Vulnerable Rep. Cindy Axne, the lone Democrat in Congress from Iowa, claimed that President Joe Biden’s student loan forgiveness scheme “will bring down inflation,” despite what prominent Democrat economists and analysts have shown.
Axne, on KMA Land’s Morning Line program Friday morning, disputed the notion that Biden’s student loan forgiveness scheme will increase inflation. The congresswoman pointed to a Goldman Sachs analysis from the day before that showed the scheme would have a “small” impact on inflation.
“Goldman Sachs put out an analysis that said the net impact of the debt forgiveness and resuming student loan payments is likely to be very modest, but it will be slightly disinflationary, so it will bring down inflation,” Axne claimed, even emphasizing that the plan is “something that will not impact inflation negatively.”
“People come to my office all the time. I hear from realtors that student loan debt is strapping people from buying new homes,” Axne continued.
“When folks buy a property, not only does that help the economy… that creates jobs in America for appliances and things… if they build a family, all this stuff. It helps build our economy,” she explained her reasoning behind it. “So, I’m glad to see this is something that will not impact inflation negatively.”
Last week, Biden announced his decision to forgive $10,000 of federal student loan debt for certain borrowers that make less than $125,000 per year and up to $20,000 for Pell Grant recipients. The president described it as a “campaign promise” to give “working and middle-class families breathing room” on student loans.
The Goldman Sachs analysis that the Hawkeye State Democrat referenced was released last Thursday, claiming that the impact of Biden’s plan on inflation would be “small” and boost the gross domestic product (GDP) by about 0.1% next year.
On Friday, the University of Pennsylvania’s Penn Wharton Budget Model analysis also noted that the “debt cancellation alone will cost up to $519 billion,” but “depending on future IDR program details to be released and potential behavioral (i.e., “non-static”) changes, total plan costs could exceed $1 trillion.”
Additionally, several prominent Democrat economists also warned that Biden’s plan would not help inflation.
In a series of posts on social media last week, Larry Summers — treasury secretary under Bill Clinton and director of the National Economic Council under Barack Obama — said, “Student loan debt relief is spending that raises demand and increases inflation. … It will also tend to be inflationary by raising tuitions.”
Jason Furman — a former economic adviser to Obama and Bill Clinton during their presidencies — also said in a series of social media posts, “Pouring roughly half-a-trillion dollars of gasoline on the inflationary fire that is already burning is reckless.”
“Most importantly, everyone else will pay for this either in the form of higher inflation or in higher taxes or lower benefits in the future,” Furman added.
Axne’s Trump-backed Republican challenger, state Sen. Zach Nunn, told Axios Des Moines last week that he disagrees with Biden’s student loan forgiveness scheme because it is unfair to Americans who have already paid off their debts and others who did not attend college.
Nunn said that colleges need to address their rising tuition costs and that he is concerned loan forgiveness would weaken incentives for people to enter under-filled careers like teaching, nursing, and the military.
National Republican Congressional Committee spokesman Mike Berg told Breitbart News, “Cindy Axne is either lying or too out-of-touch to represent Iowa in Congress. Joe Biden’s student loan handout is going to supercharge inflation.”
Republicans are aiming to unseat Axne with Nunn. Republicans in the House are looking for a net gain of at least five seats, which would win them back the majority and oust Pelosi from her Speakership.
Along with generic ballot polls showing the Republicans have a good chance at taking back the majority, Breitbart News has chronicled numerous polls that show the battlefield has expanded to more districts than in years prior and, in some cases, even to typically safe seats that Biden carried in the last presidential election by between 11 and 15 points.
One of those polls from RMG Research showed Axne losing to Nunn by eight points. Of the four hundred likely midterm voters in the district from July 29 to August 5, 49 percent said they would vote for Nunn, while only 41 percent said they would vote for Axne — which was outside the poll’s 4.9 percent margin of error. Two percent also said “some other candidate,” and eight percent said, “not sure.”
In 2018, the Democrats took the House from the Republicans. In 2020, after striving to reclaim it, the Republicans left the Democrats with the slimmest majority in modern history and gave themselves the upper hand in the midterms.
For Republicans, winning the majority will require a net gain of only five seats in November, and much is on the line in both the House and the Senate. Republicans winning either one could mean the Democrats and Biden will have more difficulty passing their agenda items before the next presidential election.
According to analysts from multiple organizations and news outlets, Republicans are currently projected to win back the majority in the House with anywhere between two and 35 seats, while only needing to net five seats.
Jacob Bliss is a reporter for Breitbart News. Write to him at jbliss@breitbart.com or follow him on Twitter @JacobMBliss.
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