If President Joe Biden had any remaining shame, it vanished Friday night. Not only did the president say the Supreme Court misinterpreted the Constitution when it struck down his student loan handout, but he claimed that he never gave any “false hope” when it comes to “forgiving” student debt.
Biden spoke at the White House hours after the court struck down his student loan scheme in Biden v. Nebraska. He announced he will try a new path for student loan forgiveness, using the Higher Education Act of 1965. His most shocking comments came in response to a brave reporter who asked whether he had given borrowers “false hope.”
“I didn’t give any false hope,” the president said. “But the Republicans snatched away the hope they were given, and it’s real—real hope … . I think the court misinterpreted the Constitution.”
Earlier in his remarks, Biden attacked the six Republican attorneys general for suing to block his student loan scheme.
“These Republican officials just couldn’t bear the thought of providing relief for working-class, middle-class Americans,” he said. He condemned as “hypocrisy” Republican votes in favor of the Paycheck Protection Program during the COVID-19 pandemic and votes against his student loan scheme.
Yet Biden, a longtime politician, must have known from the beginning that it was an extreme stretch to argue that the 2003 Higher Education Relief Opportunities for Students Act justified canceling about $430 billion in debt for borrowers across the U.S. He must have known that this scheme would almost certainly never hold up, so it was indeed the falsest of hopes.
The power of the Oval Office does not give Biden the ability to rewrite by executive fiat the laws Congress passed, and the Supreme Court has the power to set the record straight when a president abuses his constitutional authority. Yet Biden must also have known that it would take some time for the policy to fall apart.
He appears to have announced the policy in August 2022, months before the midterm elections, in a desperate ploy to minimize electoral losses—and that gambit appears to have worked, to some degree. It wasn’t enough for Democrats to keep the House of Representatives, but it may have helped keep the Republicans’ new majority razor-thin.
Rather than acknowledging that his student loan scheme was rickety from the beginning, Biden cast the blame on the Republicans who sued in order to force the president to obey the law. In doing so, the president mimicked the 5-year-old child who blames the teacher for punishing him when he hits another student. The Republican attorneys general went to court to uphold the law against a lawless executive—they didn’t harbor any animosity for the people who would benefit from Biden’s scheme.
Biden’s claim that the Republicans opposed “relief for working-class, middle-class Americans” also twists the issue. As my colleagues Lindsey Burke and Adam Kissel at The Heritage Foundation’s Center for Education Policy pointed out, this student loan scheme would benefit higher-earners.
The Penn Wharton model estimated that approximately 70% of the debt cancellation would benefit borrowers in the top 60% of income earners because couples close to the income cap hold a disproportionate amount of debt. The wealthiest 40% of Americans owe 60% of the outstanding debt, while the lowest 40% by income hold just 20% of the debt. While just 14% of Americans over age 25 hold graduate degrees, more than half (56%) of student-loan debt is held by households with graduate degrees.
Even if the program did help the less fortunate, it would remain fundamentally unjust. As Burke and Kissel pointed out, “Loan cancellation transfers the debt of an individual who freely agreed to repay a loan onto other individuals (through higher taxes and inflation) who did not agree to take out that loan. Many individuals made a conscious decision not to attend college in order to avoid debt. Loan cancellation foists someone else’s debt onto them.”
Others worked their way through college or duly paid off the debt that they voluntarily took on, after graduation. “The Biden debt transfer punishes the 240 million Americans who do not hold college degrees, who constitute more than half of the population ages 25 and above and are less able to bear this new burden.”
Biden compared this scheme to the Paycheck Protection Program in the Coronavirus Aid, Relief, and Economic Security Act of 2020. That program offered loans to businesses in order to keep them afloat after the federal government released lockdown guidance that sent shockwaves through the economy. While the program suffered from fraud and abuse, it arguably represented the government’s attempt to help businesses it had harmed by encouraging lockdowns. Some members of Congress benefited from the program, but only because they own companies of their own—and the loans aimed at enabling employers to keep employees during the shutdowns.
Furthermore, the program duly passed Congress and was signed by President Donald Trump.
In contrast, Biden’s attempt to revise the HEROES Act 19 years after its passage did not represent a due use of his office.
As Chief Justice John Roberts wrote in his opinion, “Six states sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.”
Perhaps presaging Biden’s accusation that the court “misinterpreted the Constitution,” Roberts concluded his opinion with an astonishing note:
It has become a disturbing feature of some recent opinions to criticize the decisions with which they disagree as going beyond the proper role of the judiciary. Today, we have concluded that an instrumentality created by Missouri, governed by Missouri, and answerable to Missouri is indeed part of Missouri; that the words ‘waive or modify’ do not mean ‘completely rewrite’; and that our precedent—old and new—requires that Congress speak clearly before a Department Secretary can unilaterally alter large sections of the American economy. We have employed the traditional tools of judicial decisionmaking in doing so.
Reasonable minds may disagree with our analysis—in fact, at least three do. We do not mistake this plainly heartfelt disagreement for disparagement. It is important that the public not be misled either. Any such misperception would be harmful to this institution and our country.
Biden’s student-loan scheme rightly failed here, but he has pledged to keep trying. The Department of Education under his watch hatched another scheme that will cost hundreds of billions of dollars by cutting payments amounts in half, cutting in half the time to loan cancellation, and raising the amount of exempted income.
Biden will continue to push these wealth-transfer schemes without addressing the root issues—burgeoning college costs and federal incentives for a higher education that seems increasingly less valuable for the workforce.
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