House Speaker Kevin McCarthy now says he thinks President Joe Biden is trying to “disrupt” debt ceiling negotiations by bringing proposals involving Medicare and Social Security back on the table.
“The president said ‘You can’t do anything with Medicare and Social Security,’ and now he wants to bring that into the fold,” McCarthy said of a proposal that would help the government save money by expanding the number of drugs that Medicare can negotiate prices for, building on a provision in the Individual Retirement Accounts (IRA).
“We all heard that from all of the people across the country, over and over,” he said before interrupting himself to talk to tourists “and so now he wants to bring that in? That seems like a place to try and disrupt the whole negotiations. Like trying to throw taxes in, now trying to start talking about Medicare? No. We gotta get it done.”
McCarthy also said he wanted longer spending, saying that “the country would be in better shape” if they were extended out.
“They’re working right now in the conference room there. We’re trying to make progress,” he said. “We’re hopeful that there’s 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 an interest in expanding Medicare drug price negotiation, which would raise additional revenue by allowing the government to negotiate the prices of more prescription drugs.
More background: The Inflation Reduction Act, which congressional Democrats passed and Biden signed into law last summer, makes several changes to Medicare that are aimed at saving senior citizens and the federal government money. The most notable is allowing Medicare to use its heft to negotiate drug prices, a longstanding Democratic goal that had previously not been allowed.
The law empowers Medicare to negotiate the prices of certain costly medications administered in doctors’ offices or purchased at the pharmacy. The Health and Human Services secretary will negotiate the prices of 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number rises to 20 drugs a year for 2029 and beyond. Only medications that have been on the market for several years without competition are eligible.
The White House and many Democrats, however, have been eager to expand the number of drugs subject to negotiation and bring them into negotiation sooner after they launch. This would also save the government more money, allowing lawmakers to plow the funds into other programs.
One way Biden would use the savings is to shore up a key Medicare trust fund. The proposal, unveiled just ahead of his budget plan earlier this year, calls for allowing Medicare to negotiate even more prescription drugs and raising taxes on those earning more than $400,000 annually. This would extend the solvency of Medicare’s hospital insurance trust fund, known as Part A, by 25 years or more, according to the White House.
Medicare’s trust fund will only be able to pay scheduled benefits in full until 2031, according to its trustees’ most recent annual report. At that time, Medicare, which covered 65 million senior citizens and people with disabilities in 2022, will only be able to cover 89% of total scheduled benefits.
It’s unclear what Biden is proposing for Social Security, which provides benefits to roughly 66 million people. Though Biden has promised to defend the entitlement from any cuts proposed by Republicans, his budget made no mention of it.
CNN’s Tami Luhby and Jeremy Diamond contributed to this report.
