House Speaker Kevin McCarthy said today that he thinks President Joe Biden is trying to “disrupt” the debt ceiling negotiations by bringing proposals involving Medicare and Social Security back to the table.
“The president said ‘You can’t do anything about Medicare and Social Security,’ and now he wants to bring that to the fold,” McCarthy said of a proposal that would help the government save money by expanding the number of Medicare drugs can negotiate prices for, establishing a provision of Individual Retirement Accounts (IRA).
“We’ve all heard that from all the people all over the country, over and over again,” he said before interrupting himself to talk to the tourists “and so now he wants to bring that up? That seems a place to try and mess up the whole negotiation. Like trying to drop taxes, now trying to start talking about Medicare? No. We have to do it.”
McCarthy also said he wanted higher spending, saying “the country would be in better shape” if it were extended.
“They are currently working in the conference room there. We are trying to improve,” he said. “We hope there will be progress.”
The White House has said cuts to Social Security and Medicare are off the table in debt ceiling negotiations. But they have long telegraphed interest in expanding Medicare drug price negotiations, which would raise more revenue by allowing the government to negotiate the prices of more prescription drugs.
More background: The Inflation Reduction Act, passed by Democrats in congress and signed into law by Biden last summer, makes several changes to Medicare aimed at saving senior citizens and the federal government money. The most notable is allowing Medicare to use its weight to negotiate drug prices, a longtime Democratic goal that has never been allowed before.
The law gives Medicare the power to negotiate the prices of certain expensive drugs that are dispensed in doctors’ offices or purchased at pharmacies. The Health and Human Services secretary will negotiate prices for 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number will increase to 20 drugs a year for 2029 and beyond. Only drugs that have been on the market for years without competition are eligible.
The White House and many Democrats, however, are eager to expand the number of drugs subject to negotiations and bring them to negotiations as soon as possible after their launch. It would also save the government more money, allowing lawmakers to plow funds into other programs.
One way Biden will use the savings is to raise a significant Medicare trust fund. The proposal, unveiled before his budget plan earlier this year, calls for allowing Medicare to negotiate more prescription drugs and raising taxes on those earning more than $400,000 a year. It will extend the solvency of Medicare’s hospital insurance trust fund, known as Part A, for 25 years or more, according to the White House.
The Medicare trust fund will only be able to pay scheduled benefits in full until 2031, according to its most recent annual report to its trustees. At that time, Medicare, which covers 65 million senior citizens and people with disabilities by 2022, could only cover 89% of the total scheduled benefits.
It’s unclear what Biden is proposing for Social Security, which provides benefits to roughly 66 million people. Although Biden has promised to protect the right from any cuts proposed by Republicans, his budget does not mention this.
CNN’s Tami Luhby and Jeremy Diamond contributed to this report.
