In her latest show of desperation, Sen. Elizabeth Warren is now promising to implement her student loan forgiveness plan by executive fiat, adding legal questions to an already reckless proposal.
With less than three weeks to go before Iowa, Warren needs to make a splash in Tuesday night's debate. She's teetering on the edge of disaster in the first Democratic nomination contest, and a poor showing there would doom her presidential ambitions. After her campaign spent yesterday pushing the idea that Sen. Bernie Sanders told her in a private meeting that a woman couldn't be elected president, she's trying out a new gimmick to highlight a popular proposal from earlier in her campaign.
Last April, Warren proposed to offer debt cancellation of up to $50,000 to more than 42 million people, or 95% of those with debt. She claimed that will completely wipe out debt for 75% of borrowers with student loans. The proposal, which would be a slap in the face to those who already struggled to pay off their loans, would create an incredible moral hazard by establishing the standard for young Americans that if they rack up debt, the government will always step in to wipe it away. That will no doubt cause a new wave of borrowers to take out even more debt and incentivize colleges to increase tuition. As Reason's Peter Suderman detailed at the time, it is also a giveaway to a class of Americans (college graduates) who are relatively well-off and connected.
Flaws aside, the proposal helped Warren gain steam last spring and summer, particularly with the type of younger liberal voters she'll need to revive her campaign. Perhaps sensing there are questions among the Democratic electorate about how any of these ambitious proposals are going to pass, Warren is now trying to bring back one of her greatest hits — only claiming she can implement it without Congress.
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Inside the Magazine: December 17
"I will start to use existing laws on day one of my presidency to implement my student loan debt cancellation plan that offers relief to 42 million Americans," she explains in laying out her recycled proposal, which also promises "all available tools to address racial disparities in higher education, crack down on for-profit institutions, and eliminate predatory lending."
Warren claims the Department of Education has "broad legal authority to cancel student debt." Sure, there are circumstances where debt that hasn't been paid back is considered in default and gets written off as the government assumes it will never get repaid. But there's no precedent for anything this broad. So there's no doubt her proposal would trigger significant legal challenges.
Furthermore, there is the financing issue. Warren originally claimed that her loan forgiveness plan would cost $640 billion, to be paid for with revenues generated from her wealth tax. Yet her wealth tax would require an act of Congress to pass. In the meantime, where does the money come from to wipe away hundreds of billions of dollars in federal assets?
It's also particularly rich that at a time when Democrats are attacking Trump for bypassing Congress and expanding executive power, that she'd come out with a proposal to use executive power in an unprecedented way.
Policy and legal issues aside, it is unclear why Warren expects that this gambit will help her much. After the success of her student loan cancellation plan, Sanders one-upped her by promising to eliminate all $1.6 trillion of student loan debt. Surely he wouldn't hesitate to wave away student loan debt by executive authority if such authority could be claimed, so it's hard to see what advantage Warren hopes to gain here.
Bernie and Liz give-away show to buy votes from foolish ones who don't want to pay back their education costs.
In another vein - Desperate Liz has accused Trump of "Insider trading" by telling guests at Mar-a-Lago of "big events coming" in Iran. Says Trump profited from insider stock trading with his guests and sent a letter to the SEC demanding an investigation.
Bernie and Liz are now squabbling about whether Bernie told Liz a "woman can never win the White house" - and all the poor fascist DPST's are wringing their poor little hands over the "Du'vusty crisis"!!!
Not to mention the Extreme hypocrisy of Liz complaining about Trump's use of executive privilege - and plans radical debt increasing use herself.
Typical fascist DPST Hypocrisy!!!
Desperation in the fascist DPST fern bars!
