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How the White House will pay for President Biden’s decision to cancel $10,000 to $20,000 in student loans for some Americans, or cost more than $500 billion by some estimates It remains silent on whether future tax increases will be required to cover the proposal.
Despite announcing the policy earlier this week, administration officials have yet to reveal how the proposal will pay out in the long run. As the current plan calls for the government to forgive the debt, taxpayers will likely bear most of the principal, adding interest to the existing US debt of about $31 trillion. There is a possibility.
Fox News Digital has reached out to the White House multiple times to ask how the Biden administration plans to pay for student loans, or if it is looking at future tax increases to pay for it. A spokesperson on Sunday responded, pointing to comments from National Economic Council Deputy Director General Bharat Ramamurti, on Friday claiming the plan was “fully funded” by the deficit reduction.
“This year’s deficit reduction is much bigger because it’s already on track,” Ramamurti said. So practically speaking, we’re getting $1.7 trillion more into the Treasury than we’re going out, compared to last year, and we’re going in line with the President’s plan to bail out middle-class families. I offer a portion of it — a small portion of it — to provide the
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Administration officials have not said how the added spending will be offset, but have recently claimed that the country’s deficit has already plummeted under Biden’s oversight.
Administration officials also argue they can’t fully explain the cost of Biden’s student loan distribution. they say.
“As for costs, it also depends on how many of the canceled loans were actually expected to be repaid,” Jean-Pierre said.
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But the National Taxpayers Union Foundation disagrees.Earlier this week, the group released an analysis showing that if student loan distribution adds about $330 billion to the deficit over the next 10 years, as a budget model Wharton School of the University of Pennsylvania corporate claims, the average cost per taxpayer is $2,085. But it could be on the low end.Responsible Budget Committee Enter the cost of handouts Between $440 billion and $600 billion.
In particular, fiscally conservative think tanks say the federal government needs to come up with ways to make up for forgiven loans in the future, whether through spending cuts or tax increases. The group predicts much of it will be through the latter.
Breaking it down, the data showed that the high-income total was significantly higher, but still stepped into the middle class.
For example, according to the group, taxpayers between $1 and $50,000 a year would pay $158 or more. It is estimated that those earning $50,000 to $75,000 will face costs of $866, individuals earning $75,000 to $100,000 will face costs of $1,477, and those earning $100,000 to $200,000 will face costs of over $3,150. If $200,000 he reduced to $500,000, he would pay close to $9,950.
“Some may argue that taxpayers are paying for student debt cancellation, but the $329 billion cost of canceling student debt was previously borrowed from the federal government. $329 billion, which will not be returned to the Treasury Department,” said the organization’s analysis. “Policy makers will have to close that gap in the future by cutting government spending, raising taxes, increasing borrowing, or a combination thereof.”
Biden announced plans for forgiveness on Wednesday $10,000 student loan For borrowers with an annual income of less than $125,000. A Pell Grant recipient will receive a $20,000 debt distribution if her income is below her $125,000 threshold. Government officials have argued that individuals and households in the top 5% of income earners will not benefit from the decision.
of White House It’s also extending the moratorium on student loan payments through the end of the year. Coinciding with the announcement is a new Department of Education proposal that would allow a borrower to cap undergraduate loan repayments at his 5% of monthly income, adding to the cost to taxpayers of handouts.
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Penn Wharton’s budget model estimates that the total cost of the proposal could exceed $1 trillion, given the loan moratorium and new repayment caps.
Fox News’ Jessica Chasmar contributed to this report.