Fact Checking President Obama's State of the Union Address

Economic growth to progress in Afghanistan -- ABC News checks Obama's claims.

ByABC News
January 26, 2011, 9:41 AM

WASHINGTON, Jan. 26, 2011— -- In an optimistic State of the Union address, President Obama on Tuesday called for bipartisanship and a renewed investment in the nation's education and energy infrastructure.

The president hailed economic growth and the advances his administration has made, from health care to the wars in Afghanistan and Iraq.

ABC News takes a close look at some of the claims in the president's second annual State of the Union address to the joint Houses of Congress.

Tax Cuts:

"Thanks to the tax cuts we passed, Americans' paychecks are a little bigger today. Every business can write off the full cost of new investments that they make this year. And these steps, taken by Democrats and Republicans, will grow the economy and add to the more than 1 million private sector jobs created last year."

The White House inked a deal with Republicans last month to extend for 13 months of Bush-era tax cuts that were set to expire at the end of 2010. The tax cut extension bill passed in early December, much to the ire of many House Democrats.

By enacting a temporary break on the Social Security payroll tax, Americans, on average, will see a $2,000 increase in their paychecks this year. But not all income groups will benefit from the change. For those in the lower income group, earning salaries of less than $20,000 per year, the new tax package actually means a smaller paycheck. That's because the extension cut the Making Work Pay tax credit that gave working individuals $400 and couples filing jointly $800 on their 2009 and 2010 tax returns.

The bill also included a provision for businesses that would allow both large and small businesses to write off the full cost of most of their investments in 2011. The Treasury Department estimated that this could generate more than $50 billion in additional investment this year.

As for private sector jobs created last year, the president's assessment was on track. Nearly 1.3 million jobs were created in the private sector in 2010, according to the Bureau of Labor Statistics.

Education Reform:

"Race to the Top is the most meaningful reform of our public schools in a generation. For less than 1 percent of what we spend on education each year, it has led over 40 states to raise their standards for teaching and learning."

The president established the Race to the Top program in February 2009, one of his first steps in the education sector as commander in chief. The $4.3 billion program was part of the Recovery Act and is designed to reward states that are "implementing significant education reforms." It constitutes less than 1 percent of total U.S. education spending, which is expected to reach or exceed $900 billion this year.

Over the course of the competition, 35 states and the District of Columbia adopted rigorous common academic standards in reading and math, and 34 states changed laws or policies to improve education.

The program has led to much debate and strife over some schools being left behind in this competitive process, especially in states with strong union presence. Colorado and Louisiana have received nation-wide recognition for their education reforms, but their proposals for Race to the Top failed to win widespread union support.

Critics also doubt the long-term viability of the plan.

"Throughout the process, states got much credit for making changes to laws that actually, in most cases, will have little to no impact as long as teacher contracts control the classroom, and quality school choices are limited or nonexistent," Jeanne Allen, the president of the Center for Education Reform, said in statement in August, when the program winners were announced. "While there is no question that Race to the Top has been the administration's positive bully pulpit on education, the dramatic need for laws to change remains largely undone."

Economic Recovery:

"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."

President Obama hailed the rebound of the securities markets and corporate profits as signs the economy is recovering from recession. The data show both claims are true.

The Dow Jones industrial average, one measure of the markets' pulse, stood above 13,000 in December 2007, on the eve of the recession. It dipped below 9,000 by late 2008. But at the end of 2010, the DJI had bounced back to 11,500 and has been climbing.

U.S. businesses also reported record earnings last year, closing out the third quarter of 2010 at a rate of $1.659 trillion a year. That's a sea change from the start of the great recession in 2008, when the bottom fell out of corporate profits. Businesses reported earning only $1.258 trillion in 2009.


"I strongly believe that we should take on, once and for all, the issue of illegal immigration. And I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows. ... And let's stop expelling talented, responsible young people who could be staffing our research labs or starting a new business, who could be further enriching this nation."

Obama delivered a brief and familiar call for a bipartisan effort on immigration reform Tuesday night. But he also singled out a desire to end the deportation of young, educated illegal immigrants, presumably those eligible for the Dream Act, which was narrowly defeated in the last Congress.

Obama said those immigrants can "further enrich this nation."

Several nonpartisan studies have found that allowing more highly skilled young workers to remain in or immigrate to the U.S. would benefit the economy.

In the technology and engineering fields alone, for example, nearly a quarter of all new businesses are founded by immigrants, and they account for a significant chunk of jobs. Many of these entrepreneurs came to the United States as students and stayed.

But immigration opponents say legalization of young immigrants -- regardless of their education level or military service -- could cost taxpayers billions of dollars.

The nonpartisan Congressional Budget Office estimated late last year that one version of the Dream Act, which would provide a path to citizenship for an estimated 300,000 to 500,000 currently undocumented aliens, would reduce the deficit by $1.4 billion in the first decade because of increased tax revenue from immigrant residents.

But the same study also projects the bill could add between $5 billion and $20 billion to the deficit by 2060 through generation of additional benefit program costs.