WASHINGTON — President Biden and majority leader New York Senator Chuck Schumer boarded Air Force One after visiting 10 families who were shot in a supermarket in Buffalo on May 17. The shooting was emotional, but Mr. Schumer had other things on his mind.
Sitting alone with the president in a private cabin, top Democrats in the Senate spent most of the 58-minute flight back to Washington helping Mr. Biden wipe out hundreds of billions of dollars in student debt owed to the federal government. urged you to do so. Schumer argued that was what the president had promised as his candidate and that it would help millions of low- and middle-income Americans.
Biden will be difficult to sell.
The president agonized over the decision for months. A month into his inauguration, at a CNN town hall, Schumer flatly refused to allow his $50,000 student loan as he had hoped. “I don’t make it happen,” he said. He even seemed quite unconvinced that debt forgiveness was a good idea, suggesting that it could benefit “people who went to Harvard, Yale, Pennsylvania.” did.
During the May flight, Mr. Schumer persisted, according to a description of the discussion provided by Mr. Schumer this week.
Over lunch, he appealed to the president’s emotions, describing a young woman who approached him with tears in her eyes and said the pressure of paying her loan had made life difficult. , “The majority are poor and people of color,” trying to allay the president’s concerns that writing off some of the debt would be a boon to rich white students.
On Wednesday, Mr. Biden agreed, announcing that he would wipe out tens of millions of Americans’ massive student loans. With less than three months to go until the midterm elections that will determine who will control Congress, Mr. Biden bowed after months of lobbying about the policy and political implications of the president’s enormous exercise of power. , overcoming deep concerns for himself and his entourage.
The aide said the key to persuading the president is to ensure that debt relief directs more money to low-income and minority students.
He signed a plan that goes even further than some of his entourage expected — $10,000 in debt forgiveness for students earning less than $125,000 a year and a Pell grant for low-income students. I canceled a $20,000 debt to a student with money. His plan also cuts payments for all federal student borrowers for the next few years.
When Mr Biden announced the decision, he cited outrage from Republicans and some Democrats, saying “some people think it’s overkill”. “Some people think it is too little. But I believe my plan is responsible and fair. We will fix the broken system.”
President Biden
With the midterm elections looming, this is where President Biden stands.
The long-delayed move has been heavily criticized by Republicans, who say many, including families with incomes as high as $250,000 a year, will pay an undeserved price. increase. Also, Lawrence H. Summers, who served as Treasury secretary under President Bill Clinton, warned that it “contributes to inflation,” while Obama’s economic adviser Jason Furman called it “reckless.” The idea of adding $5 trillion of gasoline to the already burning inflationary fire.
Some outside economists, including analysts at the White House and Goldman Sachs, said the debt relief would coincide with the resumption of loan payments for all borrowers after a nearly three-year pause due to the pandemic, so inflation would likely rise. said to have little effect on
Biden’s deliberations on the student loan issue have highlighted his reluctance to fully embrace his Democratic rival’s progressive agenda during the 2020 presidential primary. However, they also revealed his willingness to change his mind and his desire to be seen as an advocate for the middle class.
After the announcement on Wednesday, Mr. Biden was asked by a reporter if it was fair for someone who had already paid off his student loans.
“Is it fair for people who don’t actually own multi-billion dollar businesses to see one of these guys take all the tax breaks?” “Is that fair?”
naysayer
Janet L. Yellen, U.S. Treasury secretary and former chairman of the U.S. Federal Reserve, was one of Biden’s most skeptical insiders.
According to multiple officials, she, like others, could see the economic impact of a huge giveaway severe, especially as the Federal Reserve struggles to keep inflation under control. Her message was echoed by top Democratic economists who expressed their concerns to the White House about the potential repercussions.
Around the spring of 2021, Mr. Biden began hearing concerns from some economic advisers. As Biden weighed his options, plans that some saw as urgent were postponed time and time again.
On Dec. 15, the White House hosted a conference call with supporters of student loan forgiveness, delivering a message activists didn’t want to hear. The president had not yet decided to cancel student loans. Indeed, as the economy was recovering, borrowers had to prepare for the end of moratoriums on payments that had been regularly extended since the pandemic began.
