The Biden administration on Wednesday released information on so-called student loan debt cancellation, which in reality redistributes the responsibility onto taxpayers, including those who already paid off their student loans or didn't even go to college.
During his announcement, President Joe Biden took the opportunity to tout a so-called relief as a campaign promise. When giving a non-answer as to how this will be paid for, he referenced claims about reducing the deficit.
Biden on canceling student debt:
— Townhall.com (@townhallcom) August 24, 2022
"I hear it all the time. How do we pay for it? We pay for it by what we've done." pic.twitter.com/s22OGx6gXY
Even CNN has taken issue with such claims from the president, and fact-checking sites have ruled that his repeated claims are "misleading."
While the president did not stay for questions, reporters shouted out some as he walked away. One included whether this was fair to those who had already paid off their debt, or didn't take out loans.
REPORTER: "Is this unfair to people who paid their student loans, or chose not to take out loans?"
— Townhall.com (@townhallcom) August 24, 2022
BIDEN: "Is it fair to people who, in fact, do not own multi-billion dollar businesses to see what these guys give them all a tax break? Is that fair?" pic.twitter.com/JHavRNc1hr
"Is it fair to people who, in fact, do not own multi-billion dollar businesses to see what these guys give them all a tax break? Is that fair," the president asked in response.
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White House Press Secretary Karine Jean-Pierre also refused to sufficiently discuss how the plan would be paid for, in her own ineloquent way, instead providing Fox News' Peter Doocy with a non-answer when he asked "how can the country afford such a massive handout."
DOOCY: "How can the country afford such a massive handout?"
— Townhall.com (@townhallcom) August 24, 2022
KJP: "We are doing this responsibly." pic.twitter.com/ZerwLIf44n
During an interview with Doocy, Education Secretary Miguel Cardona quietly confirmed that those who paid their student loan debt already will get no benefit.
The condemnation of this so-called cancelation, was swift, with many Republicans criticizing the move. It wasn't just Republicans, though.
Jason Furman, who was the chairman of the Council of Economic Advisors (CEA) under President Barack Obama, tweeted out a lengthy thread. He did not shy away from calling the move "reckless," as he highlighted inflation.
The White House fact sheet has sympathetic examples about a construction worker making $38K and a married nurse making $77,000 a year.
— Jason Furman (@jasonfurman) August 24, 2022
But then why design a policy that would provide up to $40,000 to a married couple making $249,000? Why include law and business school students? pic.twitter.com/463YMmCT9g
You can't use one baseline (interest payments suspended) to argue this will constrain demand & then a different baseline (interest payments restored) to describe the benefits. That is incoherent, inconsistent & indefensible cherry picking--I hope the White House doesn't do it.
— Jason Furman (@jasonfurman) August 24, 2022
There are a number of other highly problematic impacts including encouraging higher tuition in the future, encouraging more borrowing, creating expectations of future debt forgiveness, and more.
— Jason Furman (@jasonfurman) August 24, 2022
The stimulus is relatively small (a multiplier of ~0.1). So the inflation impact is likely to be about 0.2-0.3pp. That is $150-200 in higher costs for a typical household.
— Jason Furman (@jasonfurman) August 24, 2022
If the stimulus matched what advocates used to argue the inflation would be higher. https://t.co/8MrZ1G1FUM
Furman isn't the only Democratic economist to raise very real concerns with inflation. Larry Summers, who served as the Treasury Secretary under President Bill Clinton, also had tweeted his concerns.
Every dollar spent on student loan relief is a dollar that could have gone to support those who don’t get the opportunity to go to college.
— Lawrence H. Summers (@LHSummers) August 22, 2022
The worst idea would be a continuation of the current moratorium that benefits among others highly paid surgeons, lawyers and investment bankers.
— Lawrence H. Summers (@LHSummers) August 22, 2022
If relief is to be given it should not set any precedent, it should only be given for the first few thousand dollars of debt, and for those with genuinely middle class incomes.
