Don’t you love it when a president waves his magic wand and makes billions of dollars, or tens of billions of dollars, or hundreds of billions of dollars disappear?
The Wall Street Journal is dubbing the forgiveness of $10,000 in student loan debt for individuals making $125,000 a year or less “The Inflation Expansion Act” — a play on the name of the bill passed just last week that Democrats misnamed the “Inflation Reduction Act.” There is also going to be another extension of the moratorium on paying back the $1.6 trillion in student debt already owed.
Biden is expected to make the much-anticipated announcement today. The executive order by Biden will cost about $300 billion this year, and $330 billion over 10 years, according to the Penn Wharton Budget Model. The extension of the moratorium will add another $15-20 billion to the cost.
That’s far more than the $102 billion the Inflation Reduction Act purportedly reduces the deficit over 10 years starting in 2027. About 70% of the loan relief would go to borrowers in the top 60% of income distribution.
As for the loan-payment moratorium, what began in March 2020 as pandemic emergency relief now rolls on and on. The moratorium so far is estimated to have cost some $115 billion. Another four-month extension could cost $15 billion to $20 billion more.
There’s more to say about loan forgiveness if Mr. Biden announces it—such as he lacks the legal authority without an act of Congress; it would benefit the affluent at the expense of those who don’t attend college; and it would benefit the spendthrift over the responsible who repaid their loans or decided to go to a school that costs less. It’s vote-buying at its most raw.
And that’s the bottom line. Biden is going to forgive $10,000 in student loan debt per borrower because powerful Democratic Party interests are demanding it.
Joe Biden is giving the middle finger to Americans who didn’t go to college or were wise enough and industrious enough to pay for school without the benefit of taxpayer-guaranteed loans.
Related: Democrats Try to Explain How the Inflation Reduction Act [Sic] Will Lower Inflation
According to Fox News, “More than 43 million Americans have federal student debt, with almost a third owing less than $10,000 and more than half owing less than $20,000, according to the latest federal data.” That’s an awful lot of votes Biden is looking for.
There was lobbying for even more debt relief by Democrats right up to the last minute.
The frenzied last-minute lobbying continued Tuesday even as Biden remained on his summer vacation. Senate Majority Leader Chuck Schumer, D-N.Y., one of the loudest advocates in recent years for canceling student loan debt, spoke privately on the phone with Biden, imploring the president to forgive as much debt as the administration can, according to a Democrat with knowledge of the call.
In his pitch, Schumer argued to Biden that doing so was the right thing to do morally and economically, said the Democrat, who asked for anonymity to describe a private conversation.
Biden will probably have another shot at forgiving even more debt — perhaps even all of it. This will be the fifth moratorium on paying back student loans, dating all the way back to March of 2020. Whatever date Biden chooses to restart payments for loans is another deadline for deciding to cancel the whole shebang. The radical left of the Democratic Party will never give up on this issue.
There’s no effort by Democrats to reform the student loan system, no effort to make sure that the same problems which led to $1.6 trillion in student loan debt in the first place won’t happen again. That’s why it’s a virtual certainty that we’ll be revisiting this problem again before too long.
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