At a senior staff meeting this spring, as Mr. Biden continued his deliberations, advisers expressed different views. White House Chief of Staff Ron Klein argued that canceling student loans could spur support among younger voters.
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Others, like Mike Donilon, one of the president’s closest political advisers, showed Biden’s poll data to show American support for the cancellation was divided. Whatever the impact on those in debt, the move could alienate older Americans who are saving money to pay for school for themselves and their children, he told the president. The plan may seem unfair.
Those who expressed concern were adding to the president’s own uncertainty, according to people familiar with the president’s thinking.
The first lady was also uncomfortable, people close to her said. University professor Jill Biden was vocal about her husband’s call for free community college. However, she did not publicly support the forgiveness of student debt.
The debate continued slowly throughout the summer. Biden’s senior aides gathered at a meeting to discuss the issue and were told by the president to return again.
“You can’t just go out there and tell him something,” said Cedric Richmond, a former senior adviser to Biden. “Analysis, I need some evidence.”
advocate
In the West Wing, Vice President Kamala Harris was one of the most persistent champions of canceling student debt.
During the week of Valentine’s Day, Mr. Harris had his staff draft a memo listing the president’s concerns and put together a topic meant to address them one by one. Concerning his concerns about benefiting “schools,” they recommended in the memo to counter that “only 0.3% of federal borrowers attended Ivy League schools.” In response to his concerns that the loan should be forgiven by an act of Congress, the memo urged her to say that similar executive powers have already been used to enact a moratorium on loan payments. did.
When the president met with members of Hispanic lawmakers in Congress in April, they were desperate for the president to write off more than $10,000 of debt, but it was clear he hadn’t made up his mind yet. was.
Should debt relief apply to both public and private college borrowers? For some attendees, it indicated Mr. Biden was agonizing over how much debt he should allow and who should benefit.
Lobbying continued throughout the summer.
At the White House in May, Mr. Schumer, along with Sen. Elizabeth Warren of Massachusetts and Raphael Warnock of Georgia, presented data showing debt forgiveness benefits borrowers who failed to complete their degrees. Presented to Mr. Biden. A person familiar with the meeting.
Three senators were among the most enthusiastic supporters of student debt forgiveness. Warren made it a central board during his presidential candidacy. Both Warnock and Schumer backed larger sums than the $10,000 bailout Biden promised during his campaign. (Warren also used Air Force His Wan as a lobbying platform and bent Biden’s ear during the president’s flight to a wind farm in Massachusetts.)
The data the three handed Biden at a meeting in May was meant to tackle what they knew was one of Biden’s problems.
When it became clear that Biden didn’t want to cancel all borrowers’ $10,000+ debt, lawmakers reversed course and instead opted for a program aimed at low-income students. I urged the president to increase relief for those with Pell grants. .
Outside groups also continued to bait the president. Ten days after the president left Buffalo with Schumer, NAACP President Derrick Johnson sent Biden a candid message in a tweet.
“Cancelling $10,000 in student loan debt is like pouring a bucket of ice water into a wildfire.” he wrote.
In recent weeks, supporters stepped up efforts as it became clear that Mr. Biden was nearing a decision. Senators Schumer, Warren and Warnock met Friday with Klein and Brian Deeds, the president’s chief economic adviser. Schumer called the president on Tuesday. Mr Johnson called senior White House officials Monday and Wednesday morning, hours before the announcement.
decision
After Mr. Biden made his decision, the move was very quick and very deeply debated.
The announcement came before the Department of Education fully designed how the program would work, and before White House economists estimated its full cost. As Biden has insisted in all his proposals, the lack of revenue estimates forced government officials to the torture of explaining how the plan would be “fully paid.”
Officials at the loan services company began hearing whispers Wednesday morning from friends at the Department of Education that a decision was imminent. On Wednesday afternoon, within minutes of the president’s remarks, his website at studentaid.gov began crashing. A lot of loan service companies can have his 1 hour on hold time.
One servicer representative said, “Everyone is calling us, but there is no answer.
Late Thursday night, White House press secretary Carine Jean-Pierre said parts of the program would cost $24 billion a year if 75% of eligible people requested cancellation. Bharat Ramamurti, deputy director of the Economic Council, said a more accurate estimate would not be available for at least several weeks.
Stacey Cowley Contributed a report from New York.