Source: Hot Air
If not for the Afghanistan withdrawal debacle, the policy he’s announcing today would be the lowest moment of his presidency.
It’s so unjust that it would have locked down my midterm vote for the GOP had Republicans proved themselves fit to govern by dispensing with Trump after January 6, as they should have.
We’ve written many times about the moral hazards of student loan forgiveness but never as economically as Mitt Romney did in this tweet:
Sad to see what’s being done to bribe the voters. Biden’s student loan forgiveness plan may win Democrats some votes, but it fuels inflation, foots taxpayers with other people’s financial obligations, is unfair to those who paid their own way & creates irresponsible expectations.
— Senator Mitt Romney (@SenatorRomney) August 24, 2022
Correct on all counts. This is in fact a bribe to Democratic-leaning voters, especially younger Democratic-leaning voters, to turn out this fall. Dems have increasingly become the party of educated professionals; a debt forgiveness plan that benefits only the highly educated isn’t far in spirit from a debt forgiveness plan that benefits only registered Democrats. It’s not as generous as progressives wanted but it’s plenty generous, with taxpayers who earn less than $125,000 or households that earn less than $250,000(!) eligible for $10,000 in debt relief.
And although details are scant at the moment, a reporter at WaPo says he’s heard that graduate debt is also eligible:
UPDATE: Am told by a reliable source that graduate debt ***IS*** included in the debt forgiveness plan.
Big decision. Will need to see final details.
I had previously reported WH was considering carving it out
— Jeff Stein (@JStein_WaPo) August 24, 2022
Romney’s also correct that the plan will fuel inflation. Putting ten thousand bucks back in the pockets of millions of American consumers is tantamount to injecting billions of dollars of new consumer spending into the economy. Biden and Joe Manchin spent the better part of the past month high-fiving each other for having passed the so-called Inflation Reduction Act; ironically, today’s bill is a de facto Inflation Expansion Act. And not only is it inflationary, it will undercut the gains made by the Inflation Reduction Act in reducing the deficit. That bill is projected to shrink the deficit by around $300 billion over 10 years. Student loan forgiveness is expected to cost around $300 billion *this year*.
NEW: As Biden weighs a student debt decision, Penn Wharton Budget Model has released its analysis of student loan forgiveness, estimating it will cost bet. $300-$980 billion, w/majority of relief going toward borrowers in top 60% of earners. More on the @TheTerminal.
— Nancy Cook (@nancook) August 23, 2022
Just last week Dems claimed they were reducing the deficit. The illegal student-debtor vote-buying scheme will add $330,000,000,000 to the debt. https://t.co/kfRXc9MSBl
— Kyle Smith (@rkylesmith) August 24, 2022
In other words, they took the long-term “savings” from Joe Manchin’s climate change bill and immediately used it to bail out their college-educated base, most of whom are at no risk of being sunk financially by having to pay back their student loans.
A select list of occupations where the average earner is be eligible for Biden’s loan forgiveness:
Aerospace engineer ($122,270)
Nuclear engineer ($120,380)
Chemical engineer ($105,550)
— Alex Griswold (@HashtagGriswold) August 24, 2022
Inasmuch as the savings from the Manchin bill don’t completely cover the cost of Biden’s new plan, Romney is right again that you and I and other taxpayers will be responsible for picking up the rest of the tab. And that means more than just loan forgiveness, as there are other planks to the program designed to make life easier for the college-educated.
In a tweet Wednesday morning, Biden said the amount of forgiveness will be higher for low-income borrowers who went to college on Pell Grants. Those who went to college on Pell Grants will receive $20,000 in student loan forgiveness.
Biden added that those with undergraduate federal loans can also cap their payment at 5% of their monthly income.
Years ago I was fortunate enough to find myself in a position to pay off the balance of my student loans, which, as I recall, amounted to something like $25,000. I could have used that money for a car, a downpayment on a home, or any number of other vital life necessities. Instead I foolishly fulfilled my obligation to Uncle Sam, a burden from which the beneficiaries of today’s policy are being relieved for no discernible reason whatsoever apart from the fact that Democrats are worried about the midterms and hope that $10,000 will convince college-educated voters to turn out and say thanks. I hope the party is prepared to have this scene play out again many, many, many times at Democratic townhall events in the months to come:
“I’ve saved all my money. [My daughter] doesn’t have any student loans. Am I going to get my money back?”
