Biden takes heat for fiscal mismanagement as he brags on the economy
Haisten Willis
President Joe Biden‘s State of the Union speech will include a healthy dose of bragging over the state of the economy, something the White House has teased and promoted in the lead-up to the event.
But when it comes to the federal government’s financial management, a realm over which Biden enjoys vastly more influence, he’s taking the heat from nonpartisan actors.
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STATE OF THE UNION 2023: BIDEN GAMBLES ECONOMIC HAPPY TALK WILL SELL WITH UNHAPPY VOTERS
The Committee for a Responsible Federal Budget issued a pair of statements on Monday blasting Biden’s plans on student loans, Social Security, and Medicare, which collectively account for a massive amount of the government’s budget.
The CRFB accused the White House of “demagoguing” Social Security and Medicare in order to attack Republicans, and it said Biden’s overhaul of federal student loan repayments would cost far more than the $138 billion estimated by the administration.
White House spokesman Andrew Bates said on Monday that a commission to prevent the entitlement programs’ insolvency would be a “death panel for Medicare and Social Security.”
That didn’t sit well with CRFB President Maya MacGuineas.
“Washington has only a decade to save Social Security before the law calls for a 20% across-the-board benefit cut. They have even less time for Medicare,” she said. “This kind of heated rhetoric is dishonest, counterproductive, and totally unacceptable.”
Biden has been on the warpath attacking the GOP over the popular entitlement programs, which are often called the untouchable third rail of American politics, since the midterm campaign.
“They’re coming after Social Security,” Biden said in October. “Now it sounds like, you know, ‘There’s Biden. That’s a typical Democrat saying Republicans are after Social Security.’ This is the one thing they have said out loud. They’ve written it down on pieces of paper.”
Those attacks have continued in the new year, even as House Speaker Kevin McCarthy (R-CA) promised that cutting those programs was “off the table.”
But Republicans say they are trying to rein in spending, which is leading to tension with the White House.
“I want to find a reasonable and a responsible way that we can lift the debt ceiling, but take control of this runaway spending,” the speaker said on CBS over the weekend. “If you look at the last four years, the Democrats have increased spending by 30%, $400 billion. We’re at 120% of GDP. We haven’t been in this place to debt since World War II, so we can’t continue down this path.”
The parties will need to work together to save both Social Security and Medicare from insolvency, a fact the CRFB hammered on.
“President Biden should know better — his vote in favor of the 1983 Social Security amendments, proposed by the Greenspan Commission, helped extend the life of that program for 50 years,” said MacGuineas. “The White House needs to stop demagoguing this issue and start taking looming insolvency seriously. Sixty-five million seniors and people with disabilities count on Social Security and Medicare.”
The CRFB similarly attacked the Biden administration over its plans to overhaul how student loans are repaid going forward.
Biden’s Department of Education is unveiling a program that could cap student loan payments at 5% of an undergraduate borrower’s income, 0% for some, and, in many cases, forgive the loans completely after no more than 20 years. While that would be good news for some borrowers, it would be extremely costly for taxpayers.
One estimate notes the overhaul expense cost taxpayers more than $1 trillion over 10 years.
“Whether the cost is $140 billion as the administration claims or $1 trillion larger as [Travis] Hornsby does, the administration should not be unilaterally spending scarce taxpayer dollars without offsets,” reads a CRFB analysis. “Their new Income-Driven Repayment plan in particular is likely to increase borrowing, inflate tuition, encourage the creation of more low-quality programs, and distribute arbitrary windfall gains to doctors, lawyers, and other Americans with high earnings potential.”
Other critics, such as the Brookings Institution’s Adam Looney, have come to similar conclusions. The overhaul is now going through a public comments process, and the conservative Heritage Foundation is actively working to solicit feedback from the public.
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Despite the feedback, the Biden administration is continuing to push for a dramatic overhaul of federal student loans, which it argues will offer students “a little more breathing room” after college.
“The Biden-Harris administration is proposing historic changes that would make student loan repayment more affordable and manageable than ever before,” Education Secretary Miguel Cardona said in a statement. “These proposed regulations will cut monthly payments for undergraduate borrowers in half and create faster pathways to forgiveness so borrowers can better manage repayment, avoid delinquency and default, and focus on building brighter futures for themselves and their families.”