Welcome to the weekend! Take a minute or two to read the story of Paris Davis, the Army veteran who was awarded the Medal of Honor by President Biden on Friday.
Here’s what else is happening.
How Biden May Try to Shore Up Medicare
The White House is set to release President Biden’s budget proposal for fiscal year 2024 next Thursday. The president has previewed some broad points, saying that the plan will reduce deficits by $2 trillion over 10 years and that it would do so in part by raising taxes on the wealthy and large corporations. Biden also has said that his plan will extend the solvency of the Medicare Trust Fund “by at least two decades.”
Some other details of Biden’s plan are likely to come out ahead of the official release. For example, the Tax Policy Center’s Howard Gleckman cites “two highly placed sources” as saying that the president may propose using revenue from the 3.8% Net Investment Income Tax (NIIT) imposed by the Affordable Care Act to shore up Medicare’s Part A Trust Fund, which is on pace to become insolvent by 2028. The tax applies to individual taxpayers with modified adjusted gross income of more than $200,000 or married couples making more than $250,000 a year. It covers income from interest, dividends, capital gains, rent and royalties, non-qualified annuities, and certain businesses.
Dedicating those revenues to Medicare would generate $500 billion for the program over the next 10 years, which would go a considerable way toward delivering on Biden’s promise of a 20-year extension. “[S]huffling NIIT revenues could achieve much of that goal without raising taxes, increasing beneficiary cost-sharing, or cutting payments to hospitals or other Part A providers,” Gleckman says. “It also would be a case of doing what many people thought the law did 13 years ago, but didn’t.”
The move, Gleckman adds, would do nothing to cut the deficit because it would just shift revenue from other programs. “Perhaps most important, it would fundamentally shift Medicare Part A from a program funded almost entirely with payroll taxes on wages to one financed with taxes on a much broader income base, at least for high-income households,” he says.
The bottom line: Gleckman predicts that congressional Democrats are likely to back Biden’s idea — but that may not be enough as “it still faces a tough slog in the Republican-controlled House.”
Number of the Day: $2 Million
Frustrated by the success President Biden has had framing Republicans as enemies of the nation’s primary social welfare programs for the elderly, a private group closely aligned with House Speaker Kevin McCarthy (R-CA) will spend more than $2 million on an ad campaign accusing Biden of wanting to cut Medicare.
Axios reports that the American Action Network, a conservative advocacy group, will run ads on television and online attacking the Biden administration’s effort to save $4.7 billion in the Medicare Advantage system by clawing back excessive charges made by private insurers. AAN will echo Republican charges that the effort to save money, along with a proposed rate increase, will result in cuts in services.
Most experts, though, say the Republican accusations are inaccurate. “Claims that this administration is cutting benefits or increasing premiums are a calculated mischaracterization,” a Health and Human Services spokesperson told Axios. "Our proposals will ensure stability for people who choose Medicare Advantage."
For more on the false accusations that have been described as “Mediscare,” see items at CNN, the Kaiser Family Foundation and the Committee for a Responsible Federal Budget.
The bottom line: There’s a difference between reducing Medicare costs and cutting benefits.
Quote of the Day
“I just think: 'Is there a better program? Is there a better way younger people can invest and have something for retirement?'”
– Sen. Joe Manchin (D-WV), in an interview with Fox Business on Thursday. Manchin said he would not discuss cutting Social Security and Medicare “for those people that are receiving and have been depending on it, that have worked hard and earned it,” but said that lawmakers also must look at “everything” to avoid automatic future cuts to entitlement program benefits. “You have to look at everything. How do you sustain what you have?" he said.
Manchin has been critical of the Biden administration on several fronts, prompting speculation that he might run for president himself. He has disparaged what he calls the administration’s “liberal policy agenda” and decried the White House’s insistence that it won’t negotiate over raising the debt limit. But the senator also said he disagrees with Republicans holding the debt ceiling hostage.
A spokesperson for the senator told USA Today that "Manchin’s record on protecting Medicare and Social Security is crystal-clear, and he reiterated his continued support for both programs when speaking to [Fox host] Neil Cavuto.” Still, the Republican National Committee saw enough reason to tweet out the Fox segment.
Another $400 Million in Military Aid for Ukraine
The Biden administration on Friday announced a new batch of military aid for Ukraine worth up to $400 million. The latest allotment pushes the total value of U.S. military aid provided to Ukraine to more than $32 billion.
The aid package, to be drawn from U.S. stockpiles, will provide thousands of artillery shells of various sizes, including the 155mm shells used by the more than 100 M-777 howitzers the U.S. has supplied to Ukraine, which are reportedly in heavy use as Ukrainian forces battle an attempted Russian advance near the city of Bakhmut.
The U.S. will also supply Ukraine for the first time with Armored Vehicle Launched Bridges, unarmed tank-like vehicles with folding metal bridges that allow tanks and jeeps to cross trenches and water obstacles. Combined with the equipment used to clear mines that is also part of the package, the mobile bridges could be used in a possible spring offensive against dug-in Russian forces.
The U.S. is also ramping up its training of Ukrainian soldiers. According to the Associated Press, the U.S. has nearly tripled the number of Ukrainians receiving training in Germany on equipment such as Bradley fighting vehicles and Stryker armored personnel carriers. An initial group of 600 completed a five-week course last month, and 1,600 soldiers are currently learning to use the new equipment.
Headline of the Week
From The Onion: “U.S. Adds $19 Trillion In Debt Attempting To Win Toy For Girlfriend From Claw Machine”
Send your feedback to yrosenberg@thefiscaltimes.com.
News
- Health Insurers Square Off With Biden Administration Over Medicare Payments – Wall Street Journal
- GOP Spends $2 Million Trying to Flip the Script on Medicare – Axios
- Government Pensioners Look to Elbow Into Social Security Talks – Roll Call
- The World Economy Is Doing Well—This Is Bad News for Central Bankers – Wall Street Journal
- Larry Summers Urges Fed’s Powell to Open Door to 50 Basis Points in March – Bloomberg
- Sorry, Fed, Most US Mortgage Rates Were Locked in During Pandemic Lows – Bloomberg
- Here Are the States Where Residents Will Pay the Biggest Share of Their Income in Taxes This Year – The Hill
- California Weighs $360,000 in Reparations to Eligible Black Residents. Will Others Follow? – Bloomberg
- The Tax Play That Saves Some Couples Big Bucks – Wall Street Journal
Views and Analysis
- How Democrats Got Away From ‘Third Way’ Politics – David A. Hopkins, Bloomberg
- Why Chips and Child Care Are a Poor Policy Mix – Catherine Rampell, Washington Post
- The Insulin Pricing Wars Are Just Getting Started – Charlotte Kilpatrick, New Republic
- America Desperately Needs a Bipartisan Pandemic Post-Mortem – Margery Smelkinson and Leslie Bienen, The Hill
- There Ain’t No Cure for Long Covidiocy – Dana Milbank, Washington Post
- How Ending Expanded SNAP Benefits Will Ultimately Cost Taxpayers – Bryan Samuels, The Hill
- To Fight Inflation, Fed Tightening Should Go Faster and Further – Jason Furman, Wall Street Journal
- Why Rate Hikes Haven't Affected the Economy More – Neil Irwin, Axios
- No Country for Alzheimer’s Patients – Wall Street Journal Editorial Board
- More Doctors Can Now Prescribe a Key Opioid Treatment. Will It Help? – Noah Weiland, New York Times