So much for Scranton Joe looking out for the working class, eh? While Joe Biden crows about the “incredible transition” he’s forcing lower- and middle-class households to endure with hyperinflation and record gas prices, Biden’s about to offer Academia a bail-out. College-loan recipients could get $10,000 taken off the top of their debt as long as they earn under $150,000 per year, and married couples with loans for both could see a $20,000 benefit as long as they earn under $300K.
Yes, the professional class has it so tough these days …
White House officials are currently planning to cancel $10,000 in student debt per borrower, after months of internal deliberations over how to structure loan forgiveness for tens of millions of Americans, three people with knowledge of the matter said.
President Biden had hoped to make the announcement as soon as this weekend at the University of Delaware commencement, the people said, but that timing has changed after the massacre Tuesday in Texas.
The White House’s latest plans called for limiting debt forgiveness to Americans who earned less than $150,000 in the previous year, or less than $300,000 for married couples filing jointly, two of the people said. It was unclear whether the administration will simultaneously require interest and payments to resume at the end of August, when the current pause is scheduled to lapse.
As means-testing schemes go, this certainly allows for lots of means. The distribution of household income in the US as of 2020, the latest data available, shows that only 10% of households earn over $200K a year, let alone $300K. Even if we’re only looking at single-income households, that still only 18% that would get excluded. This is practically no means-testing at all.
About the only notable people who might be excluded from this would be certain members of Congress *cough cough*, and that’s only if their taxable income remains above $150K. The standard deduction in 2022 will be around $13K, and the annual salary for members of Congress is $174K. Put aside some 401K deductions, and a few members of Nancy Pelosi’s caucus might just squeeze in under the limit.
Furthermore, the recipients of Biden’s largesse would be those who have already received a potent economic benefit: a college education. They have an advantage in the workplace over those who didn’t take out these loans, and now Biden wants the latter to subsidize the former, even though these former college students likely make more money than their subsidizers do. These are the people who saved their money and stayed out of debt while eschewing access to that economic benefit, only to watch Biden’s spending spree trigger hyperinflation that’s eroding their savings and their buying power — and now they’re being asked to bail out those who spent irresponsibly … and we’re not just talking about the loan recipients here.
Our old friend Noah Rothman summed it up nicely:
It's so incandescently foolish that I just can't see it happening.
— Noah Rothman (@NoahCRothman) May 27, 2022
It’s also such a foolish non-sequitur that it’s amazing to hear the White House propose anything on student loans now. Fifteen months ago, voters might have taken a mild interest in the debt trap of higher education. Now, after more than a year of out-of-control inflation and high gas prices — Biden’s purposeful “incredible transition” included — all they’re worried about is their own eroding financial position.
A week ago, FiveThirtyEight conducted a national poll specifically focusing on voter priorities on issues. They accepted multiple responses, so this isn’t just a case of first-past-the-post effect on issue selection. See if you can spot the deep concern over student-loan forgiveness in this chart:
Overall, 52% of their respondents cited inflation as their most important issue. More Democrats chose inflation than Republicans chose immigration, in fact. Student loan debt might fall into the “economic inequality” category, which fewer than 20% of Democrats chose as a major issue for them in the midterms. Otherwise, it doesn’t appear on here at all. Why? Because it’s not a part of the lived experience for most American households — and they don’t feel responsible for someone else’s debt decisions, either. Nor should they.
This is yet another example of Biden and Democrats talking past voters in the midterm cycle. They are far more interested in riding progressive hobby horses than they are in dealing with the crises facing most American households and voters in 2022, and voters have clearly noticed it. Until their policy priorities line up with the chart above, voters will happily change horses in November, and in 2024.
Addendum: Take note of where abortion registers in this FiveThirtyEight/Ipsos issue polling, too. That comes less than two weeks after the leak of the Dobbs draft.