Biden and Scott Clash Over Social Security, Medicare

Plus: Half of Americans say they are worse off financially ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey We hit a tragic milestone on Thursday, as the death toll from the earthquake in Turkey and Syria has now topped 20,000 — and then quickly surged above 21,000, too. Here’s what else we’re watching. Biden at the University of Tampa (Reuters) Biden and Republicans Clash Again Over Social Security, Medicare President Joe Biden and Republicans are continuing their war of words over Social Security and Medicare. At an event in Tampa, Florida, on Thursday, Biden again hammered Sen. Rick Scott (R-FL) and others in the GOP for proposals that he says threaten those safety net programs, looking to capitalize on an issue that the White House reportedly sees as potent and beneficial in the runup to the 2024 elections. “We want this fight,” an unnamed senior White House official [told CNN]( ahead of the event. “We relish this fight.” The president and administration officials had looked to score political points ahead of last year’s midterm elections by focusing on a proposal by Scott that would require Social Security and Medicare to be renewed by Congress every five years — and they are clearly eager to make the most of the issue now that they have another opportunity to do so. That opportunity has arisen as the result of Republican outbursts after Biden, during his State of the Union address Tuesday night, mentioned GOP proposals that could sunset the safety net programs. Republicans jeered, and Biden went off script in response, looking to lock in a commitment from Republicans to not touch the programs even as they look to force spending cuts: “So folks, as we all apparently agree, Social Security and Medicare, off the books now, right?” Biden said. Just like that, the White House had a moment it could work with and a newly relevant foil it could play against. What advisors later described as a trap for Republicans had worked. “Strategists from both parties said the Republican outbursts during his address to Congress — and Mr. Biden’s real-time exchange about the fate of the entitlement programs with a handful of heckling lawmakers — instantly crystallized, on national television in front of millions of Americans, what Mr. Biden has been struggling to say,” Michael D. Shear reports in [The New York Times](. Talking tough in Tampa: As he did during his State of the Union address earlier in the week, Biden on Thursday used his speech to tout his legislative accomplishments, pointing to the Inflation Reduction Act’s allowing Medicare to negotiate certain drug prices and instituting a $2,000 annual limit on out-of-pocket prescription costs. He again called on lawmakers to extend a $35-a-month cap on the price of insulin to private insurers. Biden also criticized Florida for not expanding Medicaid under the Affordable Care Act. “Over 1.1 million people in Florida would be eligible for Medicaid if Governor DeSantis just said, 'I agree to expand it.' This isn’t calculus,” Biden said. “It’s time to get this done.” Then he turned to Social Security and Medicare. “Now, you may have seen, we had a little bit of a spirited debate at the State of the Union,” Biden said. As he did a day earlier in Wisconsin, Biden pulled out proposals from Sens. Rick Scott (R-FL) and Ron Johnson (R-WI). “I know that a lot of Republicans, their dream is to cut Social Security and Medicare. Well, let me say this: If that’s your dream, I’m your nightmare,” Biden said, joking, “By the way, that may be redundant. I think they already think I am.” “The very idea that the senator from Florida wants to put Social Security and Medicare on the chopping block every five years I find to be somewhat outrageous,” Biden said before pulling out a pamphlet to read from Scott’s plan. White House aides reportedly had placed copies of Scott’s plan on every seat for the Tampa event. Biden said his budget plan, due out next month, would lower the deficit by $2 trillion without cutting the major entitlement programs. “I will not cut a single Social Security or Medicare benefit,” Biden said. “In fact, I’m going to extend the Medicare trust fund for at least two decades.” Scott punches back: For as much as Biden seems to relish this fight, Scott seems to as well. The senator ran an ad calling on Biden to resign and sought to dispute Biden’s claims during a contentious morning appearance on CNN, arguing that he never intended to end Social Security and Medicare. Scott