Fact-checking Trump’s rhetoric on inflation, wages, and military profits

This article originally appeared on PolitiFact.

In a prime-time White House speech, President Donald Trump told the nation that his 11 months in office had brought historic improvements to the lives of Americans after years of what he described as immigration and economic chaos.

He watches: Trump addresses the nation from the White House

More good news is coming, he said during an 18-minute televised speech on December 17. He said the United States would send checks for $1,776 to 1.45 million American military personnel, a new “warrior dividend.”

“Checks are already on the way,” Trump said. “No one understood that until about 30 minutes ago.”

The picture painted by Trump contradicts what Americans say they feel. Only 36% of Americans polled last December by NPR/PBS News/Marist said they approved of the way he is handling the economy, and more than 1 in 3 said their personal financial situations had deteriorated in the past year. Consumer confidence is near its lowest levels when inflation reached about 9% in mid-2022 under President Joe Biden.

The picture painted by Trump distorted the facts. Trump has exaggerated, by trillions of dollars, the amount of expected foreign investment he has attracted to the United States. He also overstated the historic size of his domestic spending bill’s tax cuts and savings for older Americans, and repeated false talking points about the number and origin of illegal immigrants in the country. Crime is at record levels, he said, but violent crime rates were nearly twice as high in the early 1990s.

He watches: Trump pledges to significantly reduce drug prices, according to the new TrumpRX website

While Trump repeated some statements we’ve fact-checked before, we took a closer look at his big-picture summary of the economy, drug prices, newly announced military gains, and tax refunds.

Trump: Inflation stopped, wages rose, and prices fell

Inflation has not stopped. Wages are high. Prices, measured by inflation rates, do not fall.

The latest inflation data – which will be replaced by new data released on December 18 – shows that prices rose 3% year-on-year in September. That’s not zero, and it’s higher than the Fed’s target of 2% inflation. It is also the same year-over-year inflation level when Trump took office in January.

Trump has a better story to tell on wages. Since he took office, wage gains have outpaced inflation, although inflation data released on December 18 will show whether that gap will narrow.

Trump: I worked to “reduce the prices of medicines and pharmaceutical preparations by up to 400, 500, and even 600%.”

Trump has made similar claims before — citing reductions of up to 1,000% — but price cuts of this magnitude are mathematically not possible.

A 100% discount means the consumer pays nothing for the drug.

The 200% discount means that the pharmaceutical company pays the consumer the full price of the drug.

The 400% reduction means that the company pays the consumer three times the price of the drug.

A 500% discount would get the consumer four times the price, and a 600% discount would get the consumer five times the price to accept the drug. Neither of these reductions is realistic.

Trump: In honor of our nation’s founding in 1776, we are sending each soldier $1,776.

The cost for more than 1.45 million service members to receive these checks will reach $2.58 billion. It was not immediately clear where that money would come from, though Trump said, “We’ve made a lot more money than anyone thinks” from the tariffs.

He watches: Trump promises ‘warrior earnings’ of $1,776 to US military service members

If Trump’s tariffs remain in place through 2026, they will generate $191 billion in revenue that year, according to the center-right Tax Foundation.

But spending this large would normally require Congress to pass an appropriations law, which wouldn’t have happened if the checks were already in the mail, he said. Trump has put forward several conflicting approaches to raising tariff revenue, including a $2,000 dividend to Americans, reducing federal debt and eliminating the federal income tax (which would not be possible).

The White House did not immediately respond to an inquiry from PolitiFact on this point.

Trump: Next spring is expected to be the largest tax refund season ever

There’s reason to believe tax refund checks will be large in early 2026, with the largest refunds likely going to higher-income households.

“We expect refunds to be higher next tax filing season because some of the tax changes included in the One Big Beautiful Bill were in effect for the 2025 tax year,” said Joseph Rosenberg, a senior fellow at the Brookings Institution’s Urban Institute Tax Policy Center.

These provisions include higher standard deductions, a larger child tax credit, higher limits on state and local tax deductions, and new deductions for tips, overtime, car loan interest and senior citizens.

The Rosenberg Group estimates that overall tax bills will be reduced by about $125 billion, or $650 per taxpayer. Taxpayer savings will vary widely, with higher-income households generally benefiting more, Rosenberg said. His group estimates that among the bottom fifth of taxpayers by income, about 16% of households would receive a tax cut. In the top fifth of income, about 91% would see a tax cut, averaging about $2,300.

To some extent, the size of refunds will depend on whether taxpayers changed their withholding, said Garrett Watson, director of policy analysis at the Tax Foundation.

If taxpayers keep the old withholding rates, instead of gradually getting the benefits of the tax cuts through wage increases over the year, most taxpayers will get them all at once when they file their tax returns, Watson said.