Friday, October 24th, 2014

Fact-checking Obama's State of the Union speech

President Barack Obama gives the State of the Union address as Vice President Joe Biden and Speaker of the House John Boehner look on.
President Barack Obama gives the State of the Union address as Vice President Joe Biden and Speaker of the House John Boehner look on.

President Barack Obama struck a centrist tone in his second State of the Union speech, arguing for corporate tax cuts and fewer government regulations.

PolitiFact watched the entire speech and checked several of Obama's claims. Later, we began taking on the GOP response from Wisconsin U.S. Rep. Paul Ryan. (We will supplement our coverage tonight with more fact-checks of the speeches by Obama, Ryan and Rep. Michele Bachmann, R-Minn., tomorrow.)

We started our fact-checking by analyzing Obama's contention that the U.S. economy is beginning to recover.

Obama said: "We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again."

We ruled: While corporate profits are just one component of the economy -- and just one part of Americans’ perceptions of how well the nation is doing economically -- Obama is correct in his description of the trend in corporate profits. The current trendlines for corporate profits, combined with recent fourth-quarter reports, put Obama's claim on target. We rated his statement True.

Later, when talking about education, Obama said that the country must better educate its students

Obama said: "Maintaining our leadership in research and technology is crucial to America's success. But if we want to win the future — if we want innovation to produce jobs in America and not overseas — then we also have to win the race to educate our kids..

"Think about it. Over the next ten years, nearly half of all new jobs will require education that goes beyond a high school degree. And yet, as many as a quarter of our students aren't even finishing high school. The quality of our math and science education lags behind many other nations. America has fallen to 9th in the proportion of young people with a college degree. And so the question is whether all of us — as citizens, and as parents — are willing to do what's necessary to give every child a chance to succeed."

We ruled: We found Mostly True Obama's claim that "As many as a quarter of our students aren’t even finishing high school" -- noting that nationwide dropout rates are undermined by a number of problems.

Another major topic of Obama's speech -- the need to take control of the national budget. On that front he had this to say:

Obama said: "Now, the final step – a critical step – in winning the future is to make sure we aren't buried under a mountain of debt," Obama said. "We are living with a legacy of deficit-spending that began almost a decade ago. And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people's pockets. But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same."

 We ruled: Did deficit-spending begin almost a decade ago? We said Half True, arguing that Obama relied on a Democratic talking point that largely starts with blaming George W. Bush.

The full story of the nation's deficits began long before Bush was president. Historical data show the government ran deficits from at least 1970 to 1998.

And then, Obama talked about the need to lower corporate income tax rates (It's something Minnesota U.S. Rep. Michele Bachman called for as well during her Tea Party response).

Obama said: "Over the years a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change."

We ruled: He's right that the U.S. does now have the highest corporate tax rates on the books, at least among the biggest industrialized democracies, which is most economists' typical yardstick. And U.S. tax rates also are among the biggest by more nuanced measures. So we found Obama’s statement True.

Finally, we did one fact-check of Ryan before the evening was out.

Ryan said: "The debt will soon eclipse our entire economy."

We ruled: The most recent figures show $13.6 trillion in gross federal debt, against a $14.7 trillion economy, which to us signals the onset of an eclipse. We rated the statement True.