Nov 15, 2020
Rejecting the idea that President-elect Joe Biden's presidency is inevitably doomed as a result of Republican intransigence, author and organizer Astra Taylor voiced a sentiment Monday shared by many on the left as she argued the incoming Democratic administration "has a progressive mandate and must use all the power at [its] disposal to materially improve people's lives and boost public morale" by enacting bold policies such as the immediate cancellation of student debt by executive authority come January.
Also on Monday, journalist David Dayen wrote in The American Prospect that "one of the more high-impact (and controversial)" things that Biden--who will have to endure a hostile Congress if control of the Senate remains in the hands of Majority Leader Mitch McConnell (R-Ky.)--"can do without having to pass new legislation... [is] to cancel student debt" under the Education Department's "compromise and settlement authority."
According to Dayen, "The federal government directly issues almost all student debt, and has the discretion to reduce balances completely, or anything short of that."
Now that Senate Minority Leader Chuck Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), and scores of progressive activists have, as Common Dreamsreported last week, officially pushed student debt cancellation via executive authority into the realm of possibility, Dayen said "it appears that the powers that be are getting nervous... [and] fashioning a list of reasons to shoot it down."
One example is Jason Furman, formerly an economist in the Obama administration, "insisting that student debt forgiveness would be taxable," even though, according to Dayen, "the government forgives student debt all the time without making it a taxable event, and the IRS has every discretion to follow its past rulings... and say that student loans are a non-taxable scholarship."
Another instance is when The Week columnist Damon Linker suggested on Sunday night that Democrats "are wildly underestimating the intensity of anger college loan cancellation is going to provoke."
Linker acknowledged that "those with college debt will be thrilled, of course."
"But lots and lots of people who didn't go to college or who worked to pay off their debts? Gonna be bad," he predicted, prompting a deluge of criticism.
Dayen noted that "there are those who will preach about the unfairness of it all, that those who didn't go to college or paid off their loans get nothing."
"This pitting of people against one another is bad even in the best of times," Dayen wrote. "In the worst of times like right now, it's downright stupid."
Washington Post reporter Dave Wiegel said that "giving people free stuff is popular," pointing out that "it was clearly part of Trump's overperformance."
There is, he added, "no evidence of any voters opposing Trump because of it." Yet, "like clockwork, Very Serious People warn Dems that if they give people free stuff there'll be a backlash."
\u201cGiving people free stuff is popular, and it was clearly part of Trump\u2019s overperformance. No evidence of any voters opposing Trump bc of it. Like clockwork, Very Serious People warn Dems that if they give people free stuff there\u2019ll be a backlash.\u201d— David Weigel (@David Weigel) 1605532964
The student debt crisis has reached $1.7 trillion and growing, Public Citizen noted on social media, arguing that "this debt will drag the economy down for years to come if loans are not forgiven."
"Student loan debt is holding back a whole generation from buying homes, starting small businesses, and saving for retirement--all things we rely on to grow our economy," Warren tweeted on Monday. "Executive Action to #CancelStudentDebt would be a huge economic stimulus during and after this crisis."
\u201cStudent loan debt is holding back a whole generation from buying homes, starting small businesses, and saving for retirement \u2013 all things we rely on to grow our economy. Executive action to #CancelStudentDebt would be a huge economic stimulus during and after this crisis.\u201d— Elizabeth Warren (@Elizabeth Warren) 1605551543
According to Taylor, not only would cancelling student debt be wildly popular and economically stimulative, it be would be "extremely dangerous" if Biden and congressional Democrats fail to show that they are willing to deliver for working people. She writes:
We are in a public health and economic crisis; if he doesn't act decisively, Democrats will face a bloodbath in 2022 or 2024. The fascist threat of Trumpism is not going away. If anything, we've learned that Trumpism is very popular. But Mitch McConnell is not the president, and his influence must be diminished as much as possible, which will require Biden to do something not in his nature--fight Republicans.
Part of the problem is that in the U.S. we effectively have two ruling-class parties; that's why our politics and governance are so muddled. The Republicans denounce the Democrats as "cultural elites" while stirring up racial resentment and playing divide-and-conquer politics in order to cut taxes for the rich. Corporate Democrats, beholden to their donors, are incapable of offering an adequate response. They refuse to campaign on and go to bat for the social policies people need to survive and thrive.
Dayen pointed out that millions of people in the U.S. "have not needed to make student loan payments" since March. He called "taking hundreds of dollars a month off the books of 33 million people... an unsung part of the economic effect of coronavirus relief."
However, now that the freeze on payments is scheduled to end on December 31, millions of Americans will "have the sudden shock of an additional large bill," he explained, at precisely the moment when millions are "out of work and [have] exhausted their pandemic assistance and even unemployment benefits."
For this reason, Dayen called cancelling student debt "not just a nice theory, but an imperative, to prevent a snap-back that is sure to crush household balance sheets."
"The last thing we need with the fledgling recovery is another $13 billion or so flowing out of the economy every month," Dayen wrote.
That "would hurt everybody," he added, but "Biden can make this significantly better in a very visible way. And he can do it by himself."
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