Joe Biden to propose Medicare tax rate increase in 2024 budget plan

President Joe Biden will call on Congress to support his plans to protect and strengthen Medicare and Social Security programs when he travels to Philadelphia to unveil his 2024 ballot proposal later this week, the White House said Tuesday.

In his budget proposal, Biden will ask Congress to increase the Medicare tax rate from 3.8% to 5% on those who earn more than $400,000 per year in an effort to fund Medicare for the next 25 years.

In the speech, the president will continue to tout his efforts on manufacturing, infrastructure and clean energy across the nation, while working to manage the national debt and lower costs for families amid historic inflation, according to a statement from the White House.

“By asking those with the highest incomes to contribute modestly more, we can keep the Medicare program strong for decades to come,” the White House said.

Biden’s proposal would close a financial loophole that has allowed the nation’s highest earners to avoid taxes by claiming parts of their income as neither earned nor gained from investment.

The plan would also strengthen the government’s ability to negotiate lower prescription costs by expanding the number of drugs available through Medicare, the White House said.

Biden wants to expand the Inflation Reduction Act by adding commercial health insurers to a requirement that forced drug companies to pay rebates to Medicare whenever medicine prices rise faster than inflation.

Savings from these budget reforms would pour an additional $200 billion into Medicare’s Hospital Insurance Trust Fund over the next decade, the White House said.

Biden’s plan would save Americans billions of dollars as a result of lower out-of-pocket drug costs, including a $2 monthly cap on certain generic drugs used to treat chronic conditions. The plan also seeks to lower costs for behavioral and mental health services.

Biden has gone on the offensive in recent weeks, repeatedly accusing the GOP of wanting to put critical health care subsidies “on the chopping block” to balance the budget — making it a key campaign issue following a rousing State of the Union address in which the president accused Republicans of wanting to “sunset” Social Security and Medicare.

“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,” Biden wrote in an op-ed in The New York Times. “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.”

Biden’s budget proposal comes as U.S. lawmakers are debating the federal budget to avoid a potential default on the national debt while tension was also building with the Congress over Biden’s strategy to raise the debt ceiling.

During a Monday briefing at the White House, Press Secretary Karine Jean-Pierre claimed House Speaker Kevin McCarthy never showed up for talks with the president on the debt ceiling, as the speaker claimed he did in February.

“He never came to the table to negotiate on the debt ceiling,” she said. “That was not something that occurred. That is not something that’s happening. We’ve been very clear we’re not negotiating around the debt ceiling.”

She would not say whether there was still a chance for McCarthy to cut a deal with the president on possible spending cuts.

Jean-Pierre said she did not expect Biden to meet with McCarthy about the budget ahead of Thursday’s Pennsylvania speech, while emphasizing that the White House was in “constant communication” with Republicans on Capitol Hill and still waiting to see a budget plan.

“If Republicans want to have a real conversation about how to lower the debt, then he’s ready to listen. He’s ready to hear what they have to say,” Jean-Pierre said. “So far, their proposals have been to add $3 trillion to the debt, as you think about them giving a tax break or giveaways to millionaires and the rich and the wealthy, as they talk about wanting to cut Medicare, Social Security, Medicaid, ACA. That’s what they’re bringing forward.”

Jean-Pierre also addressed the possible expiration of continuous enrollment for Medicaid in April, when millions of Americans could stand to lose health insurance coverage.

“Clearly, you’ll see the president’s budget on March 9 that will speak to some of this,” she said without going into detail.

Previously, Biden has said that his budget plan would reduce the national deficit by $2 trillion over the next 10 years.

Jean-Pierre refused to speculate whether Biden had decided to make his budget announcement in Pennsylvania as part of a larger campaign strategy, but said the trip was simply “an opportunity for the President to talk directly to the American people” in a state that he considers a “second home.”

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