GOP steps up attacks on student debt cancellation

Republicans attack Democrats and President Biden on the issue of student debt cancellation, linking the effort to inflation and calling it a transfer of wealth to the elites.

It’s “absurd fiscal policy that will make inflation worse” and shows that Democrats have “prioritized the demands of the liberal elite” over working Americans, in the words of the minority leader at the House Kevin McCarthy (R-Calif.).

It’s a “crass attack on hard-working Americans who haven’t attended college or saved up to pay off their loans,” according to Rep. Jason Smith (R-Mo.), a prominent committee member. of the House budget. He calls it a “bailout” for the top 20% of households who have “higher education degrees, six-figure incomes, and high lifetime earnings.”

“It’s totally obscene and immoral,” in the words of Rep. Jim Banks (R-Ind.), the chairman of the conservative Republican review committee.

The accelerated rhetoric underscores the GOP’s efforts to make the issue a midterm game for working-class voters, a group that is vital not only for the House and Senate elections in 2022, but also for the race for the White House in 2024.

The White House, for its part, hopes that Biden’s executive action on federal student debt cancellations will rally its base to the polls at a time when polls show Democrats are deflated by what their leaders are doing. have accomplished. That dynamic is fueling additional Republican jabs, with Rep. Virginia Foxx (R-NC), a top member of the House Education and Labor Committee, accusing Biden of trying to “buy votes and save his disaster party in November” by canceling the debt.

Biden has come under constant pressure from liberal groups, the NAACP and Senate Majority Leader Charles Schumer (DN.Y.), among other voices, to take action to cancel student debt. These voices say relief for people in debt, especially minority and working class workers, is essential.

The reality is that many households above and below the median US household income level of $67,521 carry student loan debt.

According to a Brookings Institution analysis of 2019 data from the Federal Reserve, about 60% of all student debt is held by households earning $74,000 or more a year, with the rest of the debt held by households being less than this digit.

The Biden administration seems aware of the risk of attacks from the GOP.

While Schumer and other Democrats have pushed for the administration to forgive $50,000 in debt per student, Biden would consider granting at least $10,000 in forgiveness per student, sources told The Hill.

Relief under this action could be limited by income level, the Washington Post reported, with the White House providing relief to individual filers who earned less than $125,000 or $150,000 in the previous year. or $250,000 or $300,000 for those filing jointly.

Sandy Baum, nonresident senior fellow for the Urban Institute’s Center on Education Data and Policy, said a broader discount could disproportionately benefit higher-income borrowers, who she says are more likely to pay. to have a higher debt. But she played down GOP arguments linking student loan debt to inflation.

“Some people will have more to spend each month and you could say that has an inflationary impact. But that doesn’t seem very dramatic in the context of what’s driving inflation these days,” Baum said.

Either way, the GOP believes its argument can be effective.

Gunner Ramer, political director of the Republican Accountability Project, said he thinks the forward line could be an effective tool for the GOP to rally its base while winning over swing voters concerned about inflation.

“Some members of the Democratic Party may believe that student loan forgiveness is the thing that needs to happen immediately. However, a much larger majority of the country is concerned about inflation,” Ramer said.

Republicans have rejected arguments made by debt forgiveness advocates who say it could benefit low-income people and close racial wealth gaps for black borrowers in particular.

“Americans are saddled with all kinds of debt — medical, credit card, mortgage and auto debt. But Democrats want to cancel the one form of debt that, by definition, primarily benefits the upper class,” Banks said, the lawmaker who called the cancellation “totally obscene and immoral”.

Biden has repeatedly extended a student loan moratorium put in place during the pandemic in which borrowers don’t have to make monthly payments on federal student loans that also don’t earn interest.

Republicans stepped up criticism after Biden last extended the hiatus. Senate Republicans introduced legislation last week to end the Biden administration’s breaks while limiting the president’s power to freeze reimbursements in future national emergencies.

Both sides hope their argument will prevail in the fall, with polls suggesting American views on the issue are complicated.

A February poll of likely voters from Data for Progress found that a majority of those with no college education supported some kind of student loan forgiveness, with 65% supporting some or all of it. elimination for each borrower and 69% supporting part or all of the elimination for low and middle income borrowers.

Similarly, an April Politico/Morning Consult national tracking poll found that 58% of registered voters with no student loan debt favored some sort of student loan forgiveness and 34% said the federal government should not not cancel student loan debt at all.

However, attitudes may change if Biden makes the decision to officially cancel student debt and voters become more aware of the problem.

“I don’t think it’s reached the level that inflation, border crime is in terms of unifying the base against the Democrats. But if [Biden] go ahead and cancel student loans, I think that might rise in voters’ minds because it’s actually happening versus a hypothetical,” a GOP national strategist said.

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