Senator Elizabeth Warren made it clear on Sunday that she’d be happy to see President Joe Biden flex some authoritarian muscle in the months leading up to the 2022 midterm elections.
Warren, who has long been an advocate for canceling student loans, argued on CBS News’ “Face the Nation” that Biden should step up and cancel the debt on his own rather than waiting for Congress to act.
“I know you believe the president can just erase it essentially through executive orders,” host Margaret Brennan began. “But both the White House and Speaker Pelosi have said he may not have the authority, that Congress would have to act here. Have you persuaded the White House otherwise?”
“Look, we know that the president has the authority to cancel student loan debt. And the best way we know that is because Obama did it, President Trump did it, and President Biden has now done it repeatedly,” Warren claimed.
“Extending the deadlines, you mean there?” Brennan pressed.
“No, no. They have canceled. Remember, they have canceled debt,” Warren repeated. “They both canceled it for people in certain categories entirely, but they have also canceled the interest that is due on people’s student loans. They haven’t deferred it; they have canceled it. Because the power of cancellation is already in the statute. President Obama, President Trump, President Biden have all done it. Understand on cancellation, this is something the American people want, and it’s something that tens of millions of people need.”
Brennan pushed back, noting that one of voters’ key concerns going into the midterm elections was the overwhelming impact of inflation — and she asked Warren whether canceling such a vast amount of federal debt would make inflation worse.
“No, it is not inflationary,” Warren objected. “Not paying student loans has been baked in for three years now. But keep in mind, as President Biden himself says, the way we deal with inflation is not by making people poorer. The way we deal with inflation is we attack high prices head-on. Price gouging — we straighten out the supply chains so goods can come into people. We attack it head-on, not by trying to make people poorer. Canceling student loan debt is something that would be good for people all across this country, and, more importantly, good for our economy overall.”
“Not everything has to go through Congress,” Warren said, again calling for Biden to act alone.
Democrat Senator Elizabeth Warren advocates for Biden to cancel student loan debt by executive fiat: "not everything has to go through Congress" pic.twitter.com/kjOAiFPIXw
— RNC Research (@RNCResearch) April 24, 2022
Despite Warren’s claims to the contrary, a report from the Commits for a Responsible Federal Budget says that canceling student debt — some $1.6 trillion — would almost certainly impact inflation, and not in a positive way.
“The inflation effect of cancelling $1.6 trillion in student debt would be small relative to the enormous amount involved, since repayments are spread out over time and the benefits of debt cancellation accrue mainly to higher earners, who tend to save more of their money.3 However, the increase is significant relative to the underlying inflation rate. It would represent a 4 to 20 percent increase relative to the Fed’s latest inflation forecast and a 5 to 25 percent increase above its target,” the report concluded.
The report also warned that even continuing the payment moratorium for another year could have the same effect — largely because the “increase in cash flow to individuals” remains the same while the number of products available remains depressed due continued snags in the supply chain and a slow recovery from pandemic-related shutdowns.