The Hill’s Morning Report — Will Biden’s student loan plan pump up the base?
President Biden on Wednesday unveiled a student loan forgiveness plan to appeal to tens of millions of borrowers, many of them young, with a simple refrain: Under Democrats, the government works to help those who need it the most.
The Americans he has in mind, the president said, are “working and middle-class people hit especially hard during the pandemic.”
Perhaps. But the president has agonized since his campaign about how to fulfill the aims of liberals, who sought substantial, near-total student loan debt forgiveness, and those in both parties who chafe at changes they see as an unfair giveaway, or, worse, a wasted, inflationary federal exercise in currying political favor and one that is unlikely to constrain sky-high college tuitions and costs.
The Associated Press reported that if Biden’s plan survives legal challenges that are almost guaranteed, it could offer a windfall to many ahead of this fall’s midterm elections.
More than 43 million people have federal student debt, with an average balance of $37,667, according to federal data. Nearly a third of borrowers owe less than $10,000, and about half owe less than $20,000. The White House estimates that the president’s plan would eliminate the federal student debt of about 20 million people.
“That’s 20 million people who can start getting on with their lives,” Biden said at the White House. “All this means, people can start to finally crawl out from under that mountain of debt. To get on top of their rent and utilities. To finally think about buying a home or starting a family or starting a business.”
The outline of the administration’s plan calls for erasing up to $10,000 in federal student loan debt for borrowers making less than $125,000 annually. For those in lower income brackets who received Pell Grants, the forgiveness will be $20,000. In addition, the current moratorium on repaying student loan debts, which expires next week, will be extended for the seventh time until January (The Hill).
The White House added an additional ingredient: Borrowers with undergraduate loans can cap their repayment at 5 percent of their monthly income. Current students with loans are also eligible for this debt relief, and dependent students will be eligible for relief based on their parents’ income.
For details about elements of the policy, borrowers can check studentaid.gov.
Biden, joined by Education Secretary Miguel Cardona, drew a sharp contrast between the aims of Democrats, who he said are trying to lift the burden of debt from lower-income, higher education borrowers whose opportunities are constrained by steep economic obligations, and those wealthy enough to lessen their obligations with tax breaks.
When a reporter asked the president whether his plan was unfair to those who have repaid student loans or chose not to borrow in the first place, Biden replied, “Is it fair to people who, in fact, do not own multi-billion-dollar businesses if they see one of these guys getting all the tax breaks? Is that fair? What do you think?” (The Hill).
Some progressives, who have long pushed for $50,000 in debt forgiveness, were disappointed (The Hill). Others on the left praised the plan. Sen. Elizabeth Warren (D-Mass.), who made the issue part of her own run for the White House and met with Biden to discuss his options, tweeted, “Today is a great day. 20 million Americans will never have to make another student loan payment. Another 23 million Americans will have significant relief on their student loans. This is about helping America’s middle class and providing relief to those who need it most.” Moderates, on the other hand, now have to respond to questions about whether Biden’s plan worsens inflation (The Hill).
And Republicans, who are assailing the administration over inflation and rising prices, pounced. Senate Minority Leader Mitch McConnell (R-Ky.) said Biden’s plan amounted to a “wildly unfair redistribution” of wealth (The Hill).
Some economists who served previous Democratic presidents were unimpressed.
“Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless,” tweeted Jason Furman, former adviser to former Presidents Clinton and Obama. “Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.”
Rep. Tim Ryan (D-Ohio), who is running for a Senate seat in a red state won decisively by former President Trump two years ago, distanced himself from Biden’s plan. “Instead of forgiving student loans for six-figure earners, we should be working to level the playing field for all Americans,” he said in a statement.
Beth Akers, an economist and senior fellow writing for the right-leaning American Enterprise Institute, on Tuesday said the net result of the president’s loan forgiveness plan is political more than economically cohesive, and she noted that Biden acted with his own say-so and opted to sidestep the legislative branch in a tough election year (Bloomberg News).
“If Biden were in it to help struggling borrowers, he’d be working with Congress to enact systemic reform that would make things better for future students,” she added, “shoring up existing safety nets, streamlining repayment to minimize the hassle for borrowers, and avoiding driving up future borrowing and prices.”
Related Articles
▪ The Hill: Here’s what’s inside Biden’s historic student debt forgiveness plan.
▪ The Hill: How will Biden’s student loan debt plan impact inflation?
▪ The Hill: Student loans received prior to a cutoff date of June 30 are eligible for the president’s debt forgiveness plan.
▪ The New York Times: What you need to know about Biden’s loan forgiveness plan.
▪ CNBC: Explainer: Biden’s plan for borrowers: Who is eligible, how it works, when to apply.
▪ USA Today: For public workers, the administration also canceled about $10 billion in student loan debts, benefiting 175,000 people.
LEADING THE DAY
➤ POLITICS
Tuesday night’s elections, headlined by a massive special election result in New York, gave national Democrats a major boost and hope that the November elections might not be nearly the walloping prognosticators and political watchers have been expecting for much of the past year.
Pat Ryan, a Democratic county executive, narrowly defeated Republican Marc Molinaro in the race for a House seat, previously occupied by New York Lt. Gov. Antonio Delgado (D), in New York’s Hudson Valley that has been a swing district in recent years. The results were the latest in a series of surprises for the party in power, which struggled for months to find an effective messaging strategy.
Ryan campaigned in large part on abortion access after the Supreme Court struck down Roe v. Wade in late June, with his win coming only weeks after Kansans voted against an state constitution amendment that would have said there’s no right to an abortion in the state. The two contests show the party that it has a potent talking point that is driving voters out even during a time with high inflation and economic uncertainty.
“It’s a friendly reminder that, every time the narrative counts us out, we know how to change it,” Antjuan Seawright, a Democratic strategist and senior adviser to the House Democratic campaign arm, said. “You can’t always predict what defines an election six or seven months out.”
The road to keeping the majority is still a tough one for Democrats. After the results Tuesday night, the party holds a 221-212 advantage, with two vacancies, meaning Republicans need to pick up only a small number of seats. National Republican Congressional Committee Chairman Tom Emmer (R-Minn.) on Wednesday dismissed the result as a “quirk” (Axios).
▪ Niall Stanage: The Memo: New York provides latest example of abortion’s impact.
▪ FiveThirtyEight: Yes, special elections really are signaling a better-than-expected midterm For Democrats.
▪ James Hohmann, The Washington Post: In New York, Democrats chart a new, centrist course.
▪ Nate Cohn, The New York Times: Growing evidence against a Republican wave.
However, there are still issues for Democrats on the ballot in November. As The Hill’s Brett Samuels details, some remain reluctant to tether themselves to Biden, even amid a stretch of legislative victories in recent weeks.
Buoyed by those results, including the passage of the reconciliation bill, Biden has seen his approval ratings tick upward. However, that has not translated to the campaign trail as Democrats have yet to embrace him with open arms in their own races.
▪ The Hill: LGBTQ+ candidates win in Florida in aftermath of “Don’t Say Gay.”
▪ The Washington Post: Ex-Interior Secretary Ryan Zinke lied to investigators in casino case, watchdog finds.
▪ ABC News: Foreign politicians, an indicted election clerk and Vanilla Ice: Inside the revolving door of Trump’s Mar-a-Lago.
IN FOCUS/SHARP TAKES
➤ CONGRESS
A fight is brewing on Capitol Hill as top Democrats scrap and claw to fill the top spot on the House Oversight and Reform Committee following the ouster of Chairwoman Carolyn Maloney (D-N.Y.) on Tuesday night.
At least three House Democrats have their sights set on nabbing the post, which was held for nearly a decade by the late Rep. Elijah Cummings (D-Md.) before Maloney took over in 2019. Rep. Gerry Connolly (D-Va.) was first out of the gates on Wednesday, saying in a statement that he has made the panel his “top priority” during his 14 years on it.
“We need a tested leader who will not be timid in the face of Republican insurrectionists. One who has a deep understanding of the issues facing our Committee and our country. A collaborator who can be a bridge to our talented and diverse caucus,” he said in a statement. “I believe I can be that leader, and look forward to earning the support of my colleagues.”
Rep. Stephen Lynch (D-Mass.), the chairman of the National Security Subcommittee, also made it clear his intentions to win the top spot. In a letter to House Democrats, he noted he is “the most senior member of the Oversight Committee seeking this position.”
However, one figure of interest is Rep. Jamie Raskin (D-Md.). Despite having been in office since only 2017, he served as the lead impeachment manager of Trump’s Senate trial last year, giving him a national profile unlike either of the other two candidates.
Raskin, who chairs the Civil Rights and Civil Liberties Subcommittee, said on Wednesday that he is “strongly considering” a run. He was also handed a boost as Rep. Ro Khanna (D-Calif.), a progressive who was also initially considered a possible candidate for the post, tweeted that he “would like to see” Raskin run for the post and called on progressives to rally behind him.
“He has done a masterful job standing up for democratic principles and norms and embodies the highest ideals of patriotism,” Khanna said. “He is meant to lead in this moment.”
If Democrats lose the majority, the top member on the panel will be tasked with combating GOP investigations of the president, including into his son Hunter Biden (The Hill).
▪ Politico: Maloney loss prompts Dem pileup for top spot on investigative panel.
▪ Government Executive: The race has begun to be the next House Democrat overseeing federal agencies.
▪ The Hill: A House panel detailed the pressure on the Food and Drug Administration by the former Trump White House behind discredited COVID-19 treatments and vaccines in 2020, according to a report released on Wednesday.
The Senate Judiciary Committee announced it will hold a Sept. 13 hearing to dive into whistleblower allegations about security problems at Twitter. The hearing could have consequences for Elon Musk’s now-withdrawn bid to purchase Twitter. The Senate investigation will feature testimony by Peiter “Mudge” Zatko, who will appear in response to a subpoena regarding his critical disclosures about the company, which Twitter denies (The Hill).
➤ STATE WATCH
The California Air Resources Board plans to ban sales of gasoline-powered cars by 2035. The anticipated regulatory move is expected to transform the nation’s auto market (Politico).
Conor Friedersdorf, The Atlantic: Gavin Newsom, the Ron DeSantis of the left.
In Texas, a federal judge this week temporarily blocked the federal government from a legal interpretation that would require hospitals in the state to provide abortion services if the health or life of the mother is at risk. The Department of Health and Human Services said it was reviewing the decision.
In Idaho a federal judge on Wednesday temporarily blocked the state’s near-total ban on abortion, saying it violated the Emergency Medical Treatment and Labor Act, a federal law commonly referred to as EMTALA (The Hill). The state’s law, scheduled to take effect today, is now on hold while the Justice Department suit is argued.
The Hill: Utah sues Biden over restored Grand Staircase-Escalante and Bears Ears national monument boundaries.
OPINION
■ Beware the emerging alliance between Russia and Iran, by David Ignatius, columnist, The Washington Post. https://wapo.st/3wuYcFf
■ Can Japan learn to love nuclear power again? by Gearoid Reidy, columnist, Bloomberg Opinion. https://bloom.bg/3QTBC1h
WHERE AND WHEN
The House will meet at 10 a.m. for a pro forma session on Friday. It will reconvene on Sept. 13.
The Senate convenes on Friday at 10 a.m. for a pro forma session during its summer recess, which ends Sept. 6.
The president will depart the White House this afternoon to speak at a 5 p.m. reception hosted by the Democratic National Committee in Montgomery County, Md., outside Washington. Biden will headline a DNC grassroots rally at 7 p.m. and be back at the White House by 8:25 p.m.
Vice President Harris has no public events.
The White House daily press briefing is scheduled at 12:45 p.m.
The annual economic policy forum at Jackson Hole, Wyo., sponsored by the Federal Reserve Bank of Kansas City, begins today (Reuters and The Wall Street Journal have previews).
Economic indicator: The Labor Department at 8:30 a.m. will report on filings for unemployment benefits in the week ending Aug. 20.
🖥 Hill.TV’s “Rising” program features news and interviews at http://thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here.
ELSEWHERE
➤ INTERNATIONAL
Ukrainian President Volodymyr Zelensky has condemned the civilian deaths of what this morning are 25 victims, including two children, killed on Wednesday by a Russian rocket attack aimed at a train station in central Ukraine (The Associated Press). The strike occurred during Ukraine’s independence day, also the six-month mark since Russia’s invasion of its neighbor.
In Russia, authorities detained Yevgeny Roizman, the former mayor of Yekaterinburg and an outspoken critic of President Vladimir Putin for comments made about the war in Ukraine. Roizman was charged with “public dissemination of deliberately false information about the use of the armed forces of the Russian Federation,” according to a post on his Telegram account (The Wall Street Journal).
Laura Kelly, reporting for The Hill from Kyiv: Ukraine puts captured Russian war machines on display at muted Independence Day.
In a major policy shift, Japan announced on Wednesday that it will restart more idled nuclear power plants and look into the development of next-generation reactors in response to increased gas prices throughout the country. Japanese Prime Minister Fumio Kishida made the announcement on Wednesday, saying that the government is also looking into how to extend the lifespan of current reactors. The decision comes more than a decade after the Fukushima nuclear disaster, which was the most severe nuclear accident since Chernobyl 25 years earlier (Reuters).
The Hill and NBC News: Three U.S. soldiers suffered minor injuries in Syria during rocket attacks, the Pentagon said on Wednesday.
➤ PANDEMIC, POX & HEALTH
First lady Jill Biden tested positive for COVID-19 in a “rebound” case of the virus, having tested negative only a day earlier. The first lady is not experiencing any COVID-19 symptoms, a spokesman said on Wednesday, adding that she will remain in isolation in Delaware. The president is considered a close contact of hers, so he will mask for 10 days when indoors and close to others (The Hill).
More than 2 million Americans are not working because of long COVID-19, a loss of some $170 billion in wages a year, according to a Brookings Institution report released on Wednesday (The Wall Street Journal).
Japan, previously one of the most restrictive countries in terms of COVID-19 and international visitors (remember the Olympics?), announced Wednesday a loosening of its requirement for vaccinated travelers to have a negative coronavirus test before being allowed to enter the country. Japan still requires tourists to be a part of an authorized tour group, their every move watched closely by a licensed guide (although the guide restriction is under discussion) (The Washington Post).
Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,042,398. Current average U.S. COVID-19 daily deaths are 390, according to the Centers for Disease Control and Prevention.
THE CLOSER
Take our Morning Report Quiz
And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by this week’s 102nd anniversary of the certification of the 19th Amendment that gave women the right to vote, we’re eager for some smart guesses about the history of the famed constitutional amendment.
Email your responses to asimendinger@thehill.com and/or aweaver@thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.
Roughly how many women were handed the right to vote in the 1920 presidential election following the 19th Amendment’s certification?
1. 21 million
2. 26 million
3. 33 million
4. 40 million
What was the 36th state to ratify the 19th Amendment, marking the completion of the ratification process?
1. West Virginia
2. Tennessee
3. Delaware
4. None of the above
Women’s Equality Day was established in which year?
1. 1970
2. 1973
3. 1977
4. 1980
What year did the 48th and final state eventually ratify the 19th Amendment?
1. 1970
2. 1976
3. 1984
4. 1990
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