Why Is Biden Extending a Taxpayer Bailout to Doctors and Lawyers? | Opinion

There's a saying that President Biden loves to cite: "Don't tell me what you value. Show me your budget, and I'll tell you what you value." Well, if his administration's budget is anything to go by, then the president values bailing out affluent elites like doctors and lawyers at the working-class taxpayer's expense.

At least, that's the glaring implication of the White House's reported decision to extend the federal government's so-called "pause" on student loan payments. Most of the $1.75 trillion in student loan debt held by Americans is actually owed to the federal government, which paused collection in March 2020 in what was supposed to be a "temporary" pandemic emergency measure.

Under former President Trump and then under Biden, the federal government has extended this measure time and time again. And now, the Wall Street Journal is exclusively reporting that the Biden administration will renew the "pause" yet again, extending it through August 31.

There are three main problems with this decision.

For one thing, it's completely unnecessary. Jobs held by college graduates were much less likely to be disrupted by COVID-19 lockdowns than working-class employment, and they have more than recovered from the COVID-19 pandemic.

In fact, the unemployment rate for college grads is now just 2 percent. While some temporary reprieve from student loan payments may have been necessary at the height of the emergency, the laptop class's vacation from personal responsibility ought to have ended long ago.

joe biden student loans
President Joe Biden, pictured above, plans to once again push back the restart date for student loan payments, but the latest move falls short of demands within his own party. Chip Somodevilla/Getty Images

Secondly, the benefits of this policy flow almost exclusively to the affluent.

Because interest payments are being waived during the pause, the policy is actually permanently forgiving a decent amount of student loan debt as it carries on. Yet according to the nonpartisan Committee for a Responsible Federal Budget (CRFB), doctors and lawyers have been the biggest beneficiaries. By May 1, the average doctor with student loans will have received $48,500 each in permanent forgiveness on their (undergraduate) student loans thanks to the "pause." Similarly, lawyers will have received almost $30,000 each in permanent forgiveness.

That compares to just $3,500 in benefits for your average associate's degree holder, $2,000 for those who attended but did not complete college, and, of course, $0 for the two-thirds of Americans who never attended college at all.

This led the CRFB to conclude that the policy is not "progressive," but rather highly regressive, meaning it disproportionately benefits the well-off.

So, the President is reportedly renewing a policy that not only lacks justification, but also skews its benefits overwhelmingly to the rich and affluent. And there's always a trade-off.

The third problem plaguing this decision is that it directly imposes costs on all taxpayers. Waived student debt interest and suspended payments are money owed to federal taxpayers, and when it doesn't come in, that will ultimately have to be made up elsewhere in the budget through more crushing debt, higher taxes, spending cuts elsewhere, or in another manner.

We're not talking about chump change, either. According to the Committee for a Responsible Federal Budget, the "pause" is costing taxpayers more than $4 billion every month.

So if we take President Biden at his word that his budget decisions are revealing his values, well, the results aren't pretty.

We're living through a time of economic turmoil when inflation is set to cost the average American household $5,200 over the next year just to maintain their same lifestyle. Yet apparently, the Biden administration's priority is perpetuating a bailout for affluent doctors and lawyers at the expense of working-class taxpayers.

Brad Polumbo (@Brad_Polumbo) is the co-founder of BASEDPolitics and Policy Correspondent at the Foundation for Economic Education.

The views in this article are the writer's own.