As an announcement day is set regarding Biden’s decision on student debt relief, staunch progressive Ben Ritz wrote an opinion piece in The Hill explaining why it is not a good idea to cancel student debt. Ritz is not just an ordinary progressive; he is the Progressive Policy Institute’s Center for Funding America’s Future director.
Biden plans student debt relief announcement Wednesday.
— unusual_whales (@unusual_whales) August 23, 2022
In the opinion piece, Ritz mentioned that Biden is under “tremendous pressure.” from the far-left “activists” to cancel at least $10,000 of debt per borrower. Ritz seems to be in the common-sense camp of the progressive base. He lists the six reasons Biden should not cancel the debt by executive order but instead “develop a plan to resume payments in a timely manner.”
The first point is that “Mass debt cancelation would undermine the Inflation Reduction Act.” He explains:
“Canceling up to $10,000 of debt per borrower who earned less than $150,000 last year would squander most of the IRA’s near-term savings and thus its inflation-fighting potential. Such a move would be especially problematic since Congress already passed legislation increasing deficits by several hundred billion dollars last month. With inflation finally starting to moderate, now is not the time to reverse hard-won progress.”
The second point Ritz makes is, “Canceling debt for most borrowers is a giveaway to affluent elites – paid for by workers.” This same argument was made by Senator Amy Klobuchar (D-MN) during the Democratic primary debates. For a base who wants to stick it to the “top one percent,” this proposal would benefit them. Ritz explains:
“Although the administration may think that limiting debt cancelation to borrowers who earned less than $150,000 last year helps limit giveaways to the wealthiest, it’s still a regressive transfer of wealth. Many people who fell under the income limit last year will still have lifetime incomes far above average, such as a recent law or medical school graduate who is just beginning their career.”
His third point is that “Student debt cancelation distracts from the real problem of college affordability.” If student debt is canceled, even if $10,000 per borrower is canceled, future students will think they can take out thousands of dollars of student loans, which will be forgiven. Instead, the Biden administration should work to see how to make universities more affordable. Ritz notes:
“The debate around student debt cancelation has sucked all the oxygen away from solutions that would address the underlying problem of college affordability for the entirety of Biden’s term. If the president cancels debt for previous borrowers without offering an actionable plan to prevent future students from ending up in the same position, he is merely kicking the can down the road. Doing so may even worsen the problem, as future borrowers become less concerned about taking on debts they believe will ultimately be forgiven and universities take advantage of the dynamic to raise tuition prices even higher.”
Ritz’s fourth point is, “Mass debt cancelation by executive order sets a dangerous precedent.” He elaborates:
“When Congress created the student loan program in 1965, it gave the executive branch discretion to offer targeted debt forgiveness to borrowers facing specific distress, such as those who have been defrauded. Never did those lawmakers imagine that a president would abuse this authority by indiscriminately giving a $10,000 handout to all borrowers regardless of need or personal circumstance. If President Biden attempts to spend over $200 billion of taxpayers’ money without explicit approval from their representatives in Congress, and the courts uphold the move, they open the door for future presidents to usurp the power of the purse and unilaterally spend trillions more down the line.”
His fifth point is that “Student debt cancelation is bad politics.” Ritz highlights the unpopularity of canceling student debt.
“If canceling student debt were good policy and good politics, Congressional Democrats could have at least attempted to include it in the budget reconciliation bill they just passed through a party-line vote. They didn’t, because it isn’t: only 13 percent of Americans currently carry any student loan debt, and they have better income and job opportunities than the workers without a degree who will bear the costs. The move is likely to backfire with the overwhelming majority of workers who lack college degrees and suburban voters concerned about inflation and government overspending.”
Ritz also mentioned that the “activists” would not be happy with $10,000, as they would push for $50,000 in cancellation. As we know, the far-left will never settle, compromise, or be satisfied with legislation, no matter how many trillions of dollars are being spent on the taxpayers’ dime.
Ritz’s sixth point states, “There are better tools available to help struggling borrowers.” He suggests:
“Biden can continue providing carefully targeted relief and work to expand and reform income-driven repayment programs that directly tie debt cancelation to a borrower’s ability to pay. But the more debt that is rightfully canceled through these mechanisms, the clearer it becomes that there is little justification for canceling the remaining balance.”
“But with unemployment at its lowest level in modern history, there is no good reason to continue a freeze originally intended to support the economy during the darkest days of the pandemic beyond that time — or to pair it with additional debt cancelation for the vast majority of affluent borrowers who don’t need it.”
Of course, the argument is that why should hard-working taxpayers pay for someone else’s debt? Especially when many former college students who took out debt already paid off their debt, how is it fair to them or anybody else? What about medical debt? If we cancel student debt, it makes sense to cancel medical, too, right? But that will not benefit the Democrats politically among progressives. This was a campaign promise that Biden is being forced to keep; however, voters will remember it in November and elect a GOP majority in the House and Senate.
Forgiving student loan debt will cost between $300 billion and $980 billion over 10 years, according to a new analysis published in Bloomberg.
— unusual_whales (@unusual_whales) August 23, 2022