Mr. President, the Biden administration can't quite seem to decide on the status of the pandemic or the status of the economy. On the one hand, we are being told that we no longer need pandemic- era border restrictions intended to help…
Mr. President, the Biden administration can't quite seem to decide on the status of the pandemic or the status of the economy.
On the one hand, we are being told that we no longer need pandemic- era border restrictions intended to help limit illegal immigration and prevent the spread of COVID. On the other hand, the administration is still fighting to require Americans to wear masks on public transit and airplanes and is urging Congress to pass additional COVID spending to fight the pandemic the administration seems to believe is over at the border.
It is a confusing message, to say the least. Americans know the pandemic can't simultaneously be over for migrants at the border but make it too dangerous for a South Dakotan to fly from Sioux Falls to Minneapolis without a mask.
The administration's messaging is similarly muddled on the economy and student loans. On the one hand, the President is proudly touting ``record'' job creation and ``record'' economic growth even though most of what he is taking credit for is the natural consequence of an economic recovery from the pandemic. On the other hand, the President recently announced that he is extending the moratorium on Federal student loan payments, interest, and collections for another 4 months, until August 31, because Americans are still suffering economically as a result of the pandemic.
Well, which is it? Is our economy thriving or are Americans economically distressed?
The student loan repayment moratorium and interest freeze included in the CARES Act at the beginning of the pandemic made sense. Our economy was starting to shut down, and Americans' jobs were in jeopardy, but it made sense as a temporary measure for a genuine emergency. We are no longer having double-digit unemployment as we did during some of the worst moments of the pandemic. In fact, our current unemployment rate is a low 3.6 percent. For college graduates, the unemployment rate is a staggeringly low 2 percent.
To paraphrase the Wall Street Journal's editorial board on the subject, if student loan borrowers aren't ready to return to making payments now, they will never be.
Even the Washington Post editorialized against the President's latest extension, noting:
What was a needed emergency measure at the start of the
pandemic is no longer justified. It is hard to make an
argument that college graduates are struggling right now. The
unemployment rate for Americans with a bachelor's degree or
higher is a mere 2 percent. There is a near-record number of
job openings.
That was from the Washington Post.
It is true that Americans are facing economic challenges as a result of the inflation that President Biden and Democrats helped to create with their ill-considered American Rescue Plan Act, but, if anything, President Biden's latest student loan pause could help prolong our inflation problems, and, importantly, it will have the biggest benefits for those who are most able to deal with price hikes from inflation. This clearly regressive policy benefits high-debt, high-income borrowers significantly more than low-debt, low-income borrowers.
Again, to quote the Washington Post once more:
Rising prices of gas, rent, food and cars are a hardship,
but forgiving interest on student loans for four more months
offers the biggest benefits to people who have earned degrees
in medicine and law. These people go on to have lucrative
careers. Meanwhile, the 64 percent of Americans who do not
have a college degree don't benefit at all from Biden's pause
on loan repayments.
That was again from the Washington Post.
And subsidizing all of those doctors and lawyers ends up being pretty expensive. The student loan repayment moratorium has already cost the Federal Government more than $100 billion. By the time the President's latest extension of the moratorium is up, it will have cost the Federal Government billions more.
After a huge increase in our national debt, thanks to the pandemic and reckless Democratic spending, the government does not need to be forgoing billions of dollars by providing student loan relief to Americans with some of the highest earning potential, which is why, this morning, I introduced legislation--the Stop Reckless Student Loan Actions Act--to end the current deferment on student loan repayments and limit a President's authority to pause student loan repayments in the future.
My legislation, which I introduced with my colleague Senator Richard Burr and Senators Braun, Cassidy, and Marshall, would continue to allow a President to temporarily suspend student loan payments during a future national emergency, but it would limit those suspensions to a period of 90 days and subject them to congressional disapproval.
It would also ensure that relief is targeted to those who need it most by preventing Presidents from suspending
payments for higher income individuals; and, importantly, it would prevent a President or a Secretary of Education from using a national emergency to cancel student loan debt, which leads me to, perhaps, my biggest concern in all of this.
Deferring student loan payments is a bad policy that is costing the Federal Government money it doesn't have, but it pales in comparison to the ultimate goal for many Democrats--and that is canceling student loan debt entirely.
Days ago, the President's Press Secretary, in referring to the payment deferment, said:
Between now and August 31, it's either going to be extended
again or we're going to make a decision . . . about canceling
student debt.
That was from the President's Press Secretary.
Her statement made it alarmingly clear that the President isn't just temporarily deferring loan payments but is seriously considering canceling--canceling--a significant portion of Federal student loan debt.
She doubled down on that idea on Monday, noting:
What I would tell you is that not a single person in this
country has paid a dime on Federal student loans since the
President took office.
My gosh, canceling student loan debt is a bad idea for so many reasons.
In the first place, it is money the Federal Government simply doesn't have. Democrats often speak as if the Federal Government were able to draw from an unlimited pot of money, but, of course, we know that is not true. Government funds aren't anywhere close to being unlimited, and government coffers aren't filled from a pot of gold at the end of the rainbow. They are filled by taxpayer dollars, and sooner or later, it will be taxpayers who foot the bill for any loan forgiveness program, including the many taxpayers who opted not to attend college or who chose a debt-free way of doing so.
I can scarcely think of anything more unfair than forcing Americans who incurred no college debt to shoulder the bill for those who did, especially when a substantial portion of that debt is incurred by those with the greatest earning potential.
Canceling student debt would also be grossly unfair to the Americans who worked hard for years to pay off their loans. An American who has just finished paying off his or her higher education debt would get nothing--nothing--from such a cancellation while a recent graduate who had made just a month or two of payments could see his or her debt disappear entirely.
And canceling student debt would do nothing to address the real problem, which is the out-of-control cost of higher education. In fact, it would likely make that problem worse, not to mention the fact that student loan cancellation would take an already bad inflation situation and, almost undoubtedly, make it much worse. We think 8.5-percent inflation is bad, and it is, but canceling student loan debt this fall could take inflation to new and even more painful heights.
Now, I strongly support finding ways to drive down the cost of higher education and educate students about the dangers of excessive debt. I also support measures to help students pay off their student loans without putting taxpayers on the hook for hundreds of billions of dollars or more. I would note the measure that I got included in the CARES Act and extended later that year to allow employers to make tax- free payments on their employees' student loans; but unnecessarily deferring student loan payments--or worse, the canceling of a significant portion of student loan debt entirely--is a terrible idea for many reasons.
I hope that colleagues from both sides of the aisle will join the student loan bill that I introduced earlier today to end these endless and unnecessary loan deferment extensions.
I hope at least some of my Democratic colleagues will recognize the unwisdom of canceling student loan debt, its blatant unfairness to individuals who have already paid off their student loans or who never went to college and the negative effect it would have on our inflation- ridden economy.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.