While some Democrats are wary of the move, it’s hard to predict how voters will react.
While some Democrats are wary of the move, it’s hard to predict how voters will react.
S everal Democratic candidates in key congressional races have tried to distance themselves this week from President Biden’s decision to wipe away student debt by executive action, which could cost taxpayers anywhere from $500 billion to more than $1 trillion over the next decade.
“I don’t agree with today’s executive action because it doesn’t address the root problems that make college unaffordable,” Senator Catherine Cortez Masto (D., Nev.) said. The Democratic nominee in Ohio’s Senate race, Tim Ryan, said in a statement that “waiving debt for those already on a trajectory to financial security sends the wrong message to the millions of Ohioans without a degree working just as hard to make ends meet.” Even Democratic senator Michael Bennet, who is running for reelection in Colorado, which Biden won by double digits, criticized the move..
It’s not hard to see how Biden’s loan-forgiveness scheme could backfire on Democrats. The plan cost at least $3,000 per taxpayer, and possibly more than $6,000, over the next ten years — and that’s before even considering the impact it will have on inflation and interest rates. A majority of Americans did not attend college, and most of those who took out loans to do so worked to pay off those loans. TV ads about truckers and welders paying off the student loans of lawyers earning $249,999 per year in adjusted gross income write themselves.
Why is a student loan any more worthy of special treatment than a car loan or a loan on farm equipment or construction tools? There’s really not a good answer to that question. To make matters worse, the Biden White House is now mocking any critic of the student-loan bailout who took a “loan” from the federal Paycheck Protection Program when the government ordered businesses closed during the once-in-a-century pandemic. This is curious, given that these “loans” weren’t really anything of the sort — it was promised up front that they would be forgiven if they were spent on such necessities as rent, utilities, and the paychecks that kept businesses from having to fire employees.
Biden’s order is also lawless, as House speaker Nancy Pelosi acknowledged last year. “People think that the president of the United States has the power for debt forgiveness. He does not. He can postpone [loan repayment]. He can delay [it]. But he does not have that [forgiveness] power. That has to be [done through] an act of Congress,” Pelosi said in July 2021. This week, Pelosi announced she was pleased by the discovery that the obviously unlawful executive action is lawful: “Well, we’re excited about the president, because we didn’t know what — what authority the president had to do this. And now clearly, it seems he has the authority to do this.”
So, what is Biden thinking politically? “It doesn’t make strategic sense. [Democrats] were in a good position. All the momentum was going in their favor,” Arizona-based pollster Mike Noble told NBC News. “Why forgive debt on a group that never turns out to vote in the first place? The people who vote are the ones who paid their loans back or never had loans to begin with.”
Foolhardy as it may turn out to be, though, there is an obvious political strategy here: Biden is hoping that he can bring those low-propensity-but-overwhelmingly Democratic voters out to the polls in November by forgiving their student debt. “The thing about student loan debt relief is that, while other policies would be more economically progressive, it fairly efficiently redistributes well-being toward people in the Democratic coalition. Youngish, middle-class-ish college/grad school attendees = a *very* D[emocratic] group,” polling analyst Nate Silver wrote on Twitter.
As Biden said in his remarks unveiling his legally dubious executive order, 43 million Americans will benefit from his plan, including “27 million people who will get $20,000 [each] in debt relief.” That’s a lot of money saved by a lot of people. In 2018, 113 million Americans voted in the midterm elections. How many of the 43 million beneficiaries of Biden’s order will show up in November because of it? And how many people will vote against Democrats because they oppose it?
The politics of concentrated benefits and diffused costs being as unpredictable as they are, those key questions are tough to answer.