🚨 Fact-checking financial claims in last night's debate

Hi! Reporters Pete Grieve and Julia Glum here with an update about the first presidential debate. 

Money certainly took center stage Thursday in Atlanta, where President Joe Biden and former President Donald Trump faced off on topics including but not limited to Social Security, taxes, the cost of child care, housing, inflation, jobs, tariffs, the price of eggs, Pell Grants and more. 

(Whew.) (It was a long 90 minutes.)

Pocketbook issues are a major focus for voters and candidates alike heading into November. It can be hard to keep up with who said what and which claims are true, so we’ve put together a quick roundup of remarks from Trump and Biden’s first 2024 debate. 

Here’s a fact-check of three big money topics that could affect your wallet:

Inflation

→ Trump said “inflation’s killing our country” and also suggested that food costs have “doubled, tripled and quadrupled.”
→ Biden said “if Trump is re-elected, we’re likely to have a recession, and inflation is going to increasingly go up.”

The first question of the debate centered on inflation and the pain for consumers, putting Biden on defense. He blamed “corporate greed” and the economic conditions he inherited from Trump.  

However, as Trump noted, the annual inflation rate was low when Biden took office — 1.4% in January 2021. Inflation peaked at 9.1% in June 2022, and it’s back down to 3.4%. Trump, for his part, exaggerated how bad inflation has been. Food prices have not doubled, let alone quadrupled: They’re up about 23% over the past four years.

While it’s true that inflation has soared during Biden’s presidency, global economic conditions and central bank policy have a greater impact on inflation than the actions of any particular country’s leader. Inflation wasn’t just a U.S. problem, either: Globally, headline inflation also rose above 9% in 2022, according to the International Monetary Fund. 

Will inflation climb if Trump gets another term? Maybe. But overall it’s impossible to predict with any certainty where inflation is headed in the next four years.

Taxes

→ Trump said he led Congress to pass “the largest tax cut in history” and alleged Biden “wants to raise everybody's taxes by four times."
→ Biden said “we have to make sure that we have a fair tax system,” repeating his claim that nobody who makes under $400,000 “had a single penny increase in their taxes” — which will “be the case again” if he’s re-elected.

Trump was referring to the Tax Cuts and Jobs Act of 2017, which drastically changed the U.S. tax system. Among other changes, the TCJA nearly doubled the standard deduction, reduced income tax rates, increased the child tax credit, nixed personal exemptions and slashed corporate income tax rates. 

TCJA was a big deal, to be sure, but it was not the largest tax cut in history, according to the Committee for a Responsible Federal Budget.

Many of its provisions are set to expire at the end of 2025, teeing up a major fight for the next president. 

Biden vowed Thursday to “fix the tax system,” though he didn’t go into too much detail. According to a June blog post from the Tax Foundation, a tax policy nonprofit, Biden’s 2025 budget would raise taxes by about $4.4 trillion on a gross basis. That's a tax increase of 7% — nowhere near the 300% tax hike Trump mentioned.

Social Security

→ Biden said Trump “wants to get rid of Social Security” and “thinks that there’s plenty to cut in Social Security.”
→ Trump said Biden “is going to single-handedly destroy Social Security” by giving benefits to “millions of people [who] are pouring into our country.”

Unless Congress acts, Social Security’s trust fund reserves will run out in 2035, at which point it’ll only be able to pay out 83% of benefits.

When asked how to keep Social Security solvent, Biden suggested making wealthy Americans “begin to pay their fair share.” As it stands, employers and workers both pay 6.2% of their wages up to $168,600. On Thursday, Biden appeared to suggest he’d raise payroll taxes for people earning over $400,000 a year, which would bolster the reserves.

Trump’s position on Social Security has changed recently. In March, he told Breitbart that he “will never do anything that will jeopardize or hurt Social Security or Medicare” — but those comments followed an interview in which he said “there is a lot you can do in terms of entitlements in terms of cutting.” He has not put forth a formal proposal on how to fix Social Security.

During the debate, Trump linked the Social Security funding problem to immigration. But according to the Social Security Administration, only “lawfully present noncitizens of the United States who meet all eligibility requirements” are able to qualify.

Read Money's full analysis of the first 2024 presidential debate here. 

Then let us know: Did you watch the debate? What did you think? Send any and all feedback to editor@money.com.

Have a great weekend!