Despite his claims that he’s ushering in a “Golden Age,” President Trump admitted on Fox News yesterday that his economic policies might cause a recession. With job growth slowing, inflation expectations rising, and consumer sentiment tanking, the president and his talking heads are scrambling to do damage control:
Poll after poll shows Americans are souring on Trump’s economy. The president will say anything to get voters back on his side. Right now, that means waging a disinformation campaign about his economy.
Trump Administration’s Lies about the Economy:
TRUMP CLAIMS: “I’m not going to touch Social Security, Medicare, Medicaid.”
FACT: The Trump administration plans to fire at least 7,000 Social Security Administration employees, which could lead to significant delays in payment. Additionally, the CBO found that passing the Trump-backed House budget would be impossible without cutting Medicare or Medicaid.
MUSK CLAIMS: “The waste and fraud in entitlement spending – that’s the big one to eliminate. That’s the half trillion, maybe 600 or 700 billion a year.”
FACT: Musk has continued to make false claims about Social Security and Medicare to cover up his real goal: gutting entitlement programs to pay for his own tax cut. More than 130 million Americans rely on Medicare or Medicaid for health care, while 73 million receive Social Security benefits to meet their basic needs.
LUTNICK CLAIMS: “There’s going to be no recession in America […] no chance.”
FACT: The Atlanta Fed forecasts -2.4% GDP growth in the first quarter of this year. Economists at Goldman Sachs and Yardeni Research increased their odds of a recession in the next year, attributing the uptick to Trump’s increasingly chaotic approach to the economy. Treasury Secretary Bessent admitted the economy is “starting to roll a bit.” And Trump himself didn’t rule out the possibility of a recession.
LUTNICK CLAIMS: “All of America is going to be winners, because these prices are coming down.”
FACT: Prices are not coming down, and Americans don’t expect them to. In fact, inflation jumped in January by 3.0% year-over-year, a re-acceleration from prior months. Inflation expectations are also rising, meaning that Americans expect prices to rise even faster – not fall. Only 31% of Americans approve of President Trump’s handling of the cost of living, according to Reuters/IPSOS.
HASSETT CLAIMS: “Election uncertainty usually gets resolved around March.”
FACT: When asked about economic uncertainty, Hassett blamed the election.However, the NFIB Small Business Uncertainty index spiked to its third highest level on record last month, after falling post-election. Consumer sentiment rose post-election but has nosedived and their inflation expectations have increased since President Trump took office. Further, unemployment expectations have ballooned, jumping to their highest point since September 2023 last month. It’s clear that rising uncertainty is a result of Trump’s chaotic policies, not an election that was resolved over four months ago. The only thing Americans are certain about is that things will get worse for them: 27.4% of households report that they expect to be in a worse financial position this time next year, the highest level since November 2023.
HASSETT CLAIMS: “I think that all the spending [cuts] that we put into our reconciliation package, plus, you know, the DOGE spending cuts are going to be on top of that, that’s put a lot of downward pressure on interest rates. That’s making it easier to buy a car, easier to buy a house. That kind of stuff is being resolved already.”
FACT: The GOP’s spending plan would gut programs that make life more affordable for tens of millions of Americans, like Medicaid and SNAP. Mortgage rates are only falling because businesses and consumers are anticipating economic weakness, and existing and pending home sales fell in January.
BESSENT CLAIMS: “Everything else the administration is doing, we’re not getting much credit…mortgage [rates] are down.”
FACT: Mortgage rates are falling because of current economic weakness and anticipated further decline (or deterioration) caused by the Trump Administration’s misguided and chaotic approach to the economy. Rates are still well above the level they were before the Federal Reserve hiked interest rates in early 2022, and the Administration is doing nothing to make housing cheaper for American families.
BESSENT CLAIMS: “There’s nothing, nothing I’m going to do to hurt the collections [at the IRS].”
FACT: The Trump Administration has fired 7,000 IRS employees so far, and reports indicate they are steamrolling ahead with plans to cut the agency’s 90,000 person workforce in half. These reductions will give wealthy tax cheats a free pass and lead to delays for everyday taxpayers. Further, during Trump’s first term, the White House budget office supported cutting billions in IRS funding, and GOP lawmakers have continued to claw back IRS enforcement funding in recent months.
BESSENT CLAIMS: “We will grow if we deregulate as we’re planning to do.”
FACT: Deregulation does not lead to economic growth and harms families as it strips vital worker safety, consumer, and environmental protections. Federal regulations provide a net benefit of $100 billion a year – with the average benefit of major regulations being about 7 times the cost.
Trump Administration’s Lies on the GOP’s Tax Plan:
HASSETT CLAIMS: “Second quarter [GDP] is going to take off as everybody sees the reality of the tax cuts.”
FACT: The 2017 Trump tax law did not create an economic boom and spurred little – if any – growth in GDP. A mere extension of current policy halfway through the year is unlikely to alter any investment decisions. And that’s assuming Republicans can even get their act together to pass a tax bill over the finish line by the end of the second quarter.
HASSETT CLAIMS: “The tax policy is almost sure to work the way people are describing it.”
FACT: In 2017, Hassett, as chair of the Council of Economic Advisors, predicted that families would get a $4,000 raise from the Tax Cuts and Jobs Act. That never happened.
BESSENT CLAIMS: “If we make the current tax regime permanent, then we will grow.”
FACT: The 2017 Trump tax law did not create an economic boom and spurred little – if any – growth in GDP. In fact, the TCJA failed to live up to virtually all of its promises during Trump’s first term – job and wage growth slowed, business formation and investment did not meaningfully rise, and, notably, the law did not pay for itself. Instead, it gave 82 ultra-wealthy households $1 billion worth of handouts in the first year alone. The only thing that will grow if the TCJA’s tax cuts for the wealthy are made permanent are the pockets of top 0.1%, who stand to receive $314,000, while middle-class families receive less than $1 a day.
BESSENT CLAIMS: “I don’t know if [Medicaid] has to be a cut.”
FACT: Under the House’s budget resolution, it is impossible for Republicans to pass nearly $5 trillion in billionaire tax breaks without touching Medicaid or Medicare. Even if Republicans completely defunded all other programs within the jurisdiction of the House Energy and Commerce Committee, that would only save $135 billion – a far cry from the $880 billion minimum they’re required to cut. In other words, in order to pass their disastrous tax plan, Republicans will have to kick millions of Americans off of their health care.
Email press@groundworkcollaborative.org to speak with a Groundwork expert about the tax debate and the Trump Administration’s handling of the economy.