(Chris Parker, Headline USA) Nearly a week after President Biden signed the massive $500 billion student loan bailout bill, the White House remains silent on who will cover its cost, reported Fox News.
Bharat Ramamurti, deputy director of the National Economic Council, claimed Friday that the cost would be covered by deficit reductions.
“It is paid for and far more by the amount of deficit reduction that we’re already on track for this year,” Ramamurti said.
“Like I said, we’re on track for $1.7 trillion in deficit reduction this year. That means, practically speaking, compared to the previous year, 1.7 trillion more dollars are coming into the Treasury than are going out. And we’re using a portion of that — a very small portion of it — to provide relief to middle-class families, consistent with the president’s plan.”
However, federal government policies and programs consistently cost more than predicted. Also, the Committee for a Responsible Federal Budget believes that the forgiveness, combined with the latest round of loan pauses, will “nullify nearly a decade’s worth of deficit reduction from the Inflation Reduction Act.”
The committee also believes the cost could soar as high as $600 billion. It predicts the bulk of the bill will be covered by tax hikes.
“Over time, as loans don’t get repaid, the federal government will lose money that might otherwise have been paid back,” the Wall Street Journal noted.
The deficit hit a record high during Biden’s first year in office. The Fed has announced that it will cover Biden’s deficit even as investors begin to realize that US bonds are no longer sound investments.
Experts are also questioning the legality of Biden’s loan forgiveness.
“This is illegal. The president doesn’t have the authority to do this. He’s not an emperor. He can’t just with the stroke of a pen cancel $300-$400 billion worth of student loans,” Sen. Marco Rubio, R-Fla., said.
“It’s unfair. Eighty-five percent of the people in this country do not have a student loan. They either had one and paid it or they don’t have one, and that 85% is gonna pay for the 15% who got a tangible benefit.”
The CRFB agreed.
“It is unclear that the 1965 Higher Education Act even grants the president the legal authority to take such a sweeping step, given that it was historically understood to permit only more targeted relief,” they said in a statement.
