Biden’s Economic Spin

In a speech on inflation and the economy, President Joe Biden made some misleading claims and used political spin to criticize Republicans and promote his policies.

• Biden said higher inflation was due to the COVID-19 pandemic and Russian President Vladimir Putin, adding that “it’s not because of spending.” But there’s debate among economists over how much pandemic relief spending may have contributed.
• The president used Sen. Rick Scott’s 11-point plan to claim that Republicans will raise taxes. But Scott now says he’s not advocating a tax increase on working Americans and retirees, and the plan may not have widespread support in the Republican Party. 
• Biden cherry-picked in saying “we produced more oil domestically in my first year in office than my predecessor did in his first year.” That’s accurate, but the amount of crude oil produced in Biden’s first year was less than the amount produced in 2019 and 2020.
• He misleadingly took credit for historic deficit reduction, but most of that is the result of expiring emergency pandemic spending.
• Biden boasted that “my Treasury Department” will “pay down the national debt this quarter.” He’s right, but the federal debt held by the public is up 10.2% under Biden so far, and Treasury has said it will resume borrowing next quarter.
• The president said “not a penny” of the Republican tax cuts in 2017 “was paid for.” The tax law wasn’t fully paid for, but it raised some taxes in order to offset costs.

Biden spoke on May 10.

Inflation

Biden cited two reasons for high inflation: the COVID-19 pandemic and Russian President Vladimir Putin. When asked about whether he bore any responsibility for inflation, Biden said, “I think our policies help, not hurt,” adding that “it’s not because of spending.”

But that’s a matter of debate. Some economists have said that the American Rescue Plan’s federal stimulus money, which, in turn, boosted consumer spending, has contributed to higher inflation. The White House cites other economists who have said the ARP had a small and temporary effect.

“There are two leading causes of inflation we’re seeing today,” Biden said. “The first cause of inflation is a once-in-a-century pandemic. Not only did it shut down our global economy, it threw the supply chain and demand completely out of whack, especially in countries where more effective recovery responses weren’t