— Lawrence H. Summers (@LHSummers) August 22, 2022
Summers had repeatedly warned this administration about inflation concerns with the so-called American Rescue Plan Act. Although he was in fact correct, his reward was to be gaslit by the White House.
When it comes to one of the last tweets in Furman's thread mentioned above, he's not the only Democrat to make such a point.
Finally, it's not obvious to me that this is reasonable for a President to do unilaterally. A number of lawyers (and political leaders) have argued inconsistent with the law. Even if technically legal I don't like this amount of unilateral Presidential power.
— Jason Furman (@jasonfurman) August 24, 2022
House Speaker Nancy Pelosi (D-CA) once acknowledged that the president does not have the authority to unilaterally take such action. Her statement that "people think that the President of the United States has the power for debt forgiveness" and that "that has to be an act of Congress," came just months ago, in April.
Pelosi, though, as is to be expected, has now changed her tune and is applauding the president's move, despite knowing he can't do such a thing.
PELOSI IN APRIL: "People think that the President of the United States has the power for debt forgiveness. He does not."
— Townhall.com (@townhallcom) August 24, 2022
PELOSI TODAY: Biden's move to cancel student debt "is a strong step in Democrats' fight to expand access to higher education." pic.twitter.com/zr3PRKHjk5
Others thought the move didn't go far enough.
Nina Turner is a progressive who served in the Ohio state legislature, and who attempted to run for federal office but has yet to win a primary. Student loan debt is a pet issue of hers, which she's tweeted incessantly about. As Mia highlighted in her fact-check, Turner even falsely claimed that "Student debt cancelation isn’t paid for by the taxpayers."
Turner also tweeted incessantly throughout the day on Wednesday, which included doubling down on her false claim about the burden on taxpayers, and demanding even more relief.
People can’t tell you how much student debt cancelation will raise your taxes because it’s not being paid for by a tax increase.
— Nina Turner (@ninaturner) August 24, 2022
That’s none of my business, though ????
PPP loans canceled: $700B
— Nina Turner (@ninaturner) August 24, 2022
Student debt canceled: $200B@POTUS can do better.
No, cancelation of $10k isn’t something to be “grateful” for.
— Nina Turner (@ninaturner) August 24, 2022
Cancelation ? forgiveness
Student debt is a trap and 45 million Americans were scammed into predatory loans.
Cancel all debt to free the 45 million Americans from the scam, then let’s fix the cost of tuition.
Why stop at $10,000? Why stop at $20,000? Cancel all student debt.
— Nina Turner (@ninaturner) August 24, 2022
CANCEL MEDICAL DEBT NEXT.
— Nina Turner (@ninaturner) August 24, 2022
Her pinned tweet from August 22 is also about the issue.
Canceling $10,000 in student debt when the average white borrower is $12,000 in debt, while Black women hold on average over $52,000 isn’t just unacceptable, it’s structural racism.
— Nina Turner (@ninaturner) August 23, 2022
A Tuesday statement from NAACP President Derrick Johnson also lamented how student loan debt affects black women. Johnson in part referenced that "President Biden’s decision on student debt cannot become the latest example of a policy that has left Black people – especially Black women – behind." He also preemptively bashed the president. "This is not how you treat Black voters who turned out in record numbers and provided 90% of their vote to once again save democracy in 2020," the statement added.
Wednesday's statement from Johnson also took credit for the ultimate number being $20,000 for some families. "President Biden's announcement today, cancelling up to $20,000 for Americans across many generations, takes us one step closer to the NAACP's ultimate goal of alleviating the burden of student debt. We've got a ways to go, but the NAACP is proud that we were able to push President Biden to exceed $10,000, bringing us closer to $50,000 and beyond," his statement began.
"#Studentloanforgiveness" is trending over Twitter as a result of the announcement, as is "Unfair," as users recognize the true nature of this move from the Biden administration, as well as "$300 Billion," as they highlight how much is being supposedly "canceled," but in reality is being redistributed.
