President Joe Biden is proposing to increase tax rates for the wealthy to fund Medicare benefits amid concerns the welfare program will go insolvent within the next decade.
The provision is one part of Biden’s proposal to extend Medicare protections for 25 years without cutting any of the program’s benefits or increasing costs, according to a memo sent by the White House on Tuesday. The proposal is included in Biden’s budget proposal for the next fiscal year, which the president is expected to unveil in full on Thursday.
As part of his budget plan, Biden proposes to increase “modestly” the Medicare tax rate for taxpayers earning an annual income of more than $400,000 from 3.8% to 5%.
“Let’s ask the wealthiest to pay just a little bit more of their fair share, to strengthen Medicare for everyone over the long term,” Biden wrote in an op-ed to the New York Times on Tuesday. “Let’s ask them to pay their fair share so that the millions of workers who helped them build that wealth can retire with dignity and the Medicare they paid into.”
His proposal would also seek to close loopholes that allow some high-income earners to avoid paying the 3.8% Medicare tax. In doing so, Biden’s plan would extend Medicare’s benefits until 2050 without cutting benefits, according to the White House.
Biden also proposed provisions that would lower the cost of prescription drugs and behavioral healthcare costs by strengthening Medicare’s ability to negotiate with pharmaceutical companies.
The budget proposal comes as lawmakers are considering ways to salvage Medicare and Social Security benefits amid concerns the programs will go insolvent in the next few years. Biden has repeatedly accused Republicans of seeking to cut Medicare and Social Security benefits, hoping to use the attack as fodder in the 2024 election cycle.
“MAGA Republicans have a different view. They want to repeal the Inflation Reduction Act,” Biden added in his op-ed. “If the MAGA Republicans get their way, seniors will pay higher out-of-pocket costs on prescription drugs and insulin, the deficit will be bigger, and Medicare will be weaker. The only winner under their plan will be Big Pharma. That’s not how we extend Medicare’s life for another generation or grow the economy.”
The president has pointed to Sen. Rick Scott’s (R-FL) proposed agenda for the party, which includes a provision that would sunset all federal legislation every five years unless Congress votes to renew it. Facing blowback after Biden highlighted his plan during this year’s State of the Union speech, Scott updated the proposal to exclude Medicare or Social Security, which he said was intended all along.
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Republicans have pushed back against assertions that they would cut the two programs, noting any plans to do so are “off the table.”
“I want to find a reasonable and a responsible way that we can lift the debt ceiling but take control of this runaway spending,” House Speaker Kevin McCarthy (R-CA) told CBS in January. “If you look at the last four years, the Democrats have increased spending by 30%, $400 billion. We’re at 120% of GDP. We haven’t been in this place to debt since World War II, so we can’t continue down this path.”
