Joe Biden revealed plans to expand Medicare Tuesday, daring Republicans to renege on their promise during the State of the Union address not to cut funding for the program.
The president unveiled part of his budget, the full text of which is due out Thursday. Although his plan is not binding for Congress, it comes as lawmakers scramble to agree on a federal budget before the United States defaults on its debt in July.
Biden’s plan would extend Medicare into the 2050s, he explained in an op-ed in The New York Times. His budget would increase the Medicare tax rate to 5 percent from 3.8 percent on people who make more than $400,000 a year.
It would also let Medicare negotiate prices for a wider range of prescription drugs, an expansion of part of the Inflation Reduction Act. Negotiating drug prices would reduce the federal deficit by $200 billion, he said, which would then be invested back into the Medicare trust fund. Doing so would extend the program’s life by 25 years.
“These are common-sense changes that I’m confident an overwhelming majority of Americans support,” Biden wrote in his op-ed.
But “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,” he warned. “The only winner under their plan will be Big Pharma.”
Republicans have long wanted—and tried—to cut social welfare programs. GOP lawmakers are currently threatening to hold the debt ceiling hostage until the federal budget is reduced, and Social Security and Medicare are on the chopping block.
Biden scored a big win during the State of the Union when he appeared to get Republicans to agree not to cut funding for Medicare or Social Security. Republicans have since tried to make it seem as if they never intended to gut the entitlements programs, despite widespread evidence to the contrary. His latest plan to expand the programs is a cheeky dare to the GOP.
But if the budget battle drags out too much longer, it will spell serious trouble for the United States. The government hit the debt ceiling in January, and Treasury Secretary Janet Yellen has warned that if the cap isn’t increased, the U.S. will default on its debt by the summer.
If that happens, the U.S. government won’t be able to make payments to Medicare or Social Security, nor will it be able to pay military salaries. Defaulting on the debt could also shock the economy, both domestically and abroad.