President Donald Trump took undue credit Tuesday night for massive cost-savings in a fighter jet contract and gave a one-sided account of the costs and benefits to the economy from immigration — ignoring the upside.
A look at some of his claims in his prime-time speech to Congress:
TRUMP: “According to the National Academy of Sciences, our current immigration system costs America’s taxpayers many billions of dollars a year.”
THE FACTS: That’s not exactly what that report says. It says immigrants “contribute to government finances by paying taxes and add expenditures by consuming public services.”
The report found that while first-generation immigrants are more expensive to governments than their native-born counterparts, primarily at the state and local level, immigrants’ children “are among the strongest economic and fiscal contributors in the population.”
The report found that the “long-run fiscal impact” of immigrants and their children would probably be seen as more positive “if their role in sustaining labor force growth and contributing to innovation and entrepreneurial activity were taken into account.”
TRUMP: “We’ve saved taxpayers hundreds of millions of dollars by bringing down the price” of the F-35 jet fighter.
THE FACTS: The cost savings he persists in bragging about were secured in full or large part before he became president.
The head of the Air Force program announced significant price reductions in the contract for the Lockheed F-35 fighter jet Dec. 19 — after Trump had tweeted about the cost but weeks before he met the company’s CEO about it.
Pentagon managers took action even before the election to save money on the contract. Richard Aboulafia, an analyst with the aerospace consulting firm Teal Group, said there is no evidence of any additional cost savings as a result of Trump’s actions.
TRUMP: “Since my election, Ford, Fiat-Chrysler, General Motors, Sprint, Softbank, Lockheed, Intel, Walmart and many others have announced that they will invest billions of dollars in the United States and will create tens of thousands of new American jobs.”
THE FACTS: It’s unlikely Trump is the sole or even primary reason for the expected hiring he cites. Many of the announcements reflect corporate decisions that predate his election.
In the case of Intel, construction of the Chandler, Arizona, factory referred to by Trump actually began during Barack Obama’s presidency. The project was delayed by insufficient demand for Intel’s high-powered computer chips, but the company now expects to finish the factory within four years because it anticipates business growth.
More important, even as some companies create jobs, others are laying off workers. The best measure of whether more jobs are actually being created is the monthly employment report issued by the Labor Department, which nets out those gains and losses. The department will issue its report for February, the first full month of Trump’s term, on March 10.
TRUMP: “We will provide massive tax relief for the middle class.”
THE FACTS: Trump has provided little detail on how this would happen. Independent analyses of his campaign’s tax proposals found that most of the benefits would flow to the wealthiest families. The richest 1 percent would see an average tax cut of nearly $215,000 a year, while the middle one-fifth of the population would get a cut of just $1,010, according to the Tax Policy Center, a joint project by the Brookings Institution and Urban Institute.
TRUMP: “Ninety-four million Americans are out of the labor force.”
THE FACTS: That’s true, but for the vast majority of them, it’s because they choose to be.
That 94 million figure includes everyone aged 16 and older who doesn’t have a job and isn’t looking for one. So it includes retirees, parents who are staying home to raise children, and high school and college students who are studying rather than working.
They are unlikely to work regardless of the state of the economy. With the huge baby-boomer generation reaching retirement age and many of them retiring, the population of those out of the labor force is increasing and will continue to do so, most economists forecast.
It’s true that some of those out of the workforce are of working age and have given up looking for work. But that number is probably a small fraction of the 94 million Trump cited.
TRUMP: “Obamacare is collapsing … imploding Obamacare disaster.”
THE FACTS: There are problems with the 2010 health care law, but whether it’s collapsing is hotly disputed.
One of the two major components of the Affordable Care Act has seen a spike in premiums and a drop in participation from insurers. But the other component, equally important, seems to be working fairly well, even if its costs are a concern.
Trump and congressional Republicans want to repeal the whole thing, which risks leaving millions of people uninsured if the replacement plan has shortcomings. Some critics say GOP rhetoric itself is making things worse by creating uncertainty about the future.
The health law offers subsidized private health insurance along with a state option to expand Medicaid for low-income people. Together, the two arms of the program cover more than 20 million people.
Republican governors whose states have expanded Medicaid are trying to find a way to persuade Congress and the administration to keep the expansion, and maybe even build on it, while imposing limits on the long-term costs of Medicaid.
While the Medicaid expansion seems to be working, the markets for subsidized private health insurance are stressed in many states. Also affected are millions of people who buy individual policies outside the government markets, and face the same high premiums with no financial help from the health law.
Larry Levitt of the nonpartisan Kaiser Family Foundation says “implosion” is too strong a term. An AP count found that 12.2 million people signed up for this year, despite the Trump administration’s threats to repeal the law.
But a health care blogger and industry consultant, Robert Laszewski, agrees with Trump, saying too few young, healthy people have signed up to guarantee the stability of the insurance markets.