According to comments made by White House press secretary Karine Jean-Pierre to CNN on Thursday evening, the plan to cancel student loans proposed by Vice President Joe Biden might run roughly $24 billion annually.
She stated this during an appearance on “Don Lemon Tonight.” “Assuming that 75% of those who take this on, the President’s student debt cancellation plan,” she explained, “and you look at the average monetary, cash flow on that, it’s going to be roughly $24 billion each year.”
Jean-Pierre responded to Lemon’s question regarding whether or not the White House will release a detailed cost estimate by saying that they will share more details once they see how many Americans take advantage of the plan. Lemon’s question was in response to Jean-Pierre’s statement that the White House will release a detailed cost estimate.
The White House had a difficult time providing answers to questions about Biden’s plan for the second day in a row, claiming at the same time that the President waited for the plan to be “financially balanced” before unveiling it and that there was no way to estimate how much money the plan would cost.
Jean-Pierre continued to emphasise, during a news briefing that took place earlier on Thursday, that the plan to cancel thousands of dollars in federal student loan debt for millions of Americans will “be totally paid for because of the work that this President has done with the economy.”
Jean-Pierre began her response to the question of whether the administration had a better idea about the total price tag for the programme by saying that “the President’s record on fiscal responsibility is second to none.” She then went on to detail a list of the economic accomplishments that the President has achieved.
During the presentation, she did not, however, provide an estimate of how much money the proposal could potentially cost.
“All of this, in terms of cost, will also depend on how many of the loans cancelled were actually expected to be repaid, and it will depend on how many borrowers actually take advantage of this opportunity before we have a real sense,” she said. “All of this will depend on how many of the loans cancelled were actually expected to be repaid.”
The press secretary was questioned on the numbers throughout the entirety of the briefing. She stated that the administration did not believe that the move would result in an increase in the deficit because of “the $1.7 trillion… we’ve done the work right to lower the deficit,” which is a reference to a projection made by the administration regarding how much the federal deficit will shrink in the fiscal year 2022, and because “$50 billion per year is going to go back” to the Treasury once the repayment of student loans begins in December.
She stated that the Treasury “was getting zero for the last two years” as a result of the pause in repayments; however, on Wednesday, the Deputy Director of the National Economic Council Bharat Ramamurti stated that approximately $2 billion per month is still being repaid by borrowers during the pause, which is a reduction from the normal amount of $6 billion per month that is repaid by borrowers.
On Twitter, the White House provided a more pointed defence of its plan to cancel student loans and called out GOP critics who have had Paycheck Protection Program loans forgiven. The White House’s tweets targeted individuals who had their loans forgiven under the programme.
One of the tweets sent out by the White House in reaction to the Georgia Republican’s criticism of Biden’s plan stated that Congresswoman Marjorie Taylor Greene had 183,504 dollars worth of PPP loans cancelled.
In response to identical concerns made by the Florida legislator, another article read that Congressman Matt Gaetz had a total of $482,321 in PPP loans cancelled.
Similar answers were posted to Twitter by the White House in response to criticism from Republican Representatives Markwayne Mullin and Kevin Hern of Oklahoma, Mike Kelly of Pennsylvania, and Vern Buchanan of Florida.
Jean-Pierre responded Thursday that the “Department of Education is going to take the lead” when asked whether or not the government would eventually offer an estimate of how much it will cost.
When asked why the President waited to make his decision to cancel the debt for such a lengthy period, she stated that Vice President Biden “wanted to do it in a fiscally responsible way.” And then there was the legal review that took place… We were concerned about ensuring that the legal review was carried out.”
When asked how it could be fiscally responsible without a public cost estimate and without specifics on how the plan would be paid for or who would pay for it, Jean-Pierre insisted that the administration does “not see this as irresponsible.” However, when pressed on how it could be fiscally responsible, he did not provide a satisfactory answer.
She stated that “we do not view this as being reckless.” “We see this as a method to achieving things that is balanced and appropriate about finances.
When I think back, I can hear others asking, “Why don’t you do $50,000?” Because we want to make sure that we handle this situation in a manner that is responsible for our finances, we do not want to do that.
Again, we can’t make everyone happy, but we can ensure that our promise will be kept while remaining economically responsible and making good use of our resources.
On Wednesday, Ramamurti provided additional clarification to CNN’s Phil Mattingly regarding the challenges involved in producing a top-line number.
He stated that it would be difficult to estimate the overall cost without knowing the number of borrowers who would join up. He stated that “it has a significant influence in determining what the cost is going to be.”
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But beyond that, he stated that the presence of additional elements made it difficult to provide a definitive estimate.
He stated that the estimations of the default rate are highly variable, which would have an effect on the overall number.
He went on to say that those who would benefit from the relief would be more likely to start small enterprises or buy homes, both of which would result in an increase in tax collection.
