Biden to speak on Social Security, Medicare as shortfalls loom and Republicans oppose tax hikes
Written by Beth on September 27, 2022
WASHINGTON – President Joe Biden on Tuesday will put the spotlight on Medicare and Social Security, hot button issues that could pack a political punch six weeks before the midterm elections.
His remarks at the White House will be delivered days after the popular programs got little attention in House Republicans’ rollout of the agenda they promise to pursue if voters give them control in November.
Both Medicare and Social Security face long-run financing problems.
Democrats’ proposed solutions have generally focused on increasing taxes on higher income earners while also promising to expand benefits.
Republicans accuse Democrats of further straining Medicare through recent efforts to lower prescription drug costs. Many Republicans have backed raising the eligibility age for Medicare and the retirement age for Social Security as part of a plan to keep the programs solvent without hiking taxes.
The latest
- Because the government is paying out more in monthly Social Security benefits than it’s collecting in taxes, it’s projected to run out of reserves to fully fund benefits in 2035. At that point, it would have enough money to cover 80% of benefits.
- The Medicare trust fund, which covers inpatient hospital services, will only be able to pay 90% of scheduled benefits after 2028.
- Biden initially planned to travel to the retirement haven of Florida to talk about Social Security and Medicare. With a hurricane heading toward Florida, Biden is instead speaking at the White House.
- Biden will talk about how he is trying to strengthen Social Security and Medicare while Republicans want to “put these programs on the chopping block,” White House press secretary Karine Jean-Pierre said Monday.
- Social Security and Medicare are consistently top issues for senior citizens who vote at higher rates than younger Americans.
What Republicans have said about Social Security and Medicare
The “Commitment to America” House Republicans announced last week promises to “save and strengthen Social Security and Medicare” without specifying how.
Democrats immediately pointed to a budget plan proposed by House conservatives earlier this year. The plan rejects as “fundamentally immoral” raising payroll taxes to cover Social Security’s shortfall. Instead, conservatives propose slowly increasing the eligibility age to reflect that life expectancy has increased since the program began. Benefits would also go up for lower-income workers and down for higher earners.
Democrats have also attacked a proposed by Florida Sen. Rick Scott, head of the campaign arm of Senate Republicans, to require all federal legislation be renewed every five years. Democrats accuse Republicans of wanting to “sunset” Social Security and Medicare. Scott has said he wants to “fix and “preserve” those programs, without providing details.
What Democrats have proposed
A bill sponsored by nearly all House Democrats would increase Social Security benefits in various ways and apply the payroll tax for the first time on wages above $400,000. But most of the new benefits would be temporary, and the increased taxes would buy only about four extra years of solvency for the trust fund, according to the Center on Budget and Policy Priorities, a liberal think tank in Washington, D.C.
Biden did sign into law the Inflation Reduction Act, which included several provisions aimed at reducing prescription drug costs for Medicare patients. It requires the government to negotiate prices for some top-selling drugs and requires drug makers to pay rebates if their prices rise faster than inflation. It also limits out-of-pocket drug spending costs for Medicare patients to $2,000 a year.
How Republicans have pushed back
Republicans have charged that Democrats’ efforts to control prescription drug prices – what they call “Democrats’ drug takeover scheme” – will reduce pharmaceutical companies’ spending on research and development, resulting in fewer new drugs.
Texas Rep. Kevin Brady, the top Republican on the House Ways and Means Committee, has said repealing the provisions is likely a top priority for Republicans if voters hand them control in the November elections, Axios has reported.
