Jim Hartman: Biden’s Vote-Buying Scheme: Cancel Student Debt
A Quinnipiac poll in April found that while just 33% of all voters approved of Biden’s job performance, it was even worse among voters ages 18 to 34, an anemic 21% approval.
Young people have soured on Biden, but Democrats are hoping to buy themselves political relief before the midterm elections. Democrats plan to bribe them at the polls.
This is the backdrop for a new push to write off student loan debt. Millions of borrowers can’t or won’t repay their loans, so Biden says he could forgive their debt.
Taxpayers who have paid off their loans or who have not had a college education will pay instead.
The federal government has postponed student loan repayment seven times since the start of the pandemic; no one has been required to repay a student loan since March 13, 2020. Interest rates on these loans during this period fell to zero and collections on delinquent loans ceased.
This reprieve has cost the government $100 billion and counting – money unappropriated by Congress. Now Democrats want Biden to compound the damage to taxpayers and the Constitution by canceling the loans by presidential decree.
Republicans have accused Democrats of using debt relief as a grossly irresponsible game for votes.
“Desperate polls call for desperate action: Democrats considering forgiving trillions in student loans,” tweeted Sen. Mitt Romney (R-Utah). “Other bribe suggestions: Cancel car loans? Cancel credit card debt? Forgive mortgages?”
About 40 million people owe about $1.6 trillion in federal student debt. Most borrowers do not need relief, but much of it is concentrated on a relatively small proportion of borrowers who attended graduate school or were in medicine or law. This is where the big sales exist.
Elizabeth Warren, Chuck Schumer and other far-left progressive Democrats are urging Biden to forgive $50,000 in student debt for every student borrower.
Biden campaigned in 2020 to cancel $10,000 in student debt. He indicated a willingness to compromise between the two.
The tax difference between these two proposals is significant. Canceling up to $50,000 of debt would cost around $950 billion. That’s more than the United States spends annually on national defense.
The $10,000 debt cancellation, while more modest fiscally, still comes at an estimated cost of $321 billion, higher than any pre-COVID domestic spending bill. This would be done without Congress appropriating the money for it.
There is also a problem of fairness. About 60% of Americans have a college education. It also means that 40% don’t, including plumbers, truckers and construction workers. Are we really going to tax them to cancel the debt of doctors, lawyers, PhDs and masters?
And what about people who have neither taken on debt nor repaid their debt?
If Biden goes ahead with his plan to cancel $10,000 in student debt, he would transfer $321 billion directly to a small number of recipients, enriching the already wealthy.
It is a political convenience for the benefit of a young segment of the electorate to ensure that they vote in November. This is done at the expense of American taxpayers.
Biden is proposing to unilaterally write off student debt — without congressional action. He originally said he had no legal authority to write off large-scale student debt.
“I don’t think I have the authority to do that by signing with a pen,” Biden said last year.
A legal analysis by Charlie Rose, the lead attorney for the Obama administration’s Education Department, predicts that Biden’s scheme will be struck down in court.
Even Nancy Pelosi is clear that Biden lacks the constitutional authority for broad debt forgiveness. This requires an act of Congress, she said.
Canceling Biden’s student debt seems more political ploy than plan — an election-year gimmick.
Email Jim Hartman at [email protected]