President Joe Biden called Social Security and Medicare a “lifeline for millions of seniors” and spoke of the need to raise the U.S. federal debt ceiling, while also saying he wanted to ensure “the wealthy and big corporations begin to pay their fair share” during Tuesday night’s State of the Union address.
In his second such address, Biden referenced taxes 17 times to an audience of members of Congress, his cabinet and invited guests. He pointed to the legislative accomplishments of his first two years in office and repeatedly asked lawmakers to “finish the job” on additional priorities—including non-compete agreements and employment benefits like paid sick, family and medical leave.
“Let us commit here tonight that the full faith and credit of the United States of America will never, ever be questioned,” Biden said of the debt ceiling, currently set at $31.4 trillion. The debt ceiling was reached earlier this year, and the Treasury Department is currently using “extraordinary measures” to avoid issuing new debt, which it expects will keep the government funded at least until early June.
Biden noted that the debt ceiling was raised three times during the administration of former President Donald Trump without “preconditions or crisis.” He accused Republicans of wanting to hold “the economy hostage” over the debt ceiling, unless he makes major policy concessions to them.
Biden paired the debt ceiling with the Medicare and Social Security programs. He accused some Republicans of wanting to cut Social Security and Medicare and of using the debt ceiling as leverage to do so. Specifically, he claimed that Republicans wanted to “sunset” the benefits programs every five years, meaning they would have to be reapproved in five-year intervals.
Biden committed to opposing any attempt to cut Social Security or Medicare and said he would allow it, “Not today. Not tomorrow. Not ever.” His promise may be redundant, since his accusation that some Republicans intend to cut either provoked loud jeering from many Republicans in the chamber.
Regarding federal tax revenues, Biden said, “Corporations ought to do the right thing” and that he would propose to raise the tax to 4% from 1% “to encourage long-term investments instead.”
The 1% stock buyback tax was imposed by the Inflation Reduction Act passed last year.
Regarding non-compete agreements, Biden referenced a proposed rule from the Federal Trade Commission which would ban the use of the agreements in employment. Biden said that “30 million workers had to sign non-compete agreements when they took a job. … Not anymore. We’re banning those agreements so companies have to compete for workers and pay them what they’re worth.”
Non-competes are contracts, often required as a condition of employment, which require a new employee to legally commit to not work for an economic competitor for a period of time after the end of their employment. The FTC estimates that such a ban could raise wages by $300 billion.
The proposal could also have implications for the registered investment adviser firms some retirement advisories are acquiring to broaden wealth management capabilities.
Labor Secretary Marty Walsh, who reportedly will resign his post to become the next executive director of the NHL Players’ Association, was the “designated survivor” from the Biden administration who did not attend the event.
Tags: debt ceiling, Medicare, President Donald Trump, President Joe Biden, Social Security, stock buybacks