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**AUGUST 24, 2022**
Kuttner on TAP
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**** Biden's Debt Cancellation Program
Better than we thought, still not enough for the long term
There is an old, pre-GPS joke, in which a tourist traveling through the
Midwest stops to ask a farmer how to get to Jenkinsville. The farmer
replies, "Well, I wouldn't start from here."
So it is with student loan relief. The whole system is a mess and a
travesty. And there are no great options for incremental reform.
As was widely leaked and long anticipated, Biden opted for an approach
that would help the most hard-pressed debtors of moderate means. He
attempted to blunt criticisms that he was gratuitously adding to the
deficit or inflation, or rewarding rich debtors such as lawyers and
investment bankers.
The basic plan is $10,000 cancellation for most debtors, with an income
ceiling of $125,000 for individuals and $250,000 for families, and a
continuation of the full suspension of debt payments through the end of
the year.
The administration added one very smart detail, which was not initially
in the leaks. Recipients of Pell grants-a near-perfect proxy for
low-income debtors-get up to $20,000 of relief. All told, close to
half of all debtors will get full cancellation. According to documents
leaked to
The Washington Post
,
the White House estimates that 90 percent of relief will go to people
earning less than $75,000.
The administration previously had announced a process to take student
debtors out of default, which helps them restore access to other credit.
All in all, it's a nice start. But this still leaves plenty of
problems. The most serious is that when full suspension of debt payments
ends early next year, more than half of debtors will experience a sudden
hit to their household budgets.
Once again, Biden has played a weak hand not badly. The problems were in
the cards he was dealt.
And all of this still begs the question of more fundamental reform: How
to fix the debt-for-diploma system going forward, so that we do not
start the debt clock ticking all over again.
______________________________________________________________________
Now I have to violate the rule that a column is about one thing.
People have been wondering why Trump took all those classified
documents. What was his motive? Maybe to threaten to reveal classified
material as leverage with prosecutors, or just as retribution? Maybe to
have his own shadow foreign policy or play footsie with the Saudis or
Russians?
But the reality is evidently more banal. The tip-off came in a **Times**
piece
yesterday noting in passing, deep down in the story, that two of those
documents were Obama's private letter of advice to the newly elected
President Trump; and a letter to Trump from North Korean dictator Kim
Jong Un. No grave state secrets there.
Voilà ! The Grifter-in-Chief was coveting documents with a large market
value that could be sold off to collectors. Just when you think Trump
can't go lower, he goes lower.
~ ROBERT KUTTNER
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Union Strikes California Hospital Giant Over Violations of Mental Health
Laws
The National Union of Healthcare Workers says that Kaiser Permanente is
not giving timely patient care. They want Gov. Gavin Newsom to enforce
the law. BY DAVID DAYEN
House Leadership Delays Social Security Expansion While Crafting Tax
Breaks for Rich Retirees
Nancy Pelosi's office is blocking Social Security expansion, while
Congress prepares to pass a windfall for rich retirees, insurance
companies, and large asset managers like Vanguard and Fidelity. BY LEE
HARRIS
Layoffs May Be White-Collar Now, but Here Come the Blues
Ford signals a near-term downturn, and a long-term deeper problem. BY
HAROLD MEYERSON
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