Washington Watch: ‘Student-loan socialism’ — Republicans blast Biden’s debt-forgiveness move, as Democrats praise his ‘effective action’

by | Aug 24, 2022 | Stock Market

President Joe Biden on Wednesday made his long-awaited announcement on federal student loans, saying his administration plans to cancel $10,000 in debt per borrower for individuals making under $125,000 a year or households making less than $250,000. With November’s midterm elections nearing, he also announced forgiveness of up to $20,000 per borrower for Pell Grant recipients, along with one final pause for loan repayments.

Below are some initial reactions from analysts as well as Republican and Democratic lawmakers. See: Biden canceling $10,000 of student loan debt, $20,000 for Pell grants, per borrower And read: Canceling student debt unlikely to stand up in court, ex-Education Department lawyer saysRepublicans, former Obama adviser, others criticize Biden’s move • “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.” — Senate Minority Leader Mitch McConnell, a Kentucky Republican, in a statement

• “The issue is that we just passed a very large, very difficult to pass piece of legislation, the Inflation Reduction Act, which will accomplish some deficit reduction, both in the short term and … the long term — very, very important, given the huge national debt that we have — and will do so in a way that will push in the right direction against inflation. Because immediate debt reduction, or bringing our deficits, down will help deal with the inflation problem we have, and make it easier for the Fed to fight that. Now it appears that with the stroke of a pen today, the president is going to erase all of those gains. And in fact, the cost of what I think is being discussed will outweigh all of the savings from this legislation that took an entire year to negotiate and was not easy to pass.” — Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan watchdog organization, in a Yahoo Finance interview • “In addition to making inflation worse, transferring student debt does nothing to curtail runaway costs in higher education, including graduate schools that charge more and more while delivering less and less. Forgiveness without accountability is a free pass for failed programs with high costs and poor outcomes and would be a green light for colleges to continue tuition hikes. Indeed, taxpayers may face more costs in just a few years when student debt returns to its current level.” — House Minority Leader Kevin McCarthy, a California Republican, in a statement Analysts see no further forgiveness, pain for some companies • “This … is likely as far as this administration will go in canceling student loan debt. Republicans already are criticizing Biden for spending $300 billion to subsidize what the GOP describes as wealth …

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