“Gamble” is one word, of course. If you’re an American who doesn’t stand to benefit from Joe Biden’s big buy-out of student loan debt in advance of the US midterm elections, “robbery” might be another word. For Irish people wondering what the big kerfuffle is all about, here’s a quick primer:
American students, unlike Irish students, pay full fees to go to University or College. These are often paid for with student loans – the loans cover the fees, and get repaid once the newly-educated graduate starts working. American universities being what they are, these loans are rarely small. Some graduates can find themselves starting their professional lives with the equivalent of a decent sized mortgage on the red side of their personal balance sheet. For several years now, liberal activists have been campaigning for debt relief for those burdened with Student loans.
The problem, or really problems, are several: First, it has generally been the convention in the United States that laws are made by Congress, not the President. Joe Biden said as much, earlier this year, telling reporters that this “isn’t just something I can sign into law”. He, uh, changed his mind on that one, which is why various American legal scholars are saying that his new policy is likely illegal.
And what is that new policy? Well, put simply, Biden has signed an executive order commanding that Student loans be reduced by $10,000 for any borrower presently earning less than $125,000 per year. The cost of the policy is estimated to be $300billion this year alone – about four times the Irish national budget, for context.
There are more problems than just the legal, or the financial, however. There’s also the political. What Biden is trying to do, politically, is obvious: Handing voters an enormous wedge of cash – ten grand – before an election is just an amped-up version of what politicians have done ever since democracy was invented – buying a few votes. The problem for him politically is that unlike Ireland, going to university remains a relatively elite occupation in the United States. There are millions of Americans who do not go, and never incur the debt. They generally earn less than those who do. And they’re now paying, directly, for a big bribe for people richer than they are. As one Republican put it this week, he’s taking money directly from the poor, and giving it to graduates of the Harvard Law school.
This is, of course, at a time of high inflation and a cost of living crisis.
The other political problem is that, well, this just isn’t a well targeted move. Educated college-going liberal voters tend to live in educated, college going liberal enclaves, and those places tend to be seats that the Democrats win anyway. The people angry about it, though, are more spread out: This is the phenomenon that won Donald Trump one, and almost two, elections, despite getting fewer votes overall. It doesn’t really matter if Hillary Clinton wins New York by 50 points, if Trump wins a bunch of other places by three points. The raw numbers favour the Democrats, but the geography of the thing favours the Republicans. That’s as true of this policy as it is of the 2016 election.
And then, there’s the third problem, common to politicians everywhere: Nothing is ever, truly, enough. Witness uber-liberal Alexandra Ocasio-Cortez’s response:
Rep. Alexandria Ocasio-Cortez took to Twitter to lambast the amount of debt that the Biden administration is targeting, and how it intends to distribute it. She warned it may backfire on Biden by infuriating his opponents as well as borrowers who want more relief from crushing loans.
She wrote that $10,000 in means-tested forgiveness “is just enough to anger the people against it” — and “the people who need forgiveness the most.”
It has the risk, then, as the woman who commonly goes by “AOC” correctly notes, of angering everyone: 10k doesn’t make a huge dent in a 200k loan, but giving rich people 10k certainly will annoy those who aren’t getting it.
One wonders, really, why the White House considered this necessary: As I wrote this week, to the annoyance of some readers, polls have been improving for Democrats recently. There is now some talk that they may actually gain Senate seats. Or there was, before this announcement. I’ll leave you with this, from a Democrat facing a tough re-election in a district Biden won in 2020. Sure doesn’t sound like he thinks this announcement will help him, does he?
First elected Democrat I’ve seen panning Biden’s student debt relief plan: Rep. Chris Pappas, facing a tough reelect in New Hampshire.
“This announcement by President Biden is no way to make policy and sidesteps Congress and our oversight and fiscal responsibilities.’ pic.twitter.com/rcEf5SPvl0
— Kevin Robillard 🇺🇸 (@Robillard) August 24, 2022