Unconstitutional Student Debt Coup
The Wall Street Journal comments on Biden’s Half-Trillion-Dollar Student-Loan Forgiveness Coup
Well, he did it. Waving his baronial wand, President Biden on Wednesday canceled student debt for some 40 million borrowers on no authority but his own. This is easily the worst domestic decision of his Presidency and makes chumps of Congress and every American who repaid loans or didn’t go to college.
The President who never says no to the left did their bidding again with this act of executive law-making, er, breaking. The government will cancel $10,000 for borrowers making less than $125,000 a year and $20,000 for those who received Pell grants. The Administration estimates that about 27 million will be eligible for up to $20,000 in forgiveness, and some 20 million will see their balances erased.
But there’s much more. Mr. Biden is also extending loan forbearance for another four months even as unemployment among college grads is at a near record low 2%. Congress’s Cares Act deferred payments and waived interest through September 2020, but Donald Trump and Joe Biden have extended the pause for what will now be nearly three years.
Most of the rest will only make de minimis payments because Mr. Biden is also sweetening the income-based repayment plans that Barack Obama expanded by fiat. Borrowers currently pay only up to 10% of discretionary income each month and can discharge their remaining debt after 20 years (10 if they work in “public service”).
The Penn Wharton Budget Model estimates that canceling $10,000 for borrowers earning up to $125,000 will cost about $300 billion. The Pell grant addition could increase this by as much as $270 billion. The four-month freeze on payments will cost $20 billion on top of the roughly $115 billion it already has.
Totaling the Cost
- $300 billion for base plan
- $270 billion for Pell extension
- $135 billion for freeze
- $??? billion for de minimus payments across the board
That totals to $705 billion and is at least somewhat higher.
Under What Authority
I asked a red-state attorney friend of mine, someone who has argued cases before the Supreme Court for his take. Here goes.
Over the past 20 years, Congress has delegated more and more authority to the executive branch and the judicial branch. This allows members of Congress to run for reelection without having taken any damn positions.
I doubt that he is doing this without a legal rationale. It’s likely to be a very poor legal argument, but I’m certain he has some sort of argument to present.
As for a challenge, standing is difficult. You can’t sue the government if you’re only stake in an action is that you are a taxpayer. And right now, I don’t know who else is hurt by this.
Nancy Pelosi on Biden’s Authority
Nancy Pelosi: “People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay, but he does not have that power. It has to be an act of Congress.“
What’s Going On?
- Biden likely understands what he did is unconstitutional. But as my friend suggests, he has some semblance of an excuse that he can use.
- It is perfectly timed for the mid-term elections. Democrats are increasingly likely to hold the Senate due to extremely poor candidate selections demanded by Trump.
Low Risk Play
This is a low risk play. It bites only if it costs Democrats the Senate. It could help them. It could also energize Democrats and some independents on the abortion issue.
Assume someone does get standing and the Supreme Court tosses the package. Democrats have another “blame the courts” campaign message on top of abortion.
If Biden was going to lose the House anyway, what does he have to lose by taking this unconstitutional gambit?
That’s the most likely explanation of what’s going on. We will soon find out if someone with standing even has ability to challenge this madness.
Inflationary Economic Madness
Biden just authorized and unprecedented $705 billion with virtually no reforms to prevent this from happening again.
Indeed, it is a moral hazard that is specifically geared to make it happen again.
And it is just a down payment on Progressive inflationary madness if somehow the Left can hold on to the House.
Will Trump Cost Republicans the Senate Once Again?
For more on the Democrat’s odd of holding the Senate, please see Will Trump Cost Republicans the Senate Once Again?
I already expect more inflation due to the ridiculously-named Inflation Reduction Act (more on items hidden in that bill coming up).
It will be an inflationary inferno if somehow Democrats can hold the House.
This post originated on MishTalk.Com.
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Mish
The three places with the largest average balance are Washington D.C. , Maryland, and VirginIa. It almost gives the appearance of self-dealing, but thank god its just a coincidence.
Highest Average Student Loan Debt per Borrower
Washington, D.C. ($55,508)
Maryland ($43,619)
Georgia ($42,207)
Virginia ($39,892)
South Carolina ($38,915)
“I don’t see R-leaning voters in those two states cutting off their noses to spite their faces and either voting a different party”In their shoes, I would suck it up and vote for Oz and Walker, but my hatred of what the Democrats have become is the driving factor for that, not loyalty to the GOP or Trump.Not every non-partisan shares my feelings. They’ve certainly driven away swing voters by nominating those two.
(NEWSER) – Tough times are ahead for China, the founder and CEO of the country’s largest private company warned employees in a memo seen as unusually candid. In the leaked memo, Huawei founder Ren Zhengfei said the technology company needs to make “survival” instead of growth its main focus for the next few years, the Guardian reports. “The next decade will be a very painful historical period, as the global economy continues to decline,” Ren wrote, citing issues including COVID restrictions, the war in Ukraine, and the “continued blockade” of some of its technology by the US and other countries.
“With survival the main principle, marginal businesses will be shrunken and closed, and the chill will be felt by everyone,” Ren said, according to financial news outlet Yicai.
is about 2% in any year, meaning that someone born in the year 2000
would have about a 38% chance of experiencing one by now. And that
probability is only growing,”
waive or modify any statutory or regulatory provisions relating to
Title IV student financial aid in times of war or military operation or
national emergency”
any Federal, State or local official in connection with a national
emergency.”
monetized by the Fed—there is no fiscal standards left in Washington at
all. And Donald Trump and the GOP were every bit as culpable as Biden.
issued as of June 30, 2021, with 708 borrowers receiving the maximum
loan amount of $10 million.Yet of that massive outpouring of “loans,” the Small Business Administration (SBA) data shows that about 94% of PPP loans that were approved in 2020 had been forgiven as of December 2021!”