President Joe Biden says he wants to build our economy “from the bottom up and the middle out.” But his latest move will give doctors and lawyers thousands in benefits while leaving working-class Americans on the hook for billions more in taxes.
The Biden administration just announced it’s extending the “pause” on student-debt payments yet again — this time through 60 days after June 30 or until court cases surrounding the president’s broader student-debt cancellation efforts are resolved.
Implemented at the start of the COVID-19 pandemic amid tremendous economic disruption, the pause allows borrowers to skip their student-loan payments, and it outright forgives the interest owed while it’s in place.
This was supposed to be a very short-term measure, enacted in March 2020 when people’s jobs were locked down and many Americans couldn’t pay their bills. Yet years later, after almost all the other “emergency” programs have been allowed to expire, the president is extending the “pause” again — even though the economic disruption facing college grads has long since faded.
College graduates’ unemployment rate is down to less than 2%, meaning they’ve fully recovered from the pandemic’s effects. So they clearly don’t need a further vacation from their financial responsibilities. But the “pause” is worse than unnecessary. It costs taxpayers billions a month and is actually deeply regressive, mostly benefiting the elite, especially those with advanced degrees.
The biggest beneficiaries of extending the pause will be doctors, lawyers and people with graduate degrees, according to the nonpartisan Committee for a Responsible Federal Budget. That’s certainly who has profited so far.
CRFB’s experts estimate that between the waived interest payments and the debt-eroding effects of inflation, by the end of the year doctors will have received an average of $68,000 in total debt forgiveness from the pause. Lawyers will have collected a tidy $41,500, with master’s degree-holders getting around $18,500.
Apparently that wasn’t enough: Biden decided these struggling classes of Americans were in desperate need of more taxpayer-funded relief.
This move really is almost exclusively helping the well-off. All told, more than “three-quarters of the benefit of the pause goes to the top half” of earners, CRFB says. On the other hand, your average waiter, trucker and Uber driver — who didn’t go to college — will get exactly $0 in benefits. Yet they’ll still be on the hook for the tens of billions this extension will cost us taxpayers, of course.
That’s right: At a time inflation is already costing families thousands and leaving hardworking Americans struggling to make ends meet, Biden is putting them on the hook for billions more to comfort an affluent, highly educated slice of America’s elite.
This is a profound injustice — and frankly it reeks of partisan clientelism.
Student-debt relief disproportionately benefits demographic constituencies that lean heavily Democratic. Younger people, people with advanced degrees and urbanites are all more likely to have student debt than other Americans. They’re also much more likely to vote for Democrats.
This is no coincidence.
Biden has backpedaled from his August promise, as James Bovard predicted he would in these pages: “The student-loan payment pause is gonna end,” the prez said then. “It is time for the payments to resume.”
Biden didn’t announce an end before the midterms, though. Indeed, he thanked “the young people of this nation” who voted for “student debt relief” — and helped Democrats dodge disaster in the election.
Now Biden’s party is hoping to gain a solid Senate majority in Georgia’s Dec. 6 runoff between Democratic Sen. Raphael Warnock and GOP challenger Herschel Walker. As Bovard notes of the extension, “This is forcing taxpayers to make a $25+ billion contribution to Warnock’s GA Senate campaign.”
President Biden has a line he loves to trot out: “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” Well, if his budget is anything to go by, this president values rewarding his affluent voter base over doing what’s best for the American people.
Brad Polumbo is a Robert Novak journalism fellow and the co-founder of Based Politics.