President Biden’s decision to forgive somewhere around $10,000, as well as $20,000, in student loan debt for millions of Americans is completely paid for.
According to White House officials, as a result of a decline in the federal budget deficit, a claim raises the possibility that the entire cost of the strategy will simply be added to the existing national debt.
They Have Nothing To Say
The White House has been contacted by Fox News Digital many times over the last week about how it intends to pay for the college loan bailout or whether further tax increases would be required.
The White House now claims the fiscal consolidation that is already taking place has “completely compensated for” the gift.
Bharat Ramamurti, assistant head of the National Economic Council, said the amount of reducing the deficit that we are already on schedule to achieve this year more than covers the cost of it.
I hear Republicans complaining about $20,000 in student debt forgiveness. Funny, I didn't hear those complaints when Trump declared bankruptcy 6 times & had $287 million in loans forgiven by big banks. The GOP l-o-v-e-s socialism for the rich, rugged individualism for the rest.
— Bernie Sanders (@SenSanders) August 26, 2022
“We’re on schedule to cut the deficit by $1.7 trillion this year. That virtually translates to 1.7 trillion more cash entering the Treasury than leaving, compared with the previous year.”
“In line with the administration’s plan, we’re spending a piece of that — a very modest portion of it — to help middle-class people.”
According to analysts, the White House’s remarks and refusal to provide specific offsets for the student debt transfer, such as tax hikes or budget cutbacks, indicate the administration simply intends to add the money to the $726 billion federal deficit.
According to Marc Goldwein, executive policy director at the independent Committee for a Responsible National Budget, “they’re basically looking for whatever tale they can make that allows them to get aside from the truth that they’re making the country’s finances even worse.”
“The deficit will get worse as a result. There really is no way to skirt the issue.”
The Strange Numbers
Because Congress decided not to approve billions in an emergency coronavirus expenditure as it did at the onset of the epidemic in 2020, the deficit has decreased under Biden.
According to economists, the government is claiming the declining deficit offers them more money to spend on initiatives like student loan distribution.
NO QUESTIONS FOR KAMALA: VP Kamala Harris dodged a question about the administration's controversial student debt forgiveness plan. TONIGHT on "Hannity," @MonicaCrowley and @JoeConchaTV will tell you who's really going to pay!
— Sean Hannity (@seanhannity) August 31, 2022
However, this implies it won’t be used to reduce debt, leaving the bill to be paid by later taxpayers.
According to Brian Riedl, senior researcher at the center-right Manhattan Research center, “the metaphor is a relative getting into debt for a $100,000 medical crisis, purchasing a $50,000 sports car, then trying to claim it’s “independent” because they’re not trying to spend $100,000 a year on the medical crisis.”
Last week, Biden made plans to cancel $10,000 in student loans for those with annual incomes under $125,000.
As long as their salary falls below the $125,000 cutoff, Pell Grant applicants will receive $20,000 debt relief. No home or individual in the top 5% of income, according to administration officials, would profit from the move.