President Joe Biden claims his plan to raise taxes on the rich would save Medicare from bankruptcy, and he accuses Republicans of wanting to “destroy” the program by cutting its benefits.
In an op-ed Tuesday in the New York Times, Biden argues that “the budget I’m releasing this week will keep the Medicare trust fund solvent beyond 2050 without cutting a penny in benefits.”
He will release his full budget on Thursday during a trip to Philadelphia.
However, parts of his plans will be released early, including his proposal for the entitlement program.
President Biden plans to raise taxes on the wealthy to pay for Medicare
Biden is proposing to increase taxes on those earning more than $400,000 from 3.8 percent to 5 percent and expand Medicare’s ability to negotiate lower prescription drug costs, according to details released by the White House .
“This modest increase in Medicare contributions for those with the highest incomes will help keep the Medicare program strong for decades to come,” Biden writes
His plan will face difficulties in Congress, where Republicans control the House of Representatives and Democrats have a narrow majority in the Senate.
Republicans have yet to release their own budget.
House Speaker Kevin McCarthy will almost certainly oppose Bidens. And Congressional Republicans this week will highlight the tax hikes Biden is proposing in his budget proposal, betting their arguments will sway voters at a time when inflation continues to hit consumers’ pockets.
But Biden’s plan will appeal to older Americans, who have expressed concerns about the stability of the program.
As he prepares for his re-election campaign, Biden has drawn contrasts with Congressional Republicans, some of whom are seeking deep cuts in federal programs.
It’s an appeal to older voters who are usually reliable voters ahead of the 2024 presidential race.
Biden also attacked Republicans in his comment, claiming they want to “destroy” Medicare by cutting its benefits.
“My Republican friends maintain that the only way to get Medicare seriously is to cut benefits, including turning it into a voucher program that’s worth less every year. Some have threatened our economy unless I agree to benefit cuts,” he wrote.
“Only in Washington can people say they’re saving something by destroying it.”
Forecasters warn Medicare will face problems five years from now.
The Center for Budget and Policy Priorities noted that funding for the Part A entitlement program, which reimburses hospital treatment, will slowly shrink after 2028 – unable to meet demand. After 2028, Medicare could only pay about 90 percent of hospital bills, and that percentage would decline over the years.
About 60 million seniors depend on Medicare for their health insurance.
House Republicans have yet to release their budget, but Speaker Kevin McCarthy is certain to oppose Biden’s plan
Currently, most Medicare employers and employees each pay 1.45% payroll tax for a total of 2.9%. The self-employed pay both sides of the tax.
Individuals earning more than $200,000 and married couples earning more than $250,000 pay an additional 0.9% on funds exceeding these thresholds, for a total of 3.8%.
House Budget Committee Chairman Jodey Arrington, R-Texas, who drafts his party’s budget, said Biden’s plans would cause inflation to spike.
“We’re going to see a household that continues to raise taxes and continues to spend taxpayers’ money, and as a result continues to endure this 15th straight month of inflation,” Arrington said.
Biden laid the groundwork for his upcoming budget in his State of the Union address last month and other recent speeches. He has pledged to reduce deficits by a total of $2 trillion over 10 years, strengthen Social Security and Medicare, and limit tax increases to those earning more than $400,000.
In some ways, his plan is far more ambitious than what he proposed in 2021, when his budget would have reduced debt by $1 trillion over 10 years compared to projections.