pointed out that, as a senator in 1975, Biden had introduced a bill that would have sunset budget authority for all federal programs after four or six years. And he tried to flip the script on Democrats. “Let’s remember, just a few months ago all Democrats voted and Joe Biden signed a bill to cut $280 billion out of Medicare,” Scott said, misrepresenting the savings that are projected to come from allowing Medicare to negotiate drug prices. Scott argued that those savings amounted to a cut. (“The law actually makes Medicare’s prescription drug program more generous to seniors while also saving them money,” CNN noted in a [fact check]( The White House pushed back hard. “Rick Scott is in overdrive to make himself the national poster-child for Republicans’ longstanding attacks on Medicare and Social Security benefits,” White House spokesperson Andrew Bates said in a statement. Bates told CNN: “Every time Rick Scott opens his mouth, he proves the president’s point. The man who got rich overseeing the biggest Medicare fraud in history is protesting too much – again.” The bottom line: Biden pledged to veto Scott’s plan if it ever gets to his desk, but there’s little chance of that. Few Republicans have backed Scott’s proposals, though the Republican Study Committee, a group of more than 150 House Republicans, put out a budget plan last year that included cuts to Social Security and Medicare for future beneficiaries. House Speaker Kevin McCarthy (R-CA) has publicly said he’d take Social Security and Medicare off the table as he looks to win spending cuts in exchange for raising the debt ceiling. The real bottom line: Budget analysts point out that Social Security and Medicare will need to be reformed if lawmakers want to avoid an abrupt cut in benefits. Quote of the Day: IRS 'Asleep at the Switch' “The failure to have identified and resolved this issue before the filing season suggests that someone, or everyone, was asleep at the switch.” − National Taxpayer Advocate Erin M. Collins, [writing]( Thursday about the failure of the IRS to provide guidance to the residents of 20 states on how to treat one-time payments intended to offset inflation last year. For now, the IRS is advising taxpayers to [hold off on filing]( their returns and wait for clarification. “The IRS has known for months that there is uncertainty about the tax treatment of these special state tax refunds or payments, and it has also known the answers may affect tens of millions of taxpayers. Yet to date, it has issued no specific guidance whatsoever,” Collins said. “Giving taxpayers a choice between waiting to file their returns and receive their refunds or filing returns now that the IRS may later determine to be inaccurate is not acceptable.” Some Wealthy Investors Are Avoiding Taxes With a Simple Trick: Report A rule created in 1921 requires an investor to wait 30 days between the sale and repurchase of a given stock if that investor wants to claim a loss for tax purposes on the initial investment. The so-called wash sale rule is intended to prevent the creation of financial losses that would allow investors to avoid paying income taxes simply by selling and then repurchasing shares in the same company during brief down periods in the stock market. According to a report from ProPublica this week, the wash rule is being skirted by wealthy investors with the assistance of major financial firms such as Goldman Sachs. The strategy is simple: Sell stocks in a given company for a loss and then buy back nearly identical shares in the same company soon thereafter. By simply switching between different versions of common stock, an investor can create losses through sales while retaining an interest in a company they want own over a long period of time. In an example provided by ProPublica’s Paul Kiel and Jeff Ernsthausen, one day in 2015 former Microsoft CEO Steve Ballmer sold shares in both Shell and BHP. On the same day, he purchased shares in Shell and BHP, but those shares were technically different versions of the company’s common shares, and thus avoided the wash sale problem. “Why would he sell and buy shares in the same companies on the same day?” Kiel and Ernsthausen write. “The answer is counterintuitive to the average person but obvious to a sophisticated investor: A loss, for tax purposes, is valuable; a big one can wipe out millions in potential taxes. Ballmer’s two-step process allowed him to use the loss to lower his taxes, while the near-simultaneous purchase meant he effectively hadn’t