The Bold Economic Move Joe Biden Refuses to Make

The Bold Economic Move Joe Biden Refuses to Make

A s Senator Elizabeth Warren sees it, President Joe Biden can solve a lot of problems-for millions of Americans financially, and for himself politically-with a single move that neither Senator Joe Manchin nor any Republican in Congress could veto. The president, she says, should unilaterally wipe out up to $50,000 in student-loan debt for every federal borrower in the country.

Warren has been beating this drum for just about two years, ever since she unveiled the proposal in a bid to outflank her rivals-including Biden-in the 2020 Democratic presidential primary. The senator from Massachusetts has won influential converts to her cause over the past year, most notably Senate Majority Leader Chuck Schumer. But Biden is not one of them. I will not make that happen, he bluntly told a questioner asking about the proposal at a town hall a few weeks after he took office.

The president’s political fortunes are very different now than they were then. His ambitious social-spending agenda, already chopped in half, has stalled in the Senate. Biden’s approval ratings have fallen to the low 40s, and with the pandemic raging and Congress bickering, his window for mounting a comeback in time to save his party’s majorities in the midterm elections is shrinking. In Biden’s struggles, progressives like Warren see an opportunity to make a fresh case for action that would prove popular with voters whom Democrats need to turn out this fall.

Borrowers have not had to make student-loan payments for nearly two years because of the pandemic, thanks to a pause first enacted by Congress in the 2020 CARES Act and then extended multiple times, first by President Donald Trump and then by Biden

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I believe the president should cancel student-loan debt because it is the right thing to do for people who have debt and the right thing to do in our economy, Warren told me by phone last week, having recovered from a mild December bout (a day and a half of the flu and I was done, as she described it) of COVID-19. But, she added, even someone who disagreed with me should take a very serious look at the polling data right now.

But the scale of what Warren and other progressives are proposing is something else entirely: Blanket, permanent loan forgiveness would alter the long-term finances of individual Americans more directly than any other single unilateral action by a president

Since the spring, Biden has lost some support on the left and even more among independents, but no group of Americans has soured faster on the president than younger voters, according to a recent analysis of polling data by The Economist. That same cohort-Gen Zers and Millennials-is where support for student-debt forgiveness is strongest, surveys have also shown. One of the hardest things for an elected official to do is demonstrate to people that they can count on that elected official to be on their side, Warren said. Canceling student-loan debt for more than 40 million Americans would persuade a lot of young people that this president is in the fight for them.

The estimated $1.7 trillion in total outstanding student-loan debt is roughly the cost of the Build Back Better Act that Biden is trying to push through Congress. Canceling up to $50,000 per borrower would wipe away about $1 trillion of that debt. If left untouched by the courts, the president’s action would, at the expense of ballooning federal deficits, eliminate entirely and forever the student loans that 80 percent of the nation’s borrowers currently owe to the government.

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