Biden nears decision on student loans as inflation worries mount
(CNN) — Top White House aides have drafted the order for canceling some student loan debt, but they’re still waiting for President Joe Biden to make up his mind on whether to go forward with it.
A pair of commencement speeches scheduled for this weekend might seem like a perfect setting for an announcement, but White House aides expect that the President will only touch on the subject then. The aides are still expecting that a final decision will take more time.
For months, internal conversations have circled around whether the President actually has the legal authority to unilaterally cancel loans, not to mention Biden’s own continuing skepticism that canceling loans violates principles forged as a pre-Baby Boomer representing a state that’s the homeland of consumer debt.
Biden and aides have also long been worried that the right answer to Republican attacks that Democrats are all about government handouts and catering to elites isn’t to be seen as handing out money to the most highly educated. That’s what’s led them to eye a $125,000 annual income limit for forgiveness, believing that limit is both in line with the progressive income tax model and good politics.
In recent weeks, though, people involved tell CNN that nearly every internal conversation about what to do has eventually turned to asking if canceling the debt will feed inflation just at the moment when Democrats are hoping the rates will start to tick down ahead of the midterms. After spending much of 2021 worried that they weren’t going big enough in the face of the crisis, the economic situation — including the threat of tipping into a recession by next year — has Biden and his inner circle nervous about going any bigger at all.
Forces inside and outside the White House are urging Biden to announce his cancellation decision jointly with what is expected to be an end to the moratorium on student loan payments, which was started during the pandemic under the Trump administration and, after two Biden extensions, is set to expire on August 31. The goal is to make the dual announcement by early summer so that borrowers can prepare.
Outside the White House, multiple Democrats involved see a familiar Biden pattern playing out again: Letting himself be defined by the long and tortured process rather than the end result, while agreeing to a priority of his party’s liberal wing but with a compromise that feeds complaints that his heart’s not really in it. In a midterm environment where Democrats could use all the help they could get, they say, Biden’s wavering is sapping himself of whatever political benefit he could get, particularly among younger and Black voters who would statistically benefit the most from forgiveness and whose enthusiasm for Democrats has plummeted.
“Every day that he drags on — he may end up doing the right thing and not getting the appropriate credit,” said Rep. Ro Khanna, a California Democrat who was a co-chair of Sen. Bernie Sanders’ 2020 presidential campaign and says progressives need to accept a middle ground on this issue. “If he announces it, and says ‘I’m doing it,’ he looks decisive and gets the political credit.”
