Sen. Joe Manchin, DW. Va., speaks to cameras about the reconciliation bill in the Hart Senate Office Building on Monday, Aug. 1, 2022.
Bill Clark | CQ-Roll Call, Inc. | Getty Images
Now that the United States has reached the debt ceilinglawmakers need to review the federal budget and find ways to make cuts, Sen. Joe Manchin, a Democrat representing West Virginia, said in interviews over the weekend.
But this should not include cuts to Social Security and Medicare benefitshe said.
“I have 60 percent of my population that only has Medicare and Social Security,” Manchin said. told “Meet the Press” on NBC on Sunday.
“You think I’m going to go down this path and put them in danger?” No,” he said.
In a separate interview on CNN’s “State of the Union” Manchin called for a key change to help shore up struggling Social Security funds — by raising the cap on payroll taxes used to fund the program.
“The easiest and quickest thing we can do is raise the ceiling,” he said, while limiting “unnecessary spending.”
How raising the payroll tax cap could help Social Security
In 2023, salaries up to $160,200 are subject to 6.2% tax for employees and employers that goes to social security.
A 1.45% health insurance tax is also paid by employees and employers, although there is no salary limit to these taxes.
Both programs face the prospect of a funding shortfall in the coming years if lawmakers do not act. Combined social security trust funds should run out in 2035date by which 80% of benefits will be payable, according to an annual report published in June.
The fund that covers Medicare Part A, which pays for inpatient hospital care and other services, will be able to pay full benefits until 2028, after which 90% of benefits will be payable.
“Social Security and Medicare are basically running out of money because we stop at a certain level where people pay into FICA,” Manchin said. (FICA stands for Federal Insurance Contributions Act and stands for US federal payroll tax.)
Other Democrats have also proposed raising payroll taxes to help bolster Social Security. Senators Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., Proposed to reapply payroll taxes for those earning over $250,000 as well as a host of other changes to consolidate the program. A separate bill to reform the program from Rep. John Larson, D-Conn., calls to enforce payroll taxes from over $400,000.
Republicans proposed program changes
Concessions can play a role in debt ceiling negotiations
However, the concern is that Republicans could demand concessions from Biden in exchange for raising or eliminating the debt ceiling.
The United States hit the debt ceiling on Thursday, leaving just months before it can default, Treasury Secretary Janet Yellen said. written in a letter to Congress.
“The concern is that they are ready to destroy the global economy, to plunge us into a recession or a depression, with their refusal to raise the debt ceiling in order to force these changes,” Freese said.
The White House has maintained that the president will not make concessions during the debt ceiling negotiations.
“As President Biden has made clear, Congress must manage the debt limit and must do so without conditions,” White House press secretary Karine Jean-Pierre said last week.