By Matthew Continetti
Saturday, February 24, 2024
President Biden traveled to the West Coast this week
to raise money for his campaign. While there, he decided to spend some money,
too. Yours.
On February 21, Biden announced that he was
canceling $1.2 billion in federal student loans for 153,000
borrowers. That’s on top of more than $130 billion in student debt that he has
canceled to date. The Penn Wharton school says that Biden’s efforts will cost a total of $475
billion over ten years.
How awful is this policy? Ah, let us count the ways.
It’s not debt relief. It’s debt transfer. Biden is
forgiving certain borrowers of their duty to pay — and placing the burden on
the American taxpayer, who is already on the hook for $34 trillion in federal
debt.
The cost of servicing that public debt soon will be more expensive than America’s defense
budget. Talk about recklessness.
It’s constitutionally dubious. Last year, the
Supreme Court struck down Biden’s original debt-transfer program. A
6-3 majority said that the president had overstepped his authority by grounding
his policy in a post-9/11 law called the HEROES Act. After the Court ruled
against him, a defiant Biden pledged that he would look for a way to circumvent
Congress and the judiciary. He landed on what he calls the “Saving on a
Valuable Education” (SAVE) Plan.
The SAVE Plan is also vulnerable to legal challenge. Such
far-reaching policies require congressional authorization. Somewhere, an
ambitious Republican state attorney general is making plans to sue the federal
government. Biden has talked a lot recently about threats to constitutional
procedure and the rule of law. Has he looked in the mirror?
It creates moral hazard. Think about the
incentives. Potential borrowers now have every reason to take on more student
debt, knowing that one day the federal government will bail them out. Colleges
and universities now have every reason to increase tuition and fees, knowing that,
while students may occupy the dorm rooms, higher ed’s true customer is Uncle
Sam.
Nor is the hazard simply economic. Biden’s exercise of
arbitrary power emboldens the Bernie Sanders–Elizabeth Warren wing of the
Democratic Party. Expect the Left to lobby Biden and Kamala Harris to transfer
other forms of debt — credit cards, autos — to the state.
Laws are meant to deter bad behavior. Biden’s executive
action rewards it.
The plan smacks of desperation. The president
faces a dilemma. At this writing, he is losing the presidential race. He’s
running just behind former president Trump nationwide. He’s
running slightly farther behind Trump in key swing states. His approval rating is stuck in the low 40s. Part of the problem is his unpopularity
with voters under 30 years old.
The student-debt relief he promised four years ago is
meant to appease a key constituency. It’s a textbook example of old-school, New
Deal, Democratic “spend and spend, tax and tax, and elect and elect”
campaigns. Concentrate benefits to college graduates. Disperse costs among the
general electorate. And reap the profit.
Which is why beneficiaries will be informed of their good
luck through an email carrying the president’s signature. Just so they know
whom to thank.
Still, Biden’s gambit may not work. Consider his record.
The president has backed several initiatives that are popular in the abstract.
But such popularity hasn’t translated into better job approval for him. The
infrastructure bill, the CHIPS Act, veterans’ health care, gun safety, drug
reimportation — voters like them all. Without rewarding Biden.
On the contrary: Voters blame Biden for high food prices and interest rates.
They say his policies haven’t helped the middle class. Biden’s campaign has
spent millions in advertisements crediting him with the
improved economy. Yet he remains in the doldrums.
Biden’s student-debt plan is more controversial than the bipartisan legislation he
has signed into law. It affects a smaller number of voters. It spurs resentment
among voters who have paid off their loans or who have not attended college.
It’s another rebuke to non-college voters who struggle to keep up with high
prices and who face job losses from Biden’s recent decision to suspend construction of liquefied-natural-gas export terminals.
Why the disconnect between Biden’s acts and voters’
attitudes? Because the electorate has judged him to be incapable of serving a
second term. And that judgment has put Biden in the worrying position of having
to placate his left-wing base, while praying that independent voters will turn
against Trump and MAGA.
No wonder he’s desperate.
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