The White House has shared how it believes student loan forgiveness will be paid for.
Bharat Ramamurti, deputy director of the National Economic Council, told Fox News that it is “paid for and far more by the amount of deficit reduction that we’re already on track for this year.”
He explained, “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.”
Fox News previously reported that the White House had refused to explain how the program would be paid for.
Ramamurti’s comments come just less than a week after White House Press Secretary Karine Jean-Pierre went back and forth with Fox News’ Peter Doocy over how the program would be paid for, as IJR reported.
Users on Twitter shared their criticism of Jean-Pierre over her refusal to answer the question.
https://twitter.com/thejcoop/status/1562855520662216704
For a second day in a row, White House Press Secretary Karine Jean Pierre can't explain how Biden will pay for his student loan reallocation
— Katie Pavlich (@KatiePavlich) August 25, 2022
This is so embarrassing. https://t.co/bMm1lRGyAB
— Spencer Brown (@itsSpencerBrown) August 24, 2022
This is just abysmal. Why even put her out if she can’t defend a policy announcement? https://t.co/iWEZVGoKYE
— Matt Whitlock (@mattdizwhitlock) August 24, 2022
Who will pay for this student loan bailout? She does not know the answer. I do. Taxpayers will pay. You and I will pay. And they will print more money and fuel inflation. It was a bad plan in these inflationary times with no plan to address why college is so expensive. #Socialism https://t.co/Z8Uq3R6smL
— Kathy Szeliga (@KathyforMD) August 25, 2022
President Joe Biden announced the administration’s student loan forgiveness plan last week, as IJR reported.
An analysis from the University of Pennsylvania’s Wharton School found that the plan will cost taxpayers $300 billion.
“This cost increases to $330 billion if the program is continued over the standard 10-year budget window. Eliminating the borrower income limit threshold produces a 10-year cost of $344 billion,” the analysis explains.
The Committee for a Responsible Federal Budget published an article claiming that cancelling student loan debt would undermine the Inflation Reduction Act.
The committee argued that the cancellation could “undermine the bill’s disinflationary gains and deficit reduction.”
However, CNBC noted that economists at the Roosevelt Institute disagree with the article, saying that “any inflationary effect would be ‘small.'”
Additionally, the Center for American Progress claims the impact on inflation will be “minor,” as the outlet reported.