President Biden should rule out student loan pardon for the White House’s next annual budget proposal, despite pressure from Progressive Democrats to write off up to $ 50,000 in debt per borrower.
The Washington Post reported on Friday that White House officials left key Biden campaign promises outside of their upcoming budget proposal, including canceling large amounts of student debt, as the administration focuses on the attempt to adopt what has already been introduced. Biden has proposed nearly $ 4 trillion in new spending to renovate the country’s infrastructure and significantly expand the social safety net of public funds, all paid for by a slew of new taxes on wealthy Americans and businesses.
WHAT IS BIDEN’S NEW $ 1.8T TAX AND EXPENDITURE PLAN?
“The president’s budget will focus on advancing the historic legislative agenda he has already proposed for this year,” Rob Friedlander, spokesperson for the White House budget office, told The Post. “The budget will not propose any other new initiatives, but will paint a comprehensive picture of how these proposals would advance economic growth and shared prosperity while putting our country on the right fiscal path. “
Still, the decision to withhold one of Biden’s main campaign plans from his first budget proposal has the potential to upend the left-wing faction of the Democratic Party, which has repeatedly urged the president to write off student loan debt. via executive action.
“We have to push it,” Representative Alexandria Ocasio-Cortez, DN.Y, said on Tuesday. “I believe in full student loan debt forgiveness, but we need to push it to a minimum of $ 50,000 that Senators Warren and Schumer also put forward. “
At the beginning of February, the senses. Chuck Schumer, DN.Y., and Elizabeth Warren, D-Mass., Introduced a resolution calling on Biden to unilaterally write off $ 50,000 in student loan debt. Lawmakers argued that Biden could use existing executive power under the Higher Education Act to order the Education Department to “modify, compromise, waive or release” student loans.
WHAT BIDEN’S PROPOSED CAPITAL GAINS TAX MAY MEAN FOR YOUR PORTFOLIO
“Canceling student loan debt is the most effective executive step President Biden can take to jumpstart this economy,” Warren said.
Biden has called for forgiving $ 10,000 in student loan debt as part of a larger coronavirus relief effort, and extended the freeze on student loan payments until September 30, 2021, immediately after coming into effect. function, benefiting approximately 41 million Americans.
Student Loan Debt Cancellation May Disproportionately Benefit Wealthy Americans: A Recent Study paper published by the Becker Friedman Institute for Economics at the University of Chicago shows that wiping out all student loan debt would distribute $ 192 billion to the richest 20% of wage earners in the United States, but only $ 29 billion for the poorest 20% of American households.
Under a universal loan forgiveness program, the average individual among the highest earning borrowers would receive $ 5,944 in rebate, while those with the lowest income would receive $ 1,070 in rebate, the study found. by economists Sylvain Catherine and Constantine Yannelis.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Such high-profile executive action by Biden would almost certainly face a legal challenge, and it is not clear if she could survive. Critics have argued that the use of such power goes beyond the president’s authority granted by Congress.
Writing off student loan debt would also add to the country’s already inflated national deficit, which totaled a record $ 3.1 trillion in fiscal 2020.
Student loan stocks have doubled over the past decade, reaching nearly $ 1.7 trillion. About one in six American adults owe money on federal student loan debt, which is the largest non-mortgage debt in the United States. Federal Reserve Chairman Jerome Powell cited it as a major obstacle to the “economic life” of people.