Biden to raise taxes on wealthy to save Medicare through 2050

President Joe Biden claims his plan to raise taxes on the wealthy will have saved Medicare from bankruptcy and accuses Republicans of trying to “destroy” the program by cutting benefits.

This is according to an opinion piece that appeared in the newspaper on Tuesday New York Timesstates Biden that “the budget I release this week will make the Medicare trust fund solvent after 2050 without cutting a penny in benefits.”

On Thursday, he will release his entire budget during a trip to Philadelphia.

But parts of his plans are released ahead of time, including his entitlement program proposal.

Biden is proposing to raise taxes for those earning more than $400,000 from 3.8 percent to 5 percent and expand Medicare’s ability to negotiate lower costs for prescription drugs, according to details released by the U.S. White House.

“This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come,” Biden writes.

His plan will run into difficulties in Congress, where Republicans control the House and Democrats have a slim majority in the Senate.

Republicans have yet to release their own budget plan.

House Speaker Kevin McCarthy will almost certainly oppose Biden’s plan, and Republicans in Congress are sure to highlight the tax increases the president is proposing in his budget proposal, betting that their arguments will sway voters at a time when inflation is hurting consumers’ pockets. keeps hitting. .

But Biden’s plan will appeal to older Americans, who have expressed concerns about the program’s stability.

As he prepares for his re-election campaign, Biden has drawn contrasts from Republicans in Congress, some of whom are pushing for deep cuts in federal programs.

It’s a call to older voters, who are usually reliable in showing up at the polls ahead of the 2024 presidential race.

Biden also went on the offensive against Republicans in his op-ed, claiming they want to “destroy” Medicare by cutting its benefits.

“My Republican friends argue that the only way to take Medicare’s preservation seriously is to cut benefits, including making it a voucher program that loses value every year. Some have threatened our economy unless I agree to austerity,” he wrote.

“Only in Washington can people claim to save something by destroying it.”

Forecasters warn that Medicare will be in trouble in five years.

The Center for Budget and Policy Priorities found that beyond 2028, resources from the “Part A” entitlement program, which reimburses hospital care, will slowly decline — unable to meet demand. After 2028, Medicare would only be able to pay for about 90 percent of hospital coverage, 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 plan, but Speaker Kevin McCarthy will certainly oppose Biden’s plan

Currently, most Medicare employers and employees pay 1.45% payroll taxes each for a total of 2.9%. The self-employed pay both sides of the tax.

Individuals making more than $200,000 and married couples making more than $250,000 pay an additional 0.9% for money above those thresholds, for a total of 3.8%.

R-Texas House Budget Committee chair Jodey Arrington, who drafts his party’s fiscal plan, has said Biden’s plans will push inflation up.

“We’re going to see a budget that keeps raising taxes and spending tax dollars, and as a result, this 15th consecutive month of inflation continues,” Arrington said.

Biden laid the groundwork for his upcoming budget last month in his State of the Union address and other recent speeches. He has pledged to reduce deficits by a combined $2 trillion over 10 years, strengthen Social Security and Medicare, and limit tax increases to people earning more than $400,000.

His plan is in some ways much more ambitious than what he proposed in 2021, when his budget would have reduced debt by $1 trillion over projections over 10 years.