Administration officials also claim the plan is “paid for” — because the federal deficit is set to shrink by at least $1.7 trillion this year compared with last year. In interviews, officials say the nation’s improving fiscal picture has given Mr. Biden confidence that debt forgiveness is affordable.
“It is paid for and far more by the amount of deficit reduction that we’re already on track for this year,” Bharat Ramamurti, a deputy director of the National Economic Council, told reporters on Friday.
That’s not how “paid for” usually works. The budget deficit is coming down in part because of increased tax revenue, but also because the government borrowed trillions more than usual last year to pay for a $1.9 trillion stimulus package aimed at helping people, businesses and government endure the pandemic. The officials are effectively arguing that they are paying for student loan relief in part by not borrowing more money for pandemic aid.
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