changed his investment.” Major investment firms provide advice and coordination on the strategy and maintain databases of stocks that are equivalents or near-equivalents for the purpose of tax loss harvesting. The numbers involved are enormous. “ProPublica estimates that from 2014 through 2018, Ballmer was able to generate tax losses totaling $579 million without changing his investment portfolio in a meaningful way,” Kiel and Ernsthausen say. “The tax savings from these losses amount to at least $138 million.” In another example, Jim Walton, an heir to the Walmart fortune, recorded years of short-term losses, part of a tax-loss strategy executed by Northern Trust. From 2014 to 2018, Walton became $10 billion richer, while reporting only $111 million in long-term gains — on which he paid no taxes, thanks to all of his losses. [Read the full ProPublica analysis here](. Half of Americans Say They Are Worse Off Financially: Poll Democrats are still celebrating President Biden’s feisty performance during his State of the Union address earlier this week, but a new poll suggests that millions of Americans may not be in much of a celebratory mood. According to [Gallup]( 50% of Americans say their personal financial situations are worse off than they were a year ago. The only time since 1976 that half or more of respondents reported such negative conditions was during the depths of the Great Recession in 2008-2009. At the opposite end of the spectrum, 35% of Americans say they are better off financially. That’s a relatively low reading, but one that has been touched or exceeded numerous times before. About 14% of respondents said their financial condition was about the same as last year. The results vary by income, with lower-income Americans being more likely to report being worse off. A majority (61%) of those reporting incomes under $40,000 say they are worse off, while a minority (43%) of those reporting incomes of $100,000 or more say the same. The bottom line: “High inflation, rising interest rates, and declining stock values in 2022 all likely took their toll on Americans’ financial situations,” Gallup says. “Lower-income Americans, who have consistently been most likely to report that higher prices are causing them financial hardship, are particularly inclined to say they are financially worse off.” News - [Biden, in Florida, Blasts What He Calls GOP ‘Dream’ to Cut Social Security]( – ABC News - [Biden Targets Top Florida Republicans DeSantis, Scott Over Health Care in Tampa Stop]( – Washington Post - [Biden’s Billionaire Tax Is ‘Dead on Arrival’ in Congress, Top Wall Street Backers and Democratic Strategists Say]( – CNBC - [Biden Mixes Doable, Aspirational Health Messages in Speech]( – Roll Call - [GOP Tries to Flip the Medicare Script]( – Politico - [Manchin 'Raising Hell' Over White House Handling of Marquee Dem Bill]( – Politico - [New ‘SALT’ Caucus Rejuvenates Efforts to Relieve Deduction Cap]( – Roll Call - [What Recession? Some Economists See Chances of a Growth Rebound]( – New York Times - [Mass Layoffs or Hiring Boom? What’s Actually Happening in the Jobs Market]( – Wall Street Journal - [Forget Hard or Soft Landing: Meet the Rolling Recession]( – Bloomberg Businessweek - [Pollution From Life-Saving Drugs May Add to Superbug Crisis, UN Says]( – Bloomberg Views and Analysis - [Republicans Are Angry at Joe Biden for Accurately Describing Plan to Sunset Social Security]( – Jim Newell, Slate - [Fact Check: Sen. Rick Scott Keeps Repeating a Debunked Claim About Biden and Medicare]( – Daniel Dale, CNN - [Rick Scott Isn’t Helping His Case on Social Security and Medicare]( – Steve Benen, MSNBC - [The Transformation at the Heart of Biden’s Middle-Out Economic Agenda]( – Nick Hanauer, American Prospect - [Biden’s Vision About How to Heal America]( – Nicholas Kristof, New York Times - [Congress’s U-Turn Has States Thinking About Giving Parents Cash]( – Amelia Thomson-DeVeaux, Five Thirty Eight - [President Biden Is Not Backing Off His Big-Government Agenda]( – Jim Tankersley, New York Times - [Federal Revenue Did Well Under the Trump Tax Cut]( – Sen. Mike Crapo (R-ID), Wall Street Journal - [Joe Biden Is Bernie Sanders]( – Daniel Henninger, Wall Street Journal - [We’re Probably All Wrong About Interest Rates]( – Allison Schrager, Bloomberg - [Putting America’s Debt in Its Place]( – Barry Eichengreen, Project Syndicate - [Older Americans Need More Protection From Covid]( – Faye Flam, Bloomberg Copyright © 2023 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](