‘A Great Error’: How Biden Used a Budgetary Gimmick To Score a Pre-Election Political Win
‘They did it this way so next year they can say the deficit is lower,’ economist says of student cancellation plan
Getty Images Joseph Simonson • October 6, 2022 11:48 am
President Joe Biden’s quiet admission that the full cost of his student debt cancellation scheme will be included in the 2022 fiscal year budget—and that it will be and financed entirely by debt—is a reckless budgetary gimmick and a “great error,” according to economists from across the political spectrum.
A senior Biden administration official told the Wall Street Journal on Tuesday that the loan forgiveness program—which the White House estimates will cost $379 billion, but could be more depending on the number of eligible people who apply for the relief—will be added to the 2022 fiscal year budget without any payment mechanism.
“My cynical answer is they did it this way so next year they can say the deficit is lower,” economist Marc Goldwein of the center-left Committee for a Responsible Federal Budget told the Washington Free Beacon. “If instead they put it in the 2023 fiscal year, it would look more obvious that they’re increasing the deficit.”
The 2022 fiscal year ended Sept. 30. No payments have been made to the program, which begins in the new fiscal year, on Oct. 17.
Moreover, the program, which forgives up to $20,000 in student debt for qualifying applicants, will take place over the course of roughly three decades, according to the Education Department—but the entire cost will be born in a single fiscal year, a budgetary maneuver likely intended to boost the Biden administration’s misleading talking point that it’s overseeing falling deficits.
Biden regularly boasts about cutting the federal budget deficit—which increases when the government spends more than it collects in tax revenue—and claims he’s more fiscally responsible than Republicans. The U.S. budget deficit was $2.8 trillion in the 2021 fiscal year and initially just over $1 trillion in the 2022 fiscal year before the added cost of student debt cancellation.
By tacking on the cost of student debt cancellation to the
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