Student Loan Debt Forgiveness Could Make for Long Hot Summer
WASHINGTON — A trial balloon floated by the president during a wide-ranging meeting with members of the Congressional Hispanic Caucus could become the latest point of contention between the White House and Republicans on Capitol Hill.
During a Monday meeting with seven members of the caucus, the president obliquely suggested he’s considering forgiving some student loan debt and further extending the federal moratorium on repayments.
Such a decision would impact many if not most of the 43 million Americans currently holding outstanding student loan debt estimated at $1.6 trillion.
After the Oval Office meeting, Rep. Tony Cárdenas, D-Calif., who was in attendance, said he specifically asked the president to extend the moratorium on debt payments through the end of the year, instead of letting it expire Aug. 31.
Biden, Cárdenas said, responded with a smile.
“‘I’ve extended in the past, and you’re going to like what I do next,’” he quoted the president as saying.
Cárdenas said he then asked about forgiving at least $10,000 in debt for each student, which he said the caucus believes Biden can do using executive powers, avoiding Republican opposition.
“‘Yes, I’m exploring doing something on that front,’” Cárdenas said, again quoting the president. “‘You’re going to like what I do on that as well.’”
White House Press Secretary Jen Psaki was a bit more muted in her briefing with reporters on Tuesday, saying the president merely reiterated that he’ll make a decision on the repayment moratorium before it expires.
She also said Biden “is looking at other executive authority options he has to bring relief to people who have student loans.”
If Biden did act in the manner Cárdenas described, it would be something of a win for progressives in the House who have been pressing Biden to fulfill a 2020 campaign promise that as president he would cancel up to $10,000 in debt per student.
However, a number of Democrats fear providing loan relief to students who attended expensive private universities would simply be providing Republicans with an easy campaign target ahead of what is already sure to be a hotly contested election for control of Congress.
Student loan forgiveness on the scale the president appeared to be suggesting is a nonstarter with Republicans and congressional budget hawks, particularly at a time of huge federal deficits.
Some began unloading on the president on Wednesday, including two lawmakers who have long been willing to reach across and come up with pragmatic answers to the nation’s needs.
“Desperate polls call for desperate measures: Dems consider forgiving trillions in student loans,” Sen. Mitt Romney, R-Utah, tweeted angrily Wednesday. “Other bribe suggestions: Forgive auto loans? Forgive credit card debt? Forgive mortgages? And put a wealth tax on the super-rich to pay for it all. What could possibly go wrong?”
In the House, Rep. Rodney Davis, R-Ill., accused the president of “Catering to the Radical Left.
“This is taxing the poor and middle class to give to the rich. Just another example of Biden and his cabal of rich liberal elites waging a war on working class Americans,” Davis tweeted on Wednesday.
Also weighing in Wednesday was the Committee for a Responsible Federal Budget, a fiscal watchdog group based in Washington.
The organization has estimated that cancellation of $10,000 per borrower would cost roughly $250 billion, cancellation of $50,000 per borrower of debt would cost about $950 billion, and full cancellation would cost roughly $1.6 trillion.
“This cancellation would be on top of the current repayment pause and other targeted cancellation policies, which will have already cost the federal government at least $150 billion,” the committee said in a release on Wednesday.
“Student debt cancellation may be an extremely appealing political talking point, but it is not good policy. It is costly, inflationary, poorly targeted, and fails to address the root problems in our higher education financing system,” said Maya MacGuineas, president of the committee, in a written statement.
“Full debt cancellation would be a massive handout to rich doctors and lawyers, would worsen our inflation crisis, and would cost almost as much as the entire 2017 tax cuts,” she continued. “Even partial debt cancellation would be costly, regressive, and inflationary. Forgiving $10,000 per person of debt would cost as much as universal pre-K or a full extension of the expanded [Affordable Care Act] subsidies.
“Either the president is serious about reducing deficits and getting inflation under control, or he is not. The White House can’t have it both ways. We need to be focusing on a serious and effective agenda that prioritizes sound policies, not poorly targeted political giveaways,” MacGuineas concluded.
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