Among President Joe Biden's requests in his newly released 2025 fiscal year budget are calls for strengthening and protecting Medicare and Social Security, moves previewed in his State of the Union address last week and ones that help to kick off his re-election campaign.
The $7.3 trillion budget proposal, issued today (March 11), covers a broad range of priorities in key areas including healthcare, child care and education, and includes calls for expanding benefits under Biden's landmark Inflation Reduction Act (IRA) of 2022.
While the budget is unlikely to pass the divided House and Senate (at least in its current form), Biden’s agenda is a peek into what his administration says are tangible goals if he is elected to another term.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The budget rejects all proposals to cut Medicare and Social Security benefits as well as proposals to privatize Social Security.
“Millions of Americans have been working their whole lives, paying into Social Security and Medicare with every working day, and want to know that they can count on these programs to be there when they need them,” the White House said in a statement on the budget.
The Social Security Administration's (SSA) trust fund reserves – which supplement the program’s income largely from payroll taxes – help SSA pay full benefits. But these reserves face a long-term shortfall that, if Congress does not act to shore up the funding, will result in about a 20% cut in benefits to beneficiaries in 2034. Some lawmakers have called for cuts to the SSA program.
Under the budget proposal, the administration says it will work with Congress to strengthen Social Security without cutting benefits, extend its solvency by asking high-income taxpayers to pay their "fair share," and improve financial security for seniors and people with disabilities.
The budget proposes an increase of $1.3 billion in the SSA to hire more customer service staff, invest in IT to process disability claims faster and make phone services more accessible to seniors.
The proposal seeks to extend the life of the Medicare Hospital Insurance (HI) Trust Fund permanently by increasing the Medicare tax rate on income above $400,000, closing what the administration says are loopholes in existing Medicare taxes, and directing revenue from the Net Investment Income Tax into the HI trust fund "as was originally intended."
Inflation Reduction Act expansions
Other reforms called for in the proposal include an expansion of certain drug provisions under the IRA. These include the Medicare drug pricing negotiation program, which would be expanded 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 include the commercial market.
Under the IRA, insulin copayments are capped at $35 per month but only for Medicare beneficiaries. The budget proposal seeks to expand this to include all patients needing insulin.
The budget also proposed capping Medicare Part D cost-sharing to $2 a month on certain generic drugs meant to treat chronic conditions.
For a copy of the 188-page budget, visit the whitehouse.gov site.
RELATED CONTENT
-
Strategies to Optimize Your Social Security BenefitsTo maximize what you can collect, it’s crucial to know when you can file, how delaying filing affects your checks and the income limit if you’re still working.
-
Don’t Forget to Update Beneficiaries After a Gray DivorceSome states automatically revoke a former spouse as a beneficiary on some accounts. Waivers can be used, too. Best not to leave it up to your state, though.
-
Social Security Changes How Overpayments are HandledThe Social Security Administration announced a change to how overpayments are handled.
-
Minimum Wage Is Now $20 an Hour for California Fast Food WorkersThe new minimum wage for fast food workers in California took effect on April 1.
-
New List Out On Medicare Part B Drugs Eligible for RebatesSome Medicare beneficiaries may pay lower coinsurance rates from April 1 to June 30 for the drugs, HHS says.
-
Lawmakers: Nix Social Security Offsets For Seniors In Student Loan DefaultOffsetting Social Security benefits to pay for defaulted student loans can be devastating for some beneficiaries, lawmakers say.
-
What Experts See In Economic Signals For 2024Experts assess economic signals for 2024.
-
What's Going on with Social Security — and How Concerned Should You Be?A comprehensive look at what's going on with Social Security.
-
Retirees are Getting Into Camping — Here's How You Can, TooA guide to camping for retirees, as older Americans are increasingly trying out the unique time outdoors.
-
HHS Funding Secured As Major Government Shutdown AvoidedWith passage of the fiscal 2024 appropriations package, Medicare and Social Security are among the key agencies to receive funding through September 30.