Elizabeth Warren: “Of course not.”
“I worked a double shift…you’re laughing at me…we did the right thing and we get screwed.”pic.twitter.com/xGWKOZi9av
— RNC Research (@RNCResearch) August 24, 2022
Finally, Romney is of course right that the new policy will create unrealistic expectations. Because there’s no reason to forgive the loans of current debtors but not past or future ones, college students in years to come will demand equal treatment by having part of their debt liquidated too. Universities will doubtless anticipate that and raise tuition, expecting that kids and their families will be more willing to absorb higher education expenses in the belief that some of those expenses will eventually be forgiven. In fact, per CNN, the mountain of debt that already exists is so enormous that Biden’s allegedly one-time-only forgiveness plan will barely make a dent in it long-term: “There is currently $1.6 trillion of outstanding federal student loan debt. The amount of outstanding debt would return to that level in just four years after $10,000 per borrower was canceled, according to the Committee for a Responsible Federal Budget.”
You know what the strangest part is? Given how Democrats’ political fortunes have improved over the past two months, this bribe has never been less necessary than it is right now. Roe was overturned; gas prices have dropped; the last jobs report was stellar; and the party just delivered on a climate-change bill that its base desperately wanted. Inflation has momentarily stalled out and could be in decline by next month. Add all of that up and it was enough to turn a swing district blue in New York last night that practically everyone thought would go red. So now here comes Joe Biden to extend not one but two middle fingers to America’s working class by deciding that college loans uniquely warrant special generosity from the U.S. government.
Oh, and if that’s not enough, the new policy is very likely illegal.
The whole scheme is genuinely outrageous. The GOP should make it a staple of their ads this fall, assuming they’re not going with a “wall-to-wall inflation” strategy. Democrats have traditionally been the party of class warfare but Republicans would be nuts to pass up an opportunity like this, especially in light of the gains they’ve made with blue-collar voters in the Trump era. Charles Cooke:
It seems so arbitrary. Why does Biden not want to do the same thing for loans on trucks owned by plumbers? Why not for mortgages — which, given how heavily it subsidizes them, the federal government clearly thinks are worthwhile? Why not for credit cards or auto payments or mom-and-pop credit lines? The answer, I’m afraid to say, is disgustingly classist: Because Joe Biden and his party believe that college students are better than everyone else. Because Joe Biden and his party believe that college students are of a finer cut. Because Joe Biden and his party prefer college students to you, and they think that those students ought to be rewarded for that by being handed enormous gobs of your money.
Electricians, store managers, deli workers, landscapers, waitresses, mechanics, entrepreneurs? Screw ’em. Sure, college graduates make more money than non-graduates, and their unemployment rate is lower, too. But non-graduates don’t have access to the president, so they don’t matter. They’re tradesmen, the riff-raff, the great unwashed. They’re background noise, dirty-handed types, second-classers. They don’t deserve $10,000 in debt reduction. What would they even do with it? Go hunting? Give it to their church? Their role is to subsidize the superior people, and the superior people go to college.
A party that can’t win with a message like that when it already has high inflation as wind in its sails is completely hopeless. Maybe this is the moment the red wave, which looks for the moment to have slowed, starts to gather again.
Update: Ah, and here’s the cherry on top of this sh*t sundae.
This is bullshit legal reasoning, but it’s especially bullshit legal reasoning when you remember that the Biden administration (correctly) ended Title 42 in May on the grounds that the pandemic was over. https://t.co/DjA0TeDj1p
— Charles C. W. Cooke (@charlescwcooke) August 24, 2022
Update: Tribe teaches at Harvard. He’s celebrating a bailout of Harvard Law students, among the most elite professionals on planet Earth, any one of whom could land a high-paying job virtually at will.
Good news for thousands of my former students. I’m grateful on their behalf, Mr. President. https://t.co/FzmvcQNkli
— Laurence Tribe (@tribelaw) August 24, 2022