White House struggles to answer questions about student debt plan costs



CNN

The White House in trouble for a second consecutive day to answer questions about President Joe Biden student loan cancellation plansimultaneously claiming that the president waited until the plan was ‘fiscally balanced’ before unveiling it and that there was no way of knowing how much would the plan cost.

During a press briefing on Thursday, White House press secretary Karine Jean-Pierre continued to insist that the plan to write off thousands of dollars in federal student loan debt for million Americans would be “fully paid because of the work this president has done with the economy.”

When asked specifically if the administration had a better idea of ​​the total price of the program, Jean-Pierre began his response by saying that the president’s “record of fiscal responsibility is second to none” before detailing a list. of its economic achievements. But she never gave an estimate of the cost of the plan.

“All of that, cost-wise, will also depend on how many canceled loans were due to be repaid, it will depend on how many borrowers actually take this opportunity before we have a real idea,” she said. .

Throughout the briefing, the press secretary was pressed on the numbers. She claimed the administration did not believe the move would increase the deficit because “the $1.7 trillion…we’ve done a good job of reducing the deficit” – referring to an administrative projection of by how much the federal deficit will shrink in fiscal year 2022 — and the “$50 billion a year will go back” to the Treasury once student loan repayments begin in December.

She claimed the Treasury was “getting zero for the past two years” as repayments were suspended, but on Wednesday National Economic Council Deputy Director Bharat Ramamurti said about $2 billion a month was still repaid by borrowers during the break, compared to $6 billion a month normally.

The White House offered a more pointed defense of its student loan cancellation plan on Twitter, calling out GOP critics who had Paycheck Protection Program loans canceled.

“MP Marjorie Taylor Greene got $183,504 off PPP loans”, Tweet from the White House said in response to the Georgia Republican’s criticism of Biden’s plan. “Congressman Matt Gaetz got $482,321 off PPP loans,” read another in response to similar complaints from the Florida lawmaker.

The White House tweeted similar responses to criticism from GOP Reps. Mike Kelly of Pennsylvania, Vern Buchanan of Florida, and Markwayne Mullin and Kevin Hern of Oklahoma.

Asked on Thursday if the administration would eventually publish a cost estimate, Jean-Pierre said that “the Ministry of Education will take the lead”.

When asked why the president waited so long to make his decision to cancel the debt, she replied that Biden “wanted to do it in a balanced fiscal way. And there was this legal review. … We wanted to make sure that the legal review had been done.

But pressed to know how he could be fiscally responsible without an estimate of public costs and without details of how the plan would be paid for or who would pay for it, Jean-Pierre insisted the administration “did not see this as irresponsible “.

“We don’t see this as irresponsible,” she said. “We see this as a fiscally responsible and balanced approach. I remember people saying, “Why don’t you make $50,000? We don’t want to do this because we want to make sure we do it in a fiscally responsible way. Again, not to please everyone, but to make sure we deliver on that promise, but also to do it in a smart and fiscally responsible way.

Ramamurti had offered more explanation to CNN’s Phil Mattingly on Wednesday about the difficulty in providing a top number.

He said that without knowing how many borrowers are signing up, it would be difficult to know the total cost. “That plays a big role in how much it’s going to cost,” he said.

But beyond that, he said other factors made it difficult to provide a firm figure. He said there are different estimates of default rates, which would affect the total figure. He added that the relief would also bring additional tax revenue if recipients started small businesses or bought homes.

This story was updated with additional information on Thursday.

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