Happy Tuesday! Restauranteurs everywhere but in New Jersey can now freely call it Taco Tuesday after restaurant chain Taco John’s reportedly gave up defending its trademark of that phrase in a fight with Taco Bell. “It’s just not worth the amount of money it would take to defend it,” Taco John’s CEO Jim Creel told The Wall Street Journal. In New Jersey, the trademark is owned by a different restaurant that is still trying to keep its legal ownership.
Now on to meatier matters.
Biden’s New Student Loan Plan Could Cost $475 Billion Over 10 Years: Analysis
The Biden administration’s new income-driven repayment plan for those with student loan debt will cost an estimated $475 billion over 10 years, according to a new analysis by the Penn Wharton Budget Model.
Unveiled after the Supreme Court nullified the administration’s previous plan to forgive more than $400 billion in student loan debt, the proposed Saving on a Valuable Education (SAVE) plan will significantly reduce monthly payments for millions of borrowers once it goes into effect in July 2024. The Department of Education estimates that under the plan, which reduces required payment amounts and offers more generous terms for loan forgiveness, individual borrowers will save more than $1,000 a year, while a family of four will save about $2,200.
Penn Wharton says that $200 billion of the projected cost will come from payment reductions on the $1.64 trillion in outstanding student loans currently on the books. In addition, the group expects borrowers to take out another $1 trillion in loans over the next decade, driven in part by the expectation that some portion of those loans will be forgiven, with the reduced payments on that new loan total coming to an estimated $275 billion.
The Penn Wharton analysis provides a range of cost estimates, with $475 billion over 10 years sitting in the middle of the range. On the high end, the plan could cost as much as $559 billion, while on the low end, it could cost $391 billion.
Whatever its cost, the plan could help the Biden administration achieve its goal of significantly reducing student loan debt now and in the future. According to Sen. Bill Cassidy, a Republican from Louisiana who opposes the plan, the SAVE program would apply to 91% of new student loans and result in only 50 cents of every dollar in student loans being repaid. The White House estimates that 85% of borrowers who attend community college will be debt-free within 10 years.
Given the size and scope of SAVE, legal challenges are expected to emerge, so it’s not certain that the plan will ultimately take effect. In the meantime, Republicans are hammering away at the plan’s cost. “The administration’s Income-Driven Repayment rule is nothing more than a backdoor attempt to provide free college by executive fiat,” Rep. Virginia Foxx, the North Carolina Republican who chairs the Education and the Workforce Committee, said after the Biden administration floated an earlier version of the payment plan.
House Republicans Look to Scale Back Infrastructure Spending
House appropriators are looking to slash billions of dollars in infrastructure funding, potentially undercutting one of President Joe Biden’s signature bipartisan legislative achievements — and potentially crippling some projects at a time when some highly visible infrastructure failures have highlighted the importance of investing in the nation’s roads, bridges and other public works.
The Washington Post’s Tony Romm and Ian Duncan report: “Some of the cuts would be particularly steep: Amtrak, for example, could lose nearly two-thirds of its annual federal funding next fiscal year if House Republicans prevail. That includes more than $1 billion in cuts targeting the highly trafficked and rapidly aging Northeast Corridor, which runs between Boston and Washington, prompting Amtrak’s chief to sound early alarms about service disruptions.”
The GOP plan reportedly would also cut funding for transit and rail programs, eliminate some money used for drinking water and wastewater grants to states, and pare back spending on efforts to reduce lead contamination.
Republicans say their proposal is about reining in the national debt by cutting back the operating budgets of federal agencies, technically leaving the new infrastructure funding in place. But, Romm and Duncan write, “the effect would be the same: The GOP bills would reduce the federal money available for repairs” even as the bipartisan infrastructure law only addressed a portion of the nation’s infrastructure needs.
Quote of the Day
“This year’s defense authorization bill is a prime example of how Senate D’s and R’s can work constructively to provide our nation’s defense, take care of our servicemembers and DoD civilians and make the investments necessary to build up our military and intelligence capabilities. I hope we can have an open and constructive process for the NDAA, without needless delay or dilatory tactics. I certainly hope we do not see the kind of controversy that severely hindered the NDAA process over in the House. Both sides should defeat potentially toxic amendments. So far, we have avoided that.”
− Senate Majority Leader Chuck Schumer, in a speech on the Senate floor Tuesday urging both parties to reject the controversial, partisan approach to the annual defense authorization bill that the House Republicans took last week in passing a version of the bill laden with conservative amendments on abortion and diversity programs. The Senate version of the NDAA faces a procedural vote Tuesday evening. Schumer said Senate leaders are working on adding more than 50 amendments for consideration. He and other leaders hope to pass their bill before their August recess.
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Fiscal News Roundup
- ‘Toxic Amendments': Schumer Prepares to Fight Far-Right Proposals in Pentagon Bill – Politico
- House GOP Seeks Billions in Cuts to Rail, Water Infrastructure Spending – Washington Post
- House Democrats Look for ‘Lines in the Sand’ on Farm Bill – Roll Call
- ‘Terrorists’: Dems Blast GOP Attempt to Strip Funding for LGBTQ Centers – Politico
- LGBTQ-Related Earmarks Fight Erupts During House Markup – Roll Call
- The New Dems Plot a Course for Biden’s Legislative Agenda – Semafor
- Biden Administration Kicks Off Plan B of Student Debt Relief – Politico
- Yellen Sees Disinflation Pressures at Work as Hiring Surge Fades – Bloomberg
- Everyone's Starting to Feel the "Soft Landing" – Axios
- Democratic Lawmaker Warns of ‘Gray Tsunami’ Coming for Medicare Benefits – The Hill
- Weight-Loss Drugs Carry High Price Tags, Lots of Questions for Seniors – Washington Post
- First RSV Antibody Treatment to Protect All Infants Approved in the U.S. – Washington Post
Views and Analysis
- We’re Already Paying for Universal Health Care. Why Don’t We Have It? – Liran Einav and Amy Finkelstein, New York Times
- Restoring Trust Fund Solvency Would Reduce Long-Term Debt Growth – Committee for a Responsible Federal Budget
- The Solution to Biden’s Student Loan Problems Is Right Before His Eyes – John Brooks, Brian Galle and Adam Levitin, Washington Post
- This Statistic Could Be Distorting How We Think About Inflation – Peter Coy, new York Times
- The Biden Accounting Jobs Boom – Wall Street Journal Editorial Board
- What We Learned From the Deepest Look at Homelessness in Decades – Ezra Klein, New York Times (podcast)
- How to Think About ‘Bidenomics’ – Gerard Baker, Wall Street Journal
- There’s a Simple Reason Voters Aren’t Crediting Bidenomics (Yet) – Jonathan Chait, New York
- Radical Problems and Liberal Solutions – Robert Kuttner, America Prospect
- Why We Should Politicize the Weather – Paul Krugman, New York Times
- These Are the 10 States With America’s Worst Infrastructure, in Dire Need of Federal Dollars – Scott Cohn, CNBC