The White House says it will veto a Republican-led House measure that stops the massive student loan bailout.
The bill in question is H.J. Res. 45, which criticizes a debt plan that erases up to $20,000 in student loan debt and puts U.S. taxpayers on the hook for the bad loans. If Congress were to pass H.J. Res. 45, the President would veto it,” the statement from the White House said.
CNBC reported that Biden’s plan, if successful, will be costly to American taxpayers. It would result in an average burden of $2,500 per taxpayer, according to research by the National Taxpayers Union.
In the policy statement, the administration outlined its justification for the student loan bailout, saying: “Nearly 90 percent of the relief provided by the Department of Education would go to Americans earning less than $75,000 per year, and no relief would go to any individual or household in the top 5 percent of incomes.”
The White House asserts that it has the power to erase the debt because of the Covid emergency. “That authority has been used by multiple administrations over the last two decades following the same procedures to protect borrowers from the effects of national emergencies and has never been subject to the Congressional Review Act. The Department’s action here should be treated no differently.”
READ: What would Jesus say about erasing student debt?
The Congressional Budget Office (CBO) published a letter (pdf) in September 2022, detailing the estimated budgetary effects of the student loan forgiveness program, saying they estimate the total cost of cancellation at about $400 billion over the 2023-2033 period, on a net-present-value basis.
The Congressional Budget Office conducted a cost estimate (pdf) for the impact of H.J. Res. 45 saying it would “reduce direct spending, on a net-present-value basis, by $319.6 billion in 2023, and by $315.6 billion over the 2023-2033 period.”
Latest estimates by independent economic watchdog groups say the bailout’s true cost is closer to $1 trillion.
Rep. Bob Good (R-Va.) says it is another example of dangerous fiscal policy that is shaping the Biden administration. “Given his fiscal track record, it is no surprise that President Biden would oppose any action to undo his unlawful and unfair executive actions to transfer hundreds of billions of dollars worth of burdensome student loans onto the backs of American taxpayers.”