Biden plans tax high-earners in bid to save Medicare
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[March 07, 2023]
By Jarrett Renshaw
(Reuters) -U.S. President Joe Biden will seek to raise the Medicare tax
on high earners and push for more drug price negotiations to help keep
the federal health insurance program solvent through at least 2050 as
part of his budget proposal this week, the White House said.
The tax increase from 3.8 percent to 5 percent on earned and unearned
income above $400,000 is part of a package of proposals aimed at
extending the solvency of Medicare’s Hospital Insurance (HI) Trust Fund
by at least 25 years, the White House said in a statement on Tuesday.
"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 separately in a New York Times guest essay.
Biden has sought to link Republicans to the idea of cutting funding for
the insurance program for seniors and the disabled as part of
negotiations over increasing the United States' $31.4 trillion debt
limit. The Democratic president has pledged to offer his vision for
funding Medicare and challenged Republicans to offer their own.
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The president is scheduled to unveil his budget on Thursday, including a
speech in Philadelphia to highlight his plan, although it faces likely
opposition from Republicans who control the House.
Biden called the rate increase "modest," adding in the Times: "When
Medicare was passed, the wealthiest 1 percent of Americans didn’t have
more than five times the wealth of the bottom 50 percent combined, and
it only makes sense that some adjustments be made to reflect that
reality today."
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![](../images/030723PIX/news_v91.jpg)
U.S. President Joe Biden delivers
remarks at the DNC 2023 Winter Meeting in Philadelphia,
Pennsylvania, U.S., February 3, 2023. REUTERS/Elizabeth Frantz
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His proposal also seeks to close loopholes that allow high earners
to shield some of their income from the tax, the White House said.
The Inflation Reduction Act (IRA), passed by Democrats last year,
authorizes Medicare to negotiate prices for high-cost drugs. The
budget proposal would allow Medicare to negotiate prices for more
drugs and to do so sooner after they launch, saving $200 billion
over 10 years, the White House said.
Without any action, the most recent Medicare Trustees Report
projected that the trust fund would be insolvent in 2028.
Some House Republicans have said Medicare along with Social
Security, which delivers retirement and disability payments, should
be part of any budget negotiations. While popular, the two programs
account for about one-third of federal spending, according to the
Congressional Budget Office, and are expected to grow as the U.S.
population ages.
(Reporting By Jarrett RenshawEditing by Shri Navaratnam and Chizu
Nomiyama)
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