On Thursday’s broadcast of MSNBC’s “Morning Joe,” Steve Rattner, who served as counselor to the Treasury Secretary in the Obama administration, stated that President Joe Biden’s student loan cancellation program is an inflationary program that will more than wipe out the deficit reduction in the Inflation Reduction Act and will encourage further tuition hikes.
Rattner said, “There aren’t yet estimates — real good estimates of what the cost will be, but let’s call it something in the $500 billion range. That is pure increase in the deficit and cost of the federal government, and that’s roughly twice the size of the amount of deficit reduction that was in the Manchin/Schumer bill that was just passed. In terms of the size of the spending in the Manchin/Schumer bill, this is larger. … In terms of the economy, yes, it is going to nudge us to the inflationary side. … I would say that that is not — that would not, to me, be a dealbreaker. It’s not ideal. We don’t want to be increasing inflation or inflationary pressures at this point in time. We don’t want to be increasing the size of the deficit and the size of our debt at this particular point in time. The whole point — or one of the points of Manchin/Schumer was to reduce the amount of debt through deficit reduction, not to increase it. And this goes in the wrong direction on that.”
He later added, “I think it is an important point to recognize that this program, or programs like this, do encourage, in effect, more raising of tuition, because you’re subsidizing the students. But other than the government coming in and somehow controlling college tuition, which I’m not sure any of us — at least I would not particularly be in favor of, this is what happens.”
Follow Ian Hanchett on Twitter @IanHanchett
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