Praise and Inflation Warnings in Response to Biden’s Announcement on Cutting Student Debt
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Praise and Inflation Warnings in Response to Biden’s Announcement on Cutting Student Debt
The reaction was swift and varied.
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Praise
UMass President Marty Meehan, a former Democratic Congressman, said in a statement, “I commend President Biden for cancelling a significant portion of debt for student loan borrowers. This is a smart investment in young people who are doing all the right things. They have worked hard in school, are engaging in their communities, and are contributing their talents to confront the daunting challenges that our nation and planet face. It also remains critical that the administration and Congress support college affordability measures, such as Pell Grant increases, that will prevent debt from accumulating in the first place."
U.S. Senator Elizabeth Warren (D-MA) who has been a champion on the issue for years said, “Student loan debt has held millions of Americans back from starting a family, buying a home, saving for retirement, or creating their own businesses. With the President's action, millions of workers—educators; municipal employees; auto workers; food and retail workers; flight attendants; medical workers; care workers; and many more—will breathe a little easier knowing this burden will be lifted. Cancelling student debt will provide financial relief to the many Americans who have been paying back student debt for over 20 years and to seniors who have seen their Social Security checks garnished because they fell behind on their loan payments. Because Black Americans borrow more money to go to school, borrow more money in school and have a harder time paying their debt off after school, the President’s action will also help narrow the racial wealth gap in the United States among borrowers.”
“The bottom line is this: Millions of working people will have a chance to build a more secure economic future because of President Biden’s decision to cancel student debt,” she added.
Debt and Inflation Warning
But others warned that the decision will be damaging to the effort to control inflation and cut national debt.
Maya MacGuineas, president of the bi-partisan Committee for a Responsible Federal Budget said, "This announcement is gallingly reckless – with the national debt approaching record levels and inflation surging, it will make both worse. Policymakers have already spent $300 billion on student debt relief—none of it paid for, and this would add another $400 to $600 billion, again, none of it paid for. This action by the White House is completely at odds with their talk of deficit reduction. It could add twice as much to the deficit as was just saved from the Inflation Reduction Act, completely eliminating any deficit reduction and then some. With the stroke of a pen, the President undid a year's worth of work on the fiscal front.
Unfair
U.S. Senate Majority Leader Mitch McConnell blasted the decision, "Washington Democrats have found yet another way to make inflation even worse, reward far-left activists, and achieve nothing for millions of working American families who can barely tread water. President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt. This policy is astonishingly unfair."
"The median American with student loans already has a significantly higher income than the median American overall. Experts who studied similar past proposals found that the overwhelming benefit of student loan socialism flows to higher-earning Americans. Democrats specifically wrote this policy to make sure that people earning six figures would benefit. President Biden's inflation is crushing working families, and his answer is to give away even more government money to elites with higher salaries. Democrats are literally using working Americans’ money to try to buy themselves some enthusiasm from their political base," said McConnell.