[guest post by JVW]
Earlier this the week, Congress passed a measure in a bipartisan vote (ok, it was two House Democrats joining their Republican colleagues and two Senate Democrats and one independent, Krysten Sinema, voting with Republicans) to roll-back President Biden’s arguably illegal Executive Order which provided many student loan debtors with up to $10,000 in loan forgiveness, $20,000 for those who received loans geared towards low-income families. On Wednesday, President Biden vetoed the legislation, subjecting us to one of his typically grouchy and demagogic justifications:
Congressional Republicans led an effort to pass a bill blocking my Administration’s plan to provide up to $20,000 in student debt relief to working and middle class Americans.
I won’t back down on helping hardworking folks.
That’s why I’m vetoing this bill. pic.twitter.com/ZeYEm4LOjz
— President Biden (@POTUS) June 7, 2023
Unsurprisingly, the President employed the standard Democrat trick of comparing student loans to the PPP loans which were offered to small businesses during the pandemic. This is pretty much claiming that forced closures of businesses by the government, under penalty of prosecution, are very much equivalent to the entirely voluntary decision to enroll at an institution of higher education and run up debt chasing a degree. This has been one of the most insipid talking points that Democrats have come up with to defend their gross overreach, and it deserves absolute derision from anyone observant enough to realize how inapt the comparison truly is.
During the negotiations last month over the debt limit, there was at one point a rumor of a compromise in which the White House would further scale back the program, currently estimated to cost at least $400 billion and up to $1 trillion over ten years, in return for the GOP agreeing to codify it into law. Republicans rightly concluded that the Supreme Court is fairly likely to determine that the President lacks the authority to unilaterally impose this program without the assent of Congress. In the end, the only mention of student loan forgiveness in the debt ceiling compromise is that the White House and Congress agreed that the freeze on loan repayments will be lifted no later than the final day of August, nearly 42 months after it was implemented.
And this ambiguity on the fate of loan forgiveness coupled with the resumption of required debt payments has the left freaked out. A piece by David Dayden at The American Prospect is downright livid that our hip, young, progressive college graduates might not get Uncle Joe’s big wet (pervy) kiss on the cheek:
By the end of this month, the Supreme Court will decide whether or not 43 million student loan borrowers will see between $10,000 and $20,000 taken off their debt load. But regardless of the Court’s opinion, by the fall, anyone with a remaining loan balance will need to make monthly payments again, for the first time in three and a half years.
[. . .]
That leaves the administration in the dicey position of managing a consequential rollout (affecting more than three times as many Americans as the Obamacare exchanges) with an enormous potential downside. Millions of young people who have voted for Democrats in record numbers in the past two elections will endure what will feel like a new financial obligation of hundreds of dollars per month. And if the history of the student loan program is any guide, the process will overflow with errors, mistakes, and frustration.
Very helpfully, Mr. Dayden lays his cards on the table from the onset: Student loan repayment is going to suck, and it is going to hit a key voting constituency for Democrats. It’s good to know that principle and policy wisdom is secondary here to an exercise of raw political power. Democrats don’t usually say that sort of thing out loud. More from Mr. Dayden:
The Office of Federal Student Aid (FSA), which is tasked with managing this impending chaos, has no additional funding to do it, and its budget was already inadequate. But some advocates argue that resources are just a tiny part of the problem. “I’m not aware of any instance where a creditor restarted a 40-million-account portfolio. That’s at a scale that finance doesn’t operate in, let alone government,” said Mike Pierce, executive director of the Student Borrower Protection Center (SBPC).
[. . .]
“Even if we dumped all of the money in the world on them, they couldn’t get this right,” added Thomas Gokey, an organizer with the borrower advocacy group Debt Collective. “Only good things happen when the payments are kept off, and only bad things result from turning them back on.”
Amazing, isn’t it? Even if given unlimited funding, the government would fail at managing the portfolio of the millions of student loan accounts, at least according to an activist for debt forgiveness. Coming in strong with “the government is going to fail at this task, so they might as well just throw in the towel” is quite the flex for an ideology which wants the same government to manage virtually every aspect of our lives, from our education to our health to our employment to our families to our retirement. But nobody ever tried to claim that there was much intellectual consistency in progressive dogma. Moving on:
If you want to see an example of how this might spiral out of control, look no further than the Medicaid purge now happening across the country. The end of the pandemic-era continuous coverage requirement meant states could resume eligibility checks that can drop people from the rolls. Dozens of states are now eagerly doing so, with hundreds of thousands losing coverage—with most of the cuts happening due to procedural reasons rather than enrollees actually lacking eligibility. So if the renewal form went to the wrong address, or the state website for re-enrolling doesn’t work, or you just didn’t hear about the new termination process, you’re out of luck and kicked off your health insurance.
All this tends to tell me is that staunch progressives do indeed want everyone to be entirely dependent on one government program or other, and they don’t want the citizen to have any obligation to actively participate, other than being told by the government what to do and when and where to do it. The idea that asking people to go back to work and stop relying upon pandemic-era handouts is anathema to this worldview, whether it be in the area of health care or in education.
Writing in response to Mr. Dayden’s argument, Noah Rothman makes clear why the progressive argument is a whole lot of hooey:
We are supposed to feel bad not just for borrowers who will experience administrative errors but anyone who took on student-loan debt. After all, these are people with “a high propensity to spend,” Dayen adds. True enough. Research indicates that the student-loan-debt pause led borrowers to take on even more debt. Restoring a regular debt-repayment schedule will provide younger voters with a clearer picture of their financial obligations. The activists hope those voters will thank Democrats for the education in fiscal responsibility by throwing them out of office on their ears.
Take a moment to contemplate the point being made at the link in the preceding paragraph: Despite what the left earnestly wants you to believe, forgiving debt doesn’t really allow for young people to move out of the family home into their own living spaces, pay off credit card bills, and save for the future, it simply encourages them to take on debt in other areas. Many progressives, recognizing this fact, like to portray this as Millennials helping to stimulate the economy and thus speed up our recovery. Imagine that. I wouldn’t mind having the government “forgive” a mortgage payment of mine, and I promise to use the savings for a Hawaiian vacation to help the islands goose their tourism back up to pre-pandemic levels. That is the sort of tortured logic that we’re hearing from the debt-forgiveness crowd. They are, as Mr. Rothman rightly describes them, “self-righteously rapacious.”
When this crowd is smacked down by the Supreme Court (here’s furious knocking on wood coming from me), don’t expect the pressure on the Biden Administration to end. Loan forgiveness advocates are now saying that if the 2001 HEROES Act doesn’t allow the President to forgive hundreds of billions in loan debt, then the 1965 Higher Education Act ought to do the trick. Joe Biden, who spent long enough in the Senate to theoretically have developed respect for the legislative branch’s role in costly spending proposals, deserves to be pestered by these grown-up children and if he decides in his Rooseveltian delusions to take a second bite at the apple, then impeachment proceedings ought to begin immediately.