt . . . we’re going to pay for everything we spend.” Even if the trillions in proposed new spending were fully matched by new taxes — which is clearly not the case even if allowing the bill’s gimmicky fake expiration dates that lawmakers will never allow to happen — that would not make it free. Saving $20,000 to spend on a nice vacation may not add to my personal debt, but the vacation is obviously not “free.” Nor would taxpayers facing enormous new taxes consider Build Back Better “free.”
Speaking of taxes, the president famously pledged to not raise taxes on household earning less than $400,000. In reality, while these families would not directly send the IRS a larger check, the president’s proposed corporate tax hikes would be passed along to families through lower wages, higher prices, and smaller investment returns. The left-leaning Tax Policy Center calculates that “including corporate tax increases . . . three-quarters of middle-income households would face a tax increase averaging about $300” from the Biden tax proposals.
We cannot also forget the president taking advantage of the general popularity of “infrastructure” plans to redefine the term as any program for which Democrats want to spend money. The President’s Council of Economic Advisors declared home health care for seniors to be “infrastructure.” The White House also included in its infrastructure umbrella proposals such as pre-K, paid family leave, college student aid, nutrition aid, child tax credits, and Obamacare expansions. This assault on the English language was repeated by Democratic lawmakers, but roundly mocked outside the progressive echo chamber.
Most recently, the president has begun taking credit for a scheduled $1 trillion decline in the budget deficit in 2022, a decline that took place automatically because of the scheduled expiration of the 2020 pandemic spending. In fact, the president’s $1.9 trillion American Rescue Plan slowed down what would have otherwise been even faster deficit reduction, and that was before the president tried to deepen the red ink with his Build Back Better proposal. And while this year’s $1.4 trillion budget deficit is below the staggering $3 trillion pandemic peak of 2020, it remains 44 percent above the $984 billion deficit President Trump oversaw in 2019 immediately before the pandemic, which is the more relevant (non-pandemic) comparison.
Despite this higher budget deficit, the president recently tweeted that “after my predecessor’s fiscal mismanagement, we’re reducing the Trump deficits and returning our fiscal house to order,” an ironic claim as so much of the 2020 “Trump deficit” was driven by policies such as family tax rebates, child tax credit expansions, and unemployment bonuses drafted by congressional Democrats and endorsed by then-candidate Biden.
The White House also brags about “the largest yearly job growth in U.S. history” last year. Given that the government had essentially ordered businesses and jobs to shut down, this is like turning a light switch off and then back on and bragging that you’ve discovered electricity.
The administration’s claims about the economy have also infected the inflation debate. For nearly a year the White House dismissed inflation concerns, including mocking Lawrence Summers as “flat-out wrong” for warning against too large a stimulus bill. Then last summer, the White House offered up a punch line for all but its most partisan partisans releasing a video bragging that “the cost of a 4th of July cookout in 2021 is down $0.16 from last year.” I wonder if there will be a sequel this year.
Eventually the White House finally took soaring prices seriously enough to . . . insult the intelligence of voters. It claimed that spending trillions more through Build Back Better would actually reduce inflation. Surely it was a wonderful coincidence that a spending proposal crafted in early 2021 to fund the Democratic wish list also just happened to be precisely the anti-inflationary cure the economy would need in 2022 (and remember it had no cost — is there anything this bill cannot do?). In an attempt to back up its dubious argument that BBB would reduce inflation, the White House circulated a letter signed by 56 economists that made the considerably more modest claim that the proposal’s financial assistance to families would “alleviate some of the strain caused by inflation.” It also promoted a letter signed by 17 Nobel-laureate economists that merely claimed the law “will ease longer-term inflationary pressures” but made no mention of addressing soaring short-term inflation. And indeed, the Penn-Wharton Budget Model shows that BBB would likely worsen near-term inflation.
With inflation accelerating, the Washington Post has reported that the White House has faced an internal debate. Political advisers — pointing to polling — wanted the president to blame “corporate greed” and industry consolidation for inflation, while the Council of Economic Advisors responded that the narrative was simply not true (did corporations only decide to become greedy in the past year?). In the end, spin triumphed over substance, and the White House launched a baffling campaign against the meatpacking industry for driving inflation through consolidation and price-gouging (never mind that Lawrence Summers explains that breaking up the industry would actually raise short-term prices). Economists of all political stripes have been perplexed by the White House’s continuing focus on “big meat.”
But before we let the White House economists off the hook, they have released charts like this one that exaggerate economic growth rates by building a Y-axis that is not even numerically consistent.
The latest inflation spin manages to defy the laws of time, with President Biden calling it “Putin’s Price Hike.” Yes, global gas and food prices are undoubtedly beginning to feel the effects of the war, including the U.S. embargo on Russian oil. However, blaming inflation that began more than a year ago on a war that had started just a few weeks earlier is so nonsensical that even adding capital letters to “Putin’s Inflation” is unlikely to convince more than the most gullible.
This is the point where critics typically (and correctly) point out that President Trump was — how to put this — prone to exaggeration about the economy and other topics. However, that does not let the Biden administration off the hook for economic claims and misrepresentations that are still more egregious than most recent presidents — especially when Biden’s candidacy was justified as a return to quiet competence and normalcy. The argument that “Trump was worse” should not give politicians a free pass to behave badly.
All presidents try to spin their proposals and the economic data. But in just 14 months, the Biden White House is becoming known for misrepresenting other economists’ research and claims, and trying to redefine basic concepts like “zero cost,” “infrastructure” and “no taxes,” and by blaming last year’s inflation on this year’s war, time itself. Indeed, only ownership of a time machine or a remarkable gift for prophecy could explain how the administration was able to write a generic big-spending bill that perfectly anticipated the inflation challenge a year later. This White House has taken credit for automatic deficit reduction that it tried to sabotage with the ARP law and BBB bill, and responded to inflation by scapegoating “corporate greed” over the objections of its own staff economists. Partisan Democrats may happily consume all this spin, but polls show the rest of an increasingly hard-pressed electorate growing restless with what they can see for themselves is happening to the economy.