On Tuesday, the White House unveiled its plan to increase the Medicare net investment income tax on people earning over $400,000 from 3.8 to 5 percent.
The plan would also expand on the new rules in the Inflation Reduction Act allowing Medicare to negotiate the cost of prescription drugs.
The cost of health care is skyrocketing and Medicare is spending money much faster than anticipated, fueling concerns that without intervention, the federal program could become insolvent quickly.
“This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come. My budget will make sure the money goes directly into the Medicare trust fund, protecting taxpayers’ investment and the future of the program,” Biden said in an op-ed for The New York Times.
Biden is set to release his full 2024 fiscal year budget Thursday. The president’s budget is always an aspirational document, existing mainly for messaging. This year, Biden has been ramping up his attacks on Republicans, seeking to highlight the idea of GOP support for cutting entitlement programs ahead of a likely 2024 reelection bid.
Congress holds the power of the purse, and Republicans — and even some conservative Democrats — are likely to reject any tax increases. To date, House Republicans have not come out with their own plan, though it’s widely expected to slash federal spending on health care and other programs in an effort to balance the budget.
Senate Minority Leader Mitch McConnell (R-Ky.) stated Biden’s measure “will not see the light of day” thanks to the GOP-controlled House.
But passing his own budget isn’t really the point. Biden’s goal is to create as much political daylight as possible between himself and Republicans.
