US President Joe Biden is expected to unveil his proposed budget on Thursday as he prepares for likely re-election.
US President Joe Biden has proposed new taxes on the wealthy to help finance health insurancesaying the plan would help extend the insurance program’s solvency by 25 years and provide some degree of middle-class stability to millions of older adults.
In his plan, Biden openly states that the wealthy should bear a heavier tax burden. His budget would draw a direct line between these new taxes and the popular health insurance program for people over 65, essentially asking those who have done the best in the economy to subsidize the rest of the population.
Biden wants to raise the Medicare tax rate from 3.8% to 5% on income over $400,000 a year, including wages and capital gains. This would likely increase tax revenue by more than $117 billion over 10 years, according to earlier estimates from the Tax Policy Center.
MAGA Republicans on the Hill say the only way to be serious about preserving Medicare is to cut it.
Well, I think they are wrong.
I’m posting my budget this week. In this one, I’ll propose a plan to extend the life of Medicare for a generation, without cutting benefits.
Here’s how: https://t.co/ySkIlQ6C8K
— President Biden (@POTUS) March 7, 2023
“This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come,” Biden wrote in an essay published Tuesday in The New York Times. He called Medicare “a solid guarantee that Americans rely on to be there for them when they retire.”
The proposed changes to Medicare were part of a more comprehensive budget proposal that Biden planned to release Thursday in Philadelphia. Getting the proposal through Congress will likely be difficult, with Republicans in House control and Democrats holding only one slight majority in the Senate.
The proposal is a direct challenge to GOP lawmakers, who have argued that economic growth comes from tax cuts like those imposed by President Donald Trump. in 2017. These cuts have disproportionately favored wealthier households and businesses. They contributed to higher budget deficits when growth did not explode as Trump had promised and the economy was then derailed in 2020 by the corona virus pandemic.
The conflicting worldviews of how taxes would affect the economy are part of a larger confrontation. Biden and Congress must come to an agreement increase the government’s borrowing capacity at some point around the middle of the year, otherwise the government could default and plunge the United States into a debilitating recession.
Ahead of the 2024 campaign season, Democrats have stepped up discussions around Medicare, vowing to push back against any Republican attempts to cut the program, though so far the GOP has pledged to avoid any cuts. Yet Republican lawmakers have reached little consensus on how to deliver on their promise to put the government on a path to a balanced federal budget over the next 10 years.
Last year, members of the House Republican Review Committee proposed raising the age of eligibility for Medicare to 67, which would match the age Social Security program, the US public pension plan. But this idea did not advance in a divided Congress.
Republicans have denied plans to cut Medicare. A proposal by Republican Sen. Rick Scott of Florida that would require Congress to review all federal laws every five years, including Medicare, has met with little success.
Biden’s plan also aimed to close what the White House describes as loopholes that allow people to avoid Medicare taxes on certain earnings. Besides taxes, Biden wanted to expand Medicare’s ability to negotiate the cost of prescription drugs, a strategy that began with the Inflation Reduction Act. He signed the sweeping legislation last year.
Together, Biden’s new proposals would help bolster a key trust fund that pays for Medicare, which provides health care for seniors. According to the White House, the changes would maintain the fund’s solvency through the 2050s, about 25 years longer than currently expected.
Changes would also be made to Medicare benefits. Biden wants to limit cost sharing for some generic drugs to just $2. The idea would reduce out-of-pocket expenses for the treatment of hypertension, high cholesterol and other ailments.
Additionally, the budget would end cost-sharing for up to three mental health or behavioral health visits per year.