WH Contradicts Obama’s Middle-Class Income Claim—As He's Making It

By Terence P. Jeffrey | January 25, 2012 | 12:45 PM EST

President Barack Obama delivering his State of the Union Address to Congress on Jan. 24, 2012. (AP Photo/Saul Loeb)

(CNSNews.com) - During its “Enhanced Livestream” Internet broadcast of President Barack Obama’s State of the Union Address on Tuesday night, the White House posted a graphic on the screen directly contradicting a claim Obama was making about middle-class incomes at the very moment Obama was making the claim.

“Long before the recession, jobs and manufacturing began leaving our shores,” Obama said at 5 minutes and 34 second into the speech. “Technology made businesses more efficient, but also made some jobs obsolete. Folks at the top saw their incomes rise like never before, but most hardworking Americans struggled with costs that were growing, paychecks that weren’t, and personal debt that kept piling up.”

If the player does not load, please check that you are running the latest version of Adobe Flash Player.

Is it true that the paychecks of hardworking Americans were not growing in the era before the recession? And what was Obama’s source for this claim?

As Obama was speaking, the White House “Enhanced Livestream” showed a split screen. On the left was Obama. On the right was a chart. At the bottom, the chart was sourced as follows:  “CBO, After Tax Income Adjusted for Inflation.”

The chart showed what it said was the “[p]ercentage change in income since 1979.” It featured a red line showing that the inflation-adjusted income of the “TOP 1%” increased by something more than 250 percent, and a blue line showing that the inflation-adjusted income of the “MIDDLE 60%” increased by about 40 percent.

Contrary to what Obama said in the speech at the very moment this chart appeared next to him on the White House Internet broadcast, the chart did not indicate that there was a group of American earners whose paychecks “weren’t” growing in the years after 1979—even when adjusted for inflation.

The actual Congressional Budget Office report that the White House graphic cited was published in October. It is titled, “Trends in the Distribution of Household Income between 1979 and 2007.”

The report traced the trend in American incomes over most of the three decades preceding Obama’s 2008 election. It did not show what has happened to American incomes since Obama became president.

According to the CBO report, Americans at all levels of the national income ladder saw their inflation-adjusted incomes rise from 1979 to 2007.

“For the 60 percent of the population in the middle of the income scale (the 21st through 80th percentiles), the growth in average real after-tax household income was just under 40 percent,” said the report.

Yes, according to the report, those in the top 1 percent saw their inflated-adjusted incomes increase by 275 percent from 1979 to 2007.

But those in the 20 percent just below the top 1 percent saw their inflation-adjusted incomes increase by 65 percent.

And those in the lowest 20 percent saw their inflation-adjusted incomes increase by 18 percent.

According to the CBO report, American households in all income brackets had higher inflation-adjusted incomes in 2007, during the seventh year of George W. Bush’s presidency, than they had in 1979, the third year of Jimmy Carter’s presidency.