| Some Republicans are contemplating raising taxes — a move that once would have been a nonstarter — to help shore up the Social Security trust fund. But would the policy change have momentum? That’s the discussion underscoring the latest story from Steve Thompson in The Post’s newsroom. Let’s unpack it — and dabble in a little Medicare policy as well. THE NUMBERS - Social Security is the largest program within the federal budget, providing monthly cash benefits to 70 million people, to the tune of $1.7 trillion.
- The shift among some GOP lawmakers comes as Social Security’s retirement trust fund heads toward exhaustion. The fund is projected to run out of money in 2032, according to the Congressional Budget Office. Unless Congress steps in, benefits would automatically fall by about 22 percent.
- Closing the shortfall is estimated to require nearly $500 billion in new revenue or benefit cuts each year.
- To fund Social Security, there’s a federal payroll tax on wages up to a “cap” of $184,500 a year, with workers and employers each paying 6.2 percent.
- Removing the cap without increasing benefits for high-earning workers would close more than half the program’s shortfall, according to the nonpartisan group Committee for a Responsible Federal Budget.
The political lens: The potential fallout could be so large — and is barreling down so quickly — that the usual demands from Republicans to curtail benefits won’t be enough to close the gap, and could ultimately backfire. THE CONGRESSIONAL PLAYERS - House Appropriations Chair Tom Cole (R-Oklahoma) told The Post that higher payroll taxes should be on the table. He told Steve that he projects the political blowback from Social Security benefit cuts would be far worse than a comprehensive solution that includes raising taxes.
- Sen. Bernie Moreno (R-Ohio) has joined Democrats in supporting the lifting of the cap on income subject to the Social Security payroll tax, partnering with Sen. Elizabeth Warren (D-Massachusetts) on a plan.
- Rep. Lloyd Smucker (R-Pennsylvania) told Roll Call last week that he would support a tax change to help boost Social Security funds, adding that lawmakers should also consider means-testing policies to ensure that lower-income people receive more in benefits.
- Honorable mention: In 2010, Sen. Mike Crapo (R-Idaho), who leads the Senate Finance Committee, supported a debt-reduction recommendation plan that included raising the payroll cap, among other policies. His office didn’t respond to Steve (or me) when asked whether he still backs the policy change.
- Crapo’s Democratic counterpart on the panel, Sen. Ron Wyden (Oregon), said during a hearing last month that he wants to work on bipartisan legislation compelling billionaires “to pay their fair share through the payroll and income tax.”
Read the full story: “As Social Security fund runs dry, some Republicans say it’s time to raise taxes.” THE HEALTH CARE CONNECTION But Social Security isn’t the only program with a financing problem. As Steve’s story points out, Medicare is the second-largest federal program after Social Security, coming in at a cost of $1.3 trillion in 2026. - Medicare’s Hospital Insurance Trust Fund is used to help pay for benefits, including inpatient hospital stays, care at nursing facilities, hospice care and certain home health services. According to CBO, the fund will be exhausted in 2040.
- Social Security benefits generate revenue for Medicare. A majority of Medicare is funded through a separate federal payroll tax, which has no wage cap. However, roughly one-eighth of the Hospital Insurance Trust Fund comes from income taxes on Social Security benefits.
Why it matters: Social Security may be the first federal program to force Republicans to reconsider their opposition to tax increases. Medicare could be next. The issue of Republicans budging on their anti-tax bona fides has rankled Grover Norquist, the founder and president of advocacy group Americans for Tax Reform, who has long urged lawmakers to sign a no-tax pledge monitored by the organization. Per Steve’s story: | “ | When Republicans say no to tax increases, they win. When they say yes to tax increases, they lose,” Norquist said. “They don’t get spending cuts — at all. And, they get smeared in the next election.” | | - Grover Norquist, founder and president of Americans for Tax Reform | | | | But some Republicans are pushing back. | “ | I love Grover. But … you’ve got to deal with Social Security,” Cole said. “And believe me, you’ll have a lot bigger problem if it goes bankrupt than you’ll have keeping it whole, because people will feel cheated.” | | - Rep. Tom Cole (R-Oklahoma) | | | | What to watch: It’s a likely signal of the lobbying that’s to come should the proposals gain traction. The Food and Drug Administration wants to know: What’s it going to take to develop more plant-derived prescription drugs? There are just four FDA-approved botanical drugs on the market, including ones made out of green tea, the sap of a South American tree, birch bark and pineapple stems. Now the agency is asking the pharmaceutical industry and others to weigh in on what it can do to get more of these products through the development pipeline. It builds on a roundtable the agency held with the Reagan-Udall Foundation on the topic. “Botanical drug products represent a critical area where greater scientific development can unlock new therapeutic opportunities for American patients while maintaining the highest safety standards,” acting FDA commissioner Kyle Diamantas said in a statement. The request for information includes questions about challenges researchers face when developing botanical drugs, and what the FDA could do to speed up the work on these treatments. That could be a boon to a small group of companies already developing botanical drugs — products derived from plants, algae, fungi and other botanical materials to diagnose, treat, or prevent disease. Unlike conventional drugs built around a single active ingredient, botanical drugs can contain complex mixtures of compounds. Connecting the dots: There is a particularly interesting political backdrop for the cannabinoid companies. President Donald Trump has repeatedly promoted CBD, including directing regulators to “develop research methods and models utilizing real-world evidence to improve access to hemp-derived cannabinoid products.” Earlier this year, the Centers for Medicare and Medicaid Services launched a pilot allowing eligible seniors to receive certain hemp-derived products through participating providers. This action could bring the FDA into the fold. Among the cannabinoid products in the pipeline: - DeFloria, a partnership between Ajna BioSciences and Charlotte’s Web, is testing a full-spectrum cannabinoid drug being studied for irritability associated with autism.
- BRC Therapeutics is developing BRC-002, an
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