WASHINGTON — President Joe Biden campaigned for the White House on a plan to shore up Social Security finances over the next few decades and boost benefits for the lowest-earning retirees, all while raising taxes on people earning over $400,000 a year.
An independent analysis estimated that the idea would have immediately lifted 360,000 older people out of poverty.
That proposal has disappeared from Biden’s governing program, even as the program has become a focal point in a brewing battle over raising the country’s debt ceiling. The president has spent months warning that Republican lawmakers plan to gut Social Security and has positioned himself as the champion of the program that will protect benefits for generations of retirees.
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The Biden budget on Thursday proposed itemizing trillions of dollars in new federal spending programs, offset by tax increases on high earners and corporations. The White House billed one of those tax hikes as a way to extend the solvency of another popular retiree program, Medicare, by 25 years when combined with new money-saving efforts. government on prescription drug costs.
Yet, like Biden’s previous budgets, his latest proposal made no mention of tax increases or spending on Social Security, which is expected to deplete his trust fund in just over a decade. At that time, the government will have to borrow additional money or reduce pensioners’ benefits.
Biden’s 2020 campaign plan appears to be a victim of political messaging and considerations, including administration officials’ reluctance to blur what they see as a winning argument that makes the president the protector of a cherished agenda. and Congressional Republicans as his foil.
That stance is based in part on history: Presidents and White House candidates have struggled for decades to convince voters and lawmakers to change the agenda.
But some of Biden’s advisers also see a limit to the amount of tax increases the public is willing to stomach. The budget he released Thursday, for fiscal year 2024, includes about $5 trillion in plans to raise taxes on corporations and top earners, largely to help pay for big new federal programs to childcare, pre-kindergarten, paid vacations and other priorities he failed. pass while the Democrats controlled Congress. By adding another tax to that, Biden would risk sharply raising the top marginal tax rate for high earners.
Perhaps as a result, Biden and his aides went from saying his latest budget would show his commitment to strengthening the program to saying he would simply protect it.
“You will see that my budget will invest in America, cut costs, protect and strengthen Social Security and Medicare,” Biden said last month in Maryland.
When the president officially unveiled the budget in Philadelphia on Thursday, his message focused solely on protection.
“I guarantee you that I will protect Social Security and Medicare without any changes,” Biden said.
The president has proposed a series of changes to Social Security in the 2020 campaign, aimed at improving and stabilizing the program. The 12.4% payroll tax that helps fund the program applies to earnings up to about $160,000 per year. Biden has proposed lifting that cap for incomes over $400,000 a year, forcing high earners to pay significantly more payroll taxes.
His plan directed some of that new revenue toward extending the life of Social Security’s main trust fund, which is expected to run out in 2034. He directed the rest of the revenue toward expanding benefits. certain retirees, such as low-income workers, widows and widowers. Urban Institute researchers estimated that these increased benefits would immediately lift 360,000 seniors out of poverty and 2 million out of poverty by 2065.
“The Biden plan will protect Social Security for the millions of Americans who depend on the program,” Biden’s campaign team wrote on his campaign website.
The plan was a response to a broader challenge that economists and budget pundits across the partisan spectrum have increasingly sought to highlight: the growing struggle facing a broad cross-section of American workers to afford a stable and secure retirement.
To improve America’s retirement system, “the single most important policy change is to put Social Security and Medicare on a financially stable footing,” wrote two academic economists who have served in Democratic administrations, Martin N Baily and Benjamin Harris, in a new book, “The Challenge of Retirement.
Baily was the chairman of the White House Council of Economic Advisers under President Bill Clinton. Harris serves as assistant secretary of the Treasury under Biden and was the architect of his campaign economic platform, although he wrote his parts of the retirement book as a professor at Northwestern University. “The hardest policy change is also the most important: raising tax revenue from wages,” they write in the book.
Publicly, administration officials say they are protecting the program simply by not cutting it.
“I would love to be in the part of the debate where we can have serious discussions about the proposals,” White House budget director Shalanda D. Young told reporters Thursday. “The No. 1 threat to Social Security and benefits for people like my 94-year-old grandmother is those across the aisle who have said they want to cut benefits. That is why this budget takes the position that it is not on the table.
Budget hawks attacked Biden for not going any further. They said his inaction left the program vulnerable to a general cut in benefits of up to 20% if the trust fund ran out of money in 2034, as currently planned.
“By failing to suggest increases in Social Security revenue or future benefit adjustments and reforms in his budget, the president implicitly endorses the plan to cut benefits by 20% while claiming to be the protector of the program and attacking those who suggest we make changes,” said Maya MacGuineas, chair of the Committee for a Responsible Federal Budget in Washington.
Republicans have criticized Biden’s budget, saying he spends and taxes too much. They have refused to lift the nation’s statutory borrowing limit unless the president agrees to drastically cut federal spending.
But they’ve been largely silent about his lack of a Social Security plan, for good reason: California President Kevin McCarthy and other Republican leaders, under fierce attacks from the president, have vowed not to touch the program in the budget talks.
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