Contrary to the assertions made by the Biden administration and some congressional leaders, our federal fiscal outlook is becoming substantially worse, as this administration is proposing to engage in an unprecedented and unconstitutional action in connection with student loans. To restore fiscal responsibility and stave off a future debt crisis, we must make an honest and sober assessment of what is going on in Washington.
Since one political party took control of Congress and the executive branch in 2021, it has passed legislation that increased federal spending by nearly $4 trillion over 10 years. It began with the bloated $1.9 trillion American Rescue Plan Act, which passed in the spring of 2021 on a purely partisan basis. This legislation did not have adequate safeguards and oversight, resulting in hundreds of billions in waste and work disincentives. More importantly, this flood of federal dollars has been a primary driver of today’s high inflation.
Other pieces of legislