Biden’s student debt forgiveness is a potential midterm benefit for Democrats — and a big gamble

Biden’s student debt forgiveness is a potential midterm benefit for Democrats — and a big gamble

WASHINGTON — Less than three months before the midterm elections in November, President Joe Biden shook up the race to control Congress with a landmark move on Wednesday to cancel the student loan debt of millions of Americans.

However, his move is a big gamble, presenting both an opportunity to energize young voters and giving Republicans new lines of attack on justice and wealth.

Biden’s announcement could have ripple effects in the Senate and House race across the country. Come as democrats, who face headwinds to maintain power, showed signs of exceeding initial expectations after a series of legislative victories in Congress and a Supreme Court decision nullifying the right to abortion.

Most: ‘Debt and no degree’: Biden cancels up to $20K in student loan debt: Live updates

Biden’s Big Bet

The White House is betting that the president’s decision to cancel at least $10,000 in student loan debt for millions of borrowers, and as much as $20,000 for Pell Grant recipients, will motivate disheartened young voters to vote during a non-voting election. presidential.

But Republicans have decided to frame Biden’s student debt relief plan as a “handout for the rich” — rewarding liberal college elites at the expense of Americans who couldn’t afford college and others who worked hard to pay off their debts.

While some progressives have sought even more debt relief, the move delivers on one of Biden’s key campaign promises to young voters.

“That allows him to go back to them and say, ‘Send us back, send me a Democratic Congress back, and we’ll do more for you,'” said Todd Belt, professor and director of the political management program at George University. Washington. . “So I think this will help with the lack of enthusiasm that we see in Gen Z voters.”

At the same time, the plan will not be popular with all Americans.

“The risk is that there’s a very ingrained view in American society that you have to work for your education,” Belt said. “And people tend to think, ‘I had to pay for mine, you should pay for yours’.”

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President Joe Biden speaks about student loan debt in the Roosevelt Room of the White House on August 24, 2022 in Washington.

President Joe Biden speaks about student loan debt in the Roosevelt Room of the White House on August 24, 2022 in Washington.

Calculus for the Democrats

  • Very popular with young voters. A Harvard University survey found that 85% of Americans ages 18 to 29 support some form of government action on student loan debt. This voting bloc votes overwhelmingly Democrat and supported Biden in 2020.

  • Electoral mathematics. That doesn’t necessarily mean more young voters will go to the polls, especially as some progressives wanted more. While Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren, D-Mass and several progressive groups have praised Biden’s action, they have pushed for at least $50,000 in student loan debt relief.

  • A reason to hope? Democrats are much more optimistic about their chances in the midterm elections today than they were a few months ago. Biden’s allies say the president has already fulfilled a key priority for young voters with historic climate spending on the Inflation Reduction Act. The overthrow of Roe v. Wade by the Supreme Court also energized the base. And with student debt cancellation, Democrats have given young progressive voters a third reason to vote for them.

Student loan debt holders protest outside the White House staff entrance on July 27, 2022 in Washington, D.C.

Student loan debt holders protest outside the White House staff entrance on July 27, 2022 in Washington, D.C.

Unpacking the Republican Strategy

  • Many taxpayers do not have student loans. More than 43 million people have federal student loan debt in the US, and the average borrower has about $37,000. But Republicans are focusing on the many more American adults — about 80 percent — who don’t have federal student loans.

  • Reaching out to blue collar Americans. In recent election cycles, Republicans have accumulated huge electoral advantages among white voters without college degrees, particularly in rural areas.

  • Where to watch. Republicans could use Biden’s student loan cancellation as a wedge to try to pull even more of these voters out of Rust Belt states like Pennsylvania, Wisconsin and Ohio, which have competitive Senate races.

Who qualifies: Do I qualify for student loan forgiveness? What to know about Biden’s debt plan.

Opposition: ‘Good luck to the rich’: Republicans heat up attacks as Biden weighs student debt forgiveness

Senate Minority Leader Mitch McConnell, R-Ky., called Biden's action on student loans a

Senate Minority Leader Mitch McConnell, R-Ky., called Biden’s action on student loans a “slap in the face for American workers who sacrificed to pay their debts.”

The big question: inflation

Biden, whose decision to cancel student loan debt has dragged on for months, has hesitated in part because of concerns that any action could further accelerate 40-year high inflation. As the midterm elections approach, inflation and the economy remain one of the Democrats’ biggest vulnerabilities, despite the drop in gasoline prices last month.

Prominent Democratic economists, led by former Treasury Secretary Larry Summers, have argued that the billions more collectively in the pockets of Americans who will not have to pay the government could increase demand and further increase inflation. Republicans worked Wednesday to link student debt relief to anxieties about rising consumer prices.

The White House dismissed concerns about inflation. Officials said the resumption of government debt payments — following an extended moratorium that now ends on Dec.

what are they saying

  • “I think it reinforces that elections have consequences,” said Cedric Richmond, a former Biden White House adviser and senior adviser to the DNC, arguing that there will be young voters. “The fact that their president did this, I think, encourages them to have the system work when you’re involved in it.”

  • Most Democrats welcomed the move, but some re-election candidates tried to distance themselves. “In my opinion, the administration should have targeted relief further and proposed a way to pay for this plan,” said Senator Michael Bennett, D-Colo.

  • Minority leader Mitch McConnell criticized Biden’s action. “The Democrats’ student loan socialism is a slap in the face to American workers who have sacrificed to pay off their debt or made different career choices to avoid debt,” he said. “A wildly unfair redistribution of wealth to people with higher incomes.”

  • Jason Furman, former economic adviser to President Barack Obama, raised concerns about inflation. “Pumping around half a trillion dollars worth of gasoline on the inflationary fire that is already burning is reckless,” he said in a tweet.

  • Mark Zandi, chief economist at Moody’s Analytics, recoiled from that logic. “It is more clear that the impact on growth and inflation in 2023 will be marginal,” Zandi said. “Ending the moratorium will weigh on growth and inflation, while debt relief will support them. The net is largely a wash.”

the big picture

Simply put, Biden’s announcement is unprecedented in the country’s student loan history. And it’s sure to have political ramifications.

Biden and Democrats hope the momentum for millions of indebted Americans will outweigh the setback. But even the president, in revealing his long-awaited decision, acknowledged the conflicting views.

“I understand that not everything I’m announcing today is going to make everyone happy,” Biden said, noting that some say it goes too far, others not enough. “But I believe my plan is responsible and fair. It focuses on benefiting middle-class and working-class families.”

Contact Joey Garrison on Twitter @joeygarrison.

This article originally appeared in USA TODAY: Biden’s Student Debt Action Presents Opportunity, Risk for Democrats

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