Sanders unveils bill to cancel student debt


Tue, Jun 25, 2019 - Page 6

Days before the first US Democratic presidential debates, US Senator Bernie Sanders and progressives in the US House of Representatives are unveiling legislation cancelling all student debt, going further than a signature proposal by US Senator Elizabeth Warren as the two jockey for support from the party’s liberal base.

By canceling all student loans, Sanders said the proposal would address an economic burden for 45 million Americans. The key difference is that Warren’s plan considers the income of the borrowers, canceling US$50,000 in debt for those earning less than US$100,000 per year and affecting an estimated 42 million people in the US.

Questions face both candidates about how to pay for all of that plus their proposals for free tuition at public colleges and universities. However, the battling ideas highlight the rivalry between senators who have made fighting economic inequality the cornerstones of their presidential campaigns.

“In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the `crime’ of getting a college education,” Sanders said in remarks prepared for delivery at a news conference yesterday with the proposal’s House sponsors, US representatives Ilhan Omar and Pramila Jayapal.

His bill and Warren’s plan — proposed in a Medium article earlier this year — are part of their broader appeal to liberal voters with a series of progressive policy ideas on issues such as healthcare, technology and education. The dynamic seems certain to play out this week during the first Democratic debates. Twenty candidates are set for the showdown, with Warren part of the lineup today and Sanders appearing a day later. The events come as there are signs that Warren is cutting into Sanders’ support from the left.

Sanders’ effort at one-upsmanship on student loans, named the College For All Act, would cancel US$1.6 trillion of debt and save the average borrower about US$3,000 a year, according to materials obtained by The Associated Press.

The result would be a stimulus that allows millennials, in particular, to invest in homes and cars that they would not otherwise be able to afford. It would cost US$2.2 billion and be paid for — and then some — by a series of taxes on such things as stock trades, bonds and derivatives, according to the proposal.

The universal debt relief is designed partly around the idea that it would mostly benefit Americans who cannot afford college tuition without loans, a senior Democratic aide said on condition of anonymity because the legislation was not yet public.

Warren’s plan, which she has suggested in published reports would be introduced as legislation, would be paid for by imposing a 2 percent fee on fortunes greater than US$50 million, a wealth tax designed to target the nation’s top 0.1 percent of households.

Warren projects the levy would raise US$2.75 trillion over 10 years, enough to pay for a universal childcare plan, free tuition at public colleges and universities, and student loan debt forgiveness for an estimated 42 million Americans — with revenue left over.

Critics say top earners would find ways around such penalties.

However, if the free college and student debt relief advocates do not hit their revenue goals, they could simply add to the deficit — as US President Donald Trump and congressional Republicans have by passing more than US$1 trillion in tax cuts without paying for them.