TL/DR –
President Joe Biden’s 2025 fiscal year budget proposal includes strengthening and safeguarding Medicare and Social Security. The $7.3 trillion proposal also calls for expanding benefits under Biden’s Inflation Reduction Act (IRA) of 2022, and rejects all proposals to cut Medicare and Social Security benefits or privatize Social Security. The budget seeks to extend the life of the Medicare Hospital Insurance (HI) Trust Fund permanently through increasing the Medicare tax rate on income above $400,000, closing existing Medicare tax loopholes, and directing revenue from the Net Investment Income Tax into the HI trust fund.
President Biden’s 2025 Fiscal Year Budget
President Joe Biden’s Medicare and Social Security strengthening efforts have been highlighted in his newly released 2025 fiscal year budget. These steps were previewed in his recent State of the Union address and mark the beginning of his re-election campaign.
The $7.3 trillion budget proposal, announced today (March 11), covers a wide range of priorities, including healthcare, child care, and education. It also includes calls for expanding benefits under Biden’s signature Inflation Reduction Act (IRA) of 2022.
Budget’s Impact on Divided House and Senate
The budget, in its current form, is unlikely to pass the divided House and Senate. However, it provides insight into Biden’s tangible objectives if he is re-elected.
The budget dismisses all proposals to cut Medicare and Social Security benefits and to privatize Social Security. “Americans have been working their whole lives, paying into Social Security and Medicare, and want to know they can rely on these programs when they need them,” said the White House in a budget statement.
Social Security Administration’s Trust Fund Reserves
The Social Security Administration’s (SSA) trust fund reserves, which supplement program income largely from payroll taxes, are facing a long-term shortfall. Without congressional action, this could result in a 20% cut in benefits to beneficiaries in 2034. The budget proposal asserts the administration’s commitment to work with Congress to strengthen Social Security without reducing benefits, extend its solvency by asking high-income taxpayers to contribute more, and improve financial security for seniors and disabled people.
Proposed Increases and Medicare Under the Budget Proposal
The budget proposes a $1.3 billion increase for the SSA to hire more customer service staff, invest in IT to process disability claims faster, and make phone services more accessible to seniors. It also seeks to permanently prolong the life of the Medicare Hospital Insurance (HI) Trust Fund by increasing the Medicare tax rate on income over $400,000, closing existing Medicare tax loopholes, and directing revenue from the Net Investment Income Tax into the HI trust fund.
Inflation Reduction Act Expansions
The budget also proposes extending the Medicare drug pricing negotiation program to include more drugs soon after they are launched, as well as extending the $2,000 out-of-pocket prescription drug cost cap beyond Medicare to the commercial market.
Under the IRA, insulin copayments are limited to $35 per month for Medicare beneficiaries. The budget proposal aims to extend this to all insulin-dependent patients.
The proposal also seeks to cap Medicare Part D cost-sharing at $2 a month on certain generic drugs meant to treat chronic conditions.
For a full copy of the 188-page budget, visit the whitehouse.gov site.
Read More US Economic News
Comments are closed.