HYGO News Supply chain crisis not happening, Build Back Better is paid for, wages are up
Biden Denies Supply Chain Crisis: “That’s Not What’s Happening” — Compares Shortages to Beanie Babies, Claims Build Back Better Is “Paid For”
On December 1, 2021, President Biden delivered remarks that attempted to reframe the supply chain crisis, the inflation emergency, and the CBO’s assessment of Build Back Better simultaneously. Biden dismissed reports of empty shelves as media exaggeration — “for the vast majority of the country, that’s not what’s happening” — and compared the 2021 supply chain crisis to Cabbage Patch Kids selling out in the 1980s and Beanie Babies in the 1990s. He repeated that Build Back Better was “fully paid for” despite the CBO scoring it as adding $367 billion to the deficit. He claimed wages were up and Americans had “$100 more in their pockets every month,” even as real inflation-adjusted wages were declining. He said his plan to curb inflation was “working” and cited the Strategic Petroleum Reserve release as evidence. A reporter shouted “What ever happened to your promise to shut down the virus?” as Biden walked away from the podium.
”That’s Not What’s Happening”
Biden opened by acknowledging the public perception of the supply chain crisis before dismissing it. “If you watch the news recently, you might think the shelves in all our stores are empty across the country. That parents won’t be able to get presents for their children on holidays this holiday season,” he said.
“But here’s the deal. For the vast majority of the country, that’s not what’s happening.”
Biden then attempted to normalize the shortages by comparing them to perennial holiday sellouts. “Now, I can’t promise that every person will get every gift they want on time. Only Santa Claus can keep that promise,” he said. “But there are items every year that sell out that are hard to find. Some of you moms and dads may remember Cabbage Patch Kids back in the 80s or Beanie Babies in the 90s, or other toys that have run out at Christmas time in past years when there was no supply chain problem.”
The comparison drew immediate criticism. The 2021 supply chain crisis was not a matter of individual toys selling out. It was a systemic disruption affecting everything from semiconductors to lumber to food products, driven by port congestion, container shortages, trucking capacity limitations, and labor market disruptions. Comparing it to the Beanie Babies craze of the 1990s struck critics as either deliberately misleading or evidence that the president did not grasp the scale of the problem.
Biden concluded with confidence: “But we’re heading into a holiday season in very strong shape."
"It’s Working”
Biden claimed that his approach to combating inflation was producing results. “As we continue to overcome these obstacles, the more price pressures will ease. But I have not been content to sit back and wait. I’ve used every tool available to address the price increases,” he said.
He then delivered the assessment: “And it’s working.”
As evidence, Biden pointed to his release of oil from the Strategic Petroleum Reserve: “Last week, I announced the largest ever release from the United States Strategic Petroleum Reserve to increase the supply of oil and help bring down prices.”
The SPR release had been announced as a coordinated action with other nations, totaling 50 million barrels from the U.S. reserve. But oil markets had largely shrugged off the announcement. Gas prices at the time of Biden’s remarks were averaging over $3.40 per gallon nationally — up more than a dollar from a year earlier — and would continue rising through the spring of 2022 to over $5 per gallon in some markets. The claim that the plan was “working” would not age well.
Build Back Better: “Fully Paid For” vs. CBO’s $367 Billion
Biden repeated his central fiscal claim about Build Back Better: “The fact is the Build Back Better Plan is fiscally responsible. It’s the first major piece of legislation in more than a decade that is not only fully paid for, but will generate more than $100 billion in deficit reduction.”
He doubled down: “I want to repeat again, Build Back Better is fully paid for and will not add to the debt or to deficits. In fact, we can reduce it.”
The video then juxtaposed this claim with the CBO’s actual finding, read directly from the Congressional Budget Office score: “CBO estimates that enacting this legislation would result in a net increase in the deficit totaling $367 billion over the 2022 through 2031 period.”
The $367 billion figure represented the CBO’s assessment of the gap between the bill’s spending and its revenue over ten years. The administration’s defense — which Biden did not elaborate on in these remarks — was that the CBO underestimated revenue from IRS tax enforcement, projecting roughly $200 billion compared to the administration’s estimate of $400 billion. But even with that disputed adjustment, the math was contested.
The White House’s continued assertion that the bill cost “zero” and was “fully paid for” in the face of the CBO’s contrary assessment had become one of the most persistent points of tension between the administration and its critics, including moderate Democrats whose votes the bill needed.
”Wages Are Up” — But Real Wages Were Falling
Biden made a claim about household finances that was technically accurate in nominal terms but misleading when adjusted for inflation. “Wages are up,” he said. “Thanks to the American Rescue Plan, we’ve delivered significant tax cuts for families raising kids. Tax cuts and rising wages for middle-class families, meaning Americans on average have about $100 more in their pockets every month.”
He went further: “Even after accounting for rising prices, the typical American family has more money in their pockets than they did last year or the year before that.”
The claim relied on a specific calculation that included child tax credit payments and other government transfers as part of household income. When those transfers were excluded and only wages and salaries were measured, real (inflation-adjusted) earnings had been declining for months. The Bureau of Labor Statistics data showed that while nominal wages were indeed rising, inflation was eating into purchasing power faster than paychecks were growing.
Biden also touted the child poverty reduction: “Thanks to the American Rescue Plan, we’ve cut child poverty in America by more than 40%.” He quoted Treasury Secretary Janet Yellen describing the achievement as “a profound economic and moral victory for our country.” The child poverty reduction was real and significant, driven primarily by the expanded child tax credit, but the credit was temporary and would expire at the end of 2021 without Congressional renewal.
The 17 Nobel Laureates and the Unanswered Question
Biden cited familiar authorities in defense of his economic agenda: “17 Nobel laureates, Nobel economic winners, have written a letter affirming that this bill will reduce inflationary pressure in the economy. Two of the leading rating agencies on Wall Street confirmed this month that my plan will not add to inflationary pressures. In fact, they will ‘take the edge off of inflation.’”
He also took a shot at Republican critics: “Our Republican friends are talking a lot about prices, but they’re lined up against my Build Back Better Plan, which would go right at the problem of rising costs for families. Why is that? I don’t want to speculate on anyone’s motive, but it’s always easier to complain about a problem than to try to fix it.”
As Biden wrapped up and began to leave, a reporter shouted: “Mr. President, what ever happened to your promise to shut down the virus?” Biden did not respond. Another reporter asked about testing requirements. Biden continued walking away. The unanswered question about his signature campaign promise — “I’m going to shut down the virus, not the country” — provided a sharp coda to remarks in which the president had claimed his various plans were “working.”
Key Takeaways
- Biden compared the supply chain crisis to Cabbage Patch Kids and Beanie Babies selling out, told Americans “that’s not what’s happening” regarding empty shelves, and said his plan to curb inflation was “working” by citing the Strategic Petroleum Reserve release — while gas prices remained over a dollar higher than the previous year and continued rising.
- He repeated that Build Back Better was “fully paid for” and would reduce the deficit, directly contradicting the CBO’s finding of a $367 billion deficit increase over ten years, and claimed Americans had “$100 more in their pockets every month” while real inflation-adjusted wages were declining.
- Biden walked away without answering a shouted question — “What ever happened to your promise to shut down the virus?” — after touting 17 Nobel laureate endorsements and a 40% child poverty reduction while saying he didn’t “want to speculate on anyone’s motive” for opposing his economic agenda.