Jason Furman slams White House proposal: ‘Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.’
Andrew Stiles • August 24, 2022 4:10 pm
President Joe Biden’s plan to cancel up to $40,000 of student loan debt for households earning $249,000 a year is “reckless” and “indefensible,” former Obama adviser Jason Furman said Wednesday.
Furman, a Harvard professor who served as deputy director of the U.S. National Economic Council, denounced the administration’s proposal in a lengthy Twitter thread. “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless,” he wrote. “Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.”
In response to a White House fact sheet citing examples of how the plan would help low- and middle-income Americans, the economics expert questioned why the administration would “design a policy that would provide up to $40,000 to a married couple making $249,000” and includes law and business school loans among those eligible for forgiveness. Furman also slammed the “incoherent, inconsistent [and] indefensible cherry picking” the White House used to argue the plan would not lead to increased inflation.
“There are a number of other highly problematic impacts including encouraging higher tuition in the future, encouraging more borrowing, creating expectations of future debt forgiveness, and more,” Furman wrote, adding that hardworking Americans “will pay for this either in the form of higher inflation or in higher taxes or lower benefits in the future.”
Many legal experts, including former Obama administration attorney Charles Rose, have argued that Biden lacks the authority to unilaterally cancel student debt. House Speaker Nancy Pelosi (D., Calif.) concurred with that assessment. “People think that the president of the United States has the power for debt forgiveness. He does not,” she told reporters in July 2021. “He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.”
Furman noted these concerns while adding that even if Biden’s plan was “technically legal” it would not be a “reasonable” use of executive authority. “I don’t like this amount of unilateral Presidential power,” he wrote.