White House defends Biden's student loan handout
White House economic adviser Jared Bernstein joins 'The Story' with reaction to blowback, 'unfairness' claims.
Their timing couldn’t be worse. Just as inflation retakes center stage, the 62% of Americans who are not college grads will be doubly angry over more reckless Democrat spending, which a majority of the country blames for soaring prices. Not only will they be asked to shoulder the debts of people who stand to out-earn them over their lifetimes, but the extra half-trillion dollars tossed into the economy will drive inflation even higher.
No wonder even some Democrats are rebelling.
The latest vote-buying gambit from the White House confirms that the Republican Party now represents working-class Americans. Meanwhile, the Democrat Party is today defined, as James Carville recently explained, "by some over-educated, totally doofus coastal elites that are out trying to write dictionaries or something unrelated to anybody’s life."
He is correct.
BIDEN ANNOUNCES STUDENT LOAN HANDOUT AS NATIONAL DEBT SOARS
Unconvinced? Check out the latest poll from CBS, which shows only 32% of non-college educated white registered voters approving of the job Joe Biden is doing, compared to 48% of those with a college degree. More compelling: among those voters without a college degree, 31% say they will vote for Democrats in the upcoming midterms, while 61% say they will vote for the GOP. Conversely, college grads favor Democrats over Republicans 49% to 46%. That is a stark divide.
A divide which will undoubtedly become more pronounced in the backwash of Biden’s latest taxpayer-funded splurge. An analysis by the non-partisan Penn-Wharton group showed that about 70% of the student loan debt being forgiven is held by families in the top 60% of the income distribution ladder.
Another study found that people living in Washington DC have the highest per capita student loans of anyplace in the US. So, Biden’s generosity goes especially to higher-income elites in our nation’s capital. Note to Joe: you probably already have that group locked up.
BIDEN'S STUDENT LOAN PLAN IS A SLAP IN THE FACE TO PEOPLE LIKE ME
Biden’s proposal is meant to increase voter turnout in the midterm elections from groups like young people and Hispanics who are notorious for not showing up in off-year elections and who are not keen on the president. A recent Economist poll shows only 20% of those surveyed want Biden to run again in 2024, including only 18% of adults age 18-29 and only 18% of Hispanics – both groups expected to be prime beneficiaries of the loan bailout plan.
But, Biden’s plan could backfire. The Federal Reserve recently recommitted to battling inflation, causing the stock market to go into a tailspin. For the past several weeks, Americans had grown optimistic that inflation had peaked. Gasoline prices declined for over 70 days in a row, and commodity prices like wheat and copper had also drifted lower.
Many were optimistic that the Fed would be able to engineer a "soft landing", and that maybe the worst of the slowdown was already behind us.
BIDEN'S STUDENT DEBT HANDOUT TURNING COLLEGE INTO AN ENTITLEMENT
But Fed Chair Jay Powell made it clear in a recent speech that while the year-over-year inflation comparisons may have topped out, prices for nearly everything are still rising, and the Fed will continue to jack up rates. That means a weaker economy, less robust jobs market and wages that will not keep pace with rising prices. At a time when inflation remains voters’ number one issue, Democrats’ ongoing big spending programs, including canceling student debt, will not be popular.
FILE – US Federal Reserve Chairman Jerome Powell testifies before the House Oversight And Government Reform Committee hearings on oversight of the Treasury Department's and Federal Reserve's Pandemic Response, on Capitol Hill in Washington, DC, September 30, 2021. (Photo by AL DRAGO/AFP via Getty Images)
While the Biden team puts the cost of the student loan bailout at $240 billion, other groups say it will cost much more. The Committee for a Responsible Federal Budget says the real cost is $440-$600 billion. Not only will this extra surge in spending pump up inflation, it also provides one more reason that millions will not go back to work.
A shortage of available employees has kept wages rising, which companies pass along in ongoing price hikes. Canceling student loans will only make this problem worse.
This is not the only instance of Joe Biden ignoring the concerns of Middle America. The biggest accomplishment of the Biden presidency was supposedly passing the fraudulently-titled Inflation Reduction Act. That slimmed-down Build Back Better bill mainly focused on spending $369 billion on climate initiatives that are especially popular with those "coastal elites."
Polling shows that climate change is not the main concern for working-class Americans. Consequently, it is not shocking that only 29% of registered voters think the Inflation Reduction Act will help them and their families, while 71% think it will either hurt them (37%) or not have much impact (34%).
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Biden’s plan is coming in for harsh criticism from all sides. Some Democrat economists like former Obama advisers Larry Summers and Jason Furman oppose the measure; Furman tweeted "Pouring roughly half [a] trillion dollars of gasoline on the inflationary fire that is already burning is reckless,"
Democrat Representative Chris Pappas, who faces a tough reelection race in New Hampshire, criticized Biden’s move, saying it "sidesteps Congress and our oversight and fiscal responsibilities".
Democrat Tim Ryan, running for the Ohio Senate seat vacated by Rob Portman, and desperate for blue-collar votes, said "People are getting crushed with inflation, crushed with gas prices, food prices and all the rest, and I think a targeted approach right now really does send the wrong message. There's a lot of people out there making 30, 40 grand a year that didn't go to college and they need help as well."
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Almost certainly Joe Biden’s student loan bailout is illegal. Just as our courts have slapped down other grandiose programs initiated by the White House, like the EPA single-handedly shifting our power industry away from fossil fuels, or OSHA ruling that corporations must require employees to get vaccinated, this student loan bailout will likely be shot down as well. Congress has the power of the purse – not the White House.
Democrats may have just spent the momentum gained from declining gasoline prices and passing the Inflation Reduction Act. It seems they can’t help themselves.
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