What to Know in Washington: Biden Eyes Tax Hike to Fund Medicare

President Joe Biden’s budget will propose hiking payroll taxes on Americans making over $400,000 per year and allowing the government new power to negotiate drug prices as part of an effort the White House says will extend the solvency of a key Medicare program for another quarter century.

“The budget I am releasing this week will make the Medicare trust fund solvent beyond 2050 without cutting a penny in benefits,” Biden said Tuesday in an op-ed published in The New York Times shortly before the announcement. “In fact, we can get better value, making sure Americans receive better care for the money they pay into Medicare.”

Photographer: Andrew Harrer/Bloomberg

Biden delivering remarks in Washington on Monday.

The president’s budget, which will be released on Thursday, proposes raising Medicare taxes from 3.8% to 5% on annual income above $400,000, and eliminating a loophole business owners and higher-earners can exploit to avoid additional taxes, according to a White House fact sheet. The plan would also help bolster Medicare reserves through some $200 billion in prescription drug reforms over a decade by allowing the program to negotiate costs on more medications, and sooner, after they come to market.

The Medicare portion of the budget plan was announced by the White House on Tuesday and reported earlier by the Washington Post. The moves are part of a concerted White House effort ahead of looming negotiations over the debt ceiling and government funding, where Republicans vow to seek deep cuts to federal spending.

Biden’s plan has little chance of becoming law, especially after Republicans took control of the House this year, but the proposal is an important signpost for negotiations over federal government spending, and it offers the president a chance to publicly outline his priorities. Read more from Justin Sink and Josh Wingrove.

Join Bloomberg Government’s budget experts on Friday for a deep dive into Biden’s budget request for fiscal 2024 and what it means with a divided Congress. Learn more here .

Also on Lawmakers’ Radars

CONGRESS’ SCHEDULE

• The House returns at 2 p.m. to debate five measures under suspension of the rules.
• The Senate convenes at 10 a.m. to vote on several judicial and Health and Human Services nominations.

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• Amid US-China tensions, Taiwanese President Tsai Ing-wen persuaded Speaker Kevin McCarthy (R-Calif.) to meet in the US due to security worries, the Financial Times reports. Read more
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GOP Subpoenas Former Homeland ‘Disinformation’ Board Director

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Elections, Politics & Probes

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White House Press Secretary Karine Jean-Pierre offered a dismissive response to Democrat Marianne Williamson’s long-shot 2024 presidential campaign, poking fun at the self-help author and spiritual adviser.

Newsom Says California ‘Done’ With Walgreens Over Abortion Pill

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Around the Administration

BIDEN’S AGENDA

• Biden has no public events scheduled.
• At 1:30 p.m., Press Secretary Karine Jean-Pierre holds a briefing.

US Bank Watchdog Urges Global Coordination on Crypto Oversight

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SEC Climate Reporting Rule to ‘Stay Within the Law,’ Gensler Says

SEC Chair Gary Gensler downplayed concerns that the agency’s climate reporting requirements for companies will be sidetracked by legal challenges from Republicans and industry opponents.

Noncompete Agreement Ban Comment Period Extended a Month

The Federal Trade Commission extended the public comment period by a month for its proposed rule banning employers’ noncompete agreements.

US Visa Hurdles Push More Companies to Relocate Foreign Talent

US employers are increasingly relocating employees abroad to hold onto key talent in the face of restrictive quotas on high-skilled foreign workers.

US Cheese Fears Rebrand as EU Claims Rights to Names Like Asiago

Cheese firms in the US are scared they’ll lose the ability to brand their products with terms like “parmesan,” “asiago,” and “havarti” as the European Union increasingly pushes for geographical indications.

Two Planes Experience Close Shave in US as Safety Incidents Rise

Two planes have yet again come within an uncomfortably close distance of each other in the US. The US National Transportation Safety Board said it’s investigating a Feb. 16 incident at Sarasota Bradenton International Airport in Florida.

To contact the reporter on this story: Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Michaela Ross at mross@bgov.com; Giuseppe Macri at gmacri@bgov.com