Biden Has to Move Soon on Student Loans; What’s Next for Liz Cheney?
Author: Greg Valliere
August 15, 2022
THE CURRENT MORATORIUM ON LOAN PAYMENTS — extended every few months during the pandemic — expires on Aug. 31. At the least, Biden is likely to extend the moratorium until the end of the year. But could he do more? Biden has indicated that he’s considering a more sweeping forgiveness, and he’s under intense pressure from Democratic activists to do so.
THE MOST RADICAL OPTION is to announce — in an executive order — what Elizabeth Warren wants: up to $50,000 in loan forgiveness, but a figure that high is a non-starter for Biden. He favors continuing the moratorium and canceling loans of at least $10,000 for those who earn less than $125,000 or $150,000 per year. Democrats are pressuring him to to raise the $10,000 loan cap.
HUGE POLITICAL STAKES: Biden’s political advisers believe a generous loan relief program would make young people more likely to vote in November. But Republicans already have introduced legislation to block loan forgiveness; they think it would be fiscally irresponsible and would penalize millions of Americans who paid off all their student loan debt.
ABOUT 40 MILLION AMERICANS hold student loan debt and about 25% is in delinquency or default; over 3 million people have debt of more than $100,000. The total in loans outstanding is about $1.7 trillion. A loan cancellation of $10,000 per borrower would forgive a total of $321 billion of federal student loans.
BOTTOM LINE: We think Biden will continue the moratorium and forgive at least $10,000 in loans. The annual budget deficit, which has plunged to below $1 trillion from over $3 trillion two years ago, isn’t a big factor in the Administration’s thinking.
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WHAT’S NEXT FOR LIZ CHENEY? We don’t think she will lose by 29 points, as a new Wyoming poll of Republicans showed over the weekend, but chances are slim that she can win her primary fight tomorrow. Strong support from Democrats, who can cross over and vote in the GOP primary, could give Cheney an outside chance of a close outcome.
THE CONSERVATIVE CHENEY, a fierce critic of Donald Trump, has a huge campaign war chest and isn’t finished with politics. We think she’ll explore running for the GOP presidential nomination — and in a field of a dozen GOP candidates, she could finish first or second in the nation’s first primary, in New Hampshire (she’s unlikely to spend time and money on the Iowa caucuses).
PERHAPS MORE INTRIGUINGLY, Cheney may explore a third party candidacy. If the 2024 election is between Joe Biden and Donald Trump, a third option — or a fourth — could win decent support. Moderate Maryland Gov. Larry Hogan could be in the mix, along with Cheney.
BUT THIRD PARTY CANDIDACIES have been spectacularly unsuccessful; the last third party candidate to win even one state was George Wallace in 1968. Cheney could be a spoiler, but her chances of winning the presidency are exceedingly slim.
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KEEPING WITH OUR TRADITION, we will not publish every day in the second half of August, as this steamy city clears out for a late summer break — and as we get caught up on sleep.
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