Biden’s Budget Plan: Tax Increases on Wealthy and Corporations, Medicare Extension, and Federal Employee Raise
President Joe Biden is set to release his budget plan today, and it includes tax increases on wealthy individuals and corporations, as well as expanding and accelerating prescription drug price negotiations.[0] The White House says the proposal would extend Medicare's solvency for another 25 years, and also reduce costs for Medicare beneficiaries.
The proposal calls for increasing the Medicare payroll taxes on people making over $400,000 to 5% from the current 3.8%. It would also raise the Medicare tax on incomes over $400,000 to 5%, from 3.8%. The White House also released a fact sheet previewing its plan for extending Medicare's solvency, which includes raising taxes on wealthy individuals, corporations, and business owners, and allowing Medicare to negotiate prices for more drugs.
Part of Biden's plan also includes a 5.2% raise for federal employees, which would be the largest increase since a 9.1% hike in 1980.[1] The proposal would also cap out-of-pocket costs for certain generic drugs at $2, eliminate Medicare cost-sharing for three mental health or other behavioral health visits per year, and require parity between physical health and mental health coverage in Medicare.[2]
Biden has been hammering Republicans over Medicare and Social Security, both of which are extremely popular but account for large and rising chunks of the federal budget. Mitch McConnell, the Republican Senate Minority Leader, stated that the budget proposed by President Biden is unlikely to be accepted in the House, which is controlled by the GOP.[3]
Biden has accused Republicans of wanting to cut Medicare and Social Security, though McCarthy has said cuts to the big programs are off the table. But when Biden says Republican proposals would add $3 trillion to the nation’s debt, he is not including corresponding deep spending cuts that were part of a recent Republican Study Committee budget.[4] It is yet to be determined if the proposed cuts are attainable, as well as if GOP House officials will attempt to alter Social Security or Medicare.[5]
Overall, Biden's budget plan is largely symbolic, since Congress ultimately holds the power of the purse, but the plan sheds light on Biden's political strategy and messaging as he prepares for a likely 2024 presidential bid. As the debate continues over the debt ceiling and Biden's expected re-election campaign, the proposal serves as a direct challenge to past Republican proposals to overhaul or cut benefits and an implicit roadmap for a reelection campaign policy platform.
0. “Biden Budget Would Extend Medicare Solvency by 25 Years” AARP, 7 Mar. 2023, https://www.aarp.org/politics-society/advocacy/info-2023/biden-budget-medicare-solvency.html
1. “Biden Reportedly Will Propose a 5.2% Pay Raise for Feds in 2024” GovExec.com, 8 Mar. 2023, https://www.govexec.com/pay-benefits/2023/03/biden-reportedly-will-propose-52-pay-raise-feds-2024/383762/
2. “Biden 2024 budget proposal: What's inside the plan to fund Medicare” Axios, 7 Mar. 2023, https://www.axios.com/2023/03/07/biden-medicare-proposal-debt-ceiling-talks
3. “Biden to deliver budget proposal, Jill Biden honors women at White House: 5 Things podcast” USA TODAY, 9 Mar. 2023, https://www.usatoday.com/story/news/nation/2023/03/09/biden-outline-budget-proposal-jill-biden-honors-women-5-things-podcast/11433858002/
4. “Biden's One-Sided Attack on Republican Budgeting” FactCheck.org, 8 Mar. 2023, https://www.factcheck.org/2023/03/bidens-one-sided-attack-on-republican-budgeting
5. “Biden's budget set to lay groundwork for high stakes battles ahead” CNN, 9 Mar. 2023, https://www.cnn.com/2023/03/09/politics/joe-biden-budget/index.html
