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Biden vows to save Social Security and Medicare in face of shortfalls, but offers few details

USA TODAY logo USA TODAY 9/27/2022 Maureen Groppe, USA TODAY
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WASHINGTON – President Joe Biden on Tuesday 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 were 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.

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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 instead spoke at the White House.
  • Biden accused Republicans of wanting to cut the programs without detailing his own past promise to fix the funding shortfalls. Instead, he focused on recent steps to reduce prescription drug costs for Medicare patients.
  • 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.

For Medicare, the eligibility age would rise, and the program would be turned into income-based subsidies for specific health plans.

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

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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.

On Medicare, an effort by Senate Democrats this summer to boost taxes on some high earners to shore up that program was not successful.

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.

"I can go to bed at night knowing that my out-of-pocket costs for all that I have is going to be affordable and predictable," Bob Parant, a Medicare beneficiary from New York who is dependent on insulin, said when he introduced Biden at Tuesday's event.

President Joe Biden gives Sen. Joe Manchin, D-W.V., the pen he used to sign The Inflation Reduction Act. © Drew Angerer, Getty Images President Joe Biden gives Sen. Joe Manchin, D-W.V., the pen he used to sign The Inflation Reduction Act.

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.

Republicans have also attacked Democrats for not using the nearly $300 billion the government is projected to save by negotiating drug prices to shore up Medicare’s finances.

What they are saying

  • "I’ll protect those programs. I’ll make them stronger. And I’ll lower your costs, to be able to keep them," Biden said Tuesday.

  • "We will not have as part of our agenda a bill that raises taxes on half the American people and sunsets Social Security and Medicare within five years," Senate Minority Leader Mitch McConnell, R-Ky., said in March.

  • "We are well past the time for talking points and partisan entrenchment. “ said Shai Akabas, director of economic policy for the Bipartisan Policy Center. 
  • "Unfortunately, the president used his speech to attack his political opponents on the issue as opposed to putting forward his own specific plan to secure Social Security, something he has failed to do over the course of his administration," said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget.

Want to know more?  Here's what you missed

Patients seek relief from drug prices: Will the Inflation Reduction Act deliver?

Bigger check: Social Security recipients could receive 8.7% COLA bump in 2023 as inflation soars

Social Security solutions: Can raising the full retirement age to 68 make up for its shortfall?

Find out more: What your Social Security benefits statement tells you, and what it doesn't

This article originally appeared on USA TODAY: Biden vows to save Social Security and Medicare in face of shortfalls, but offers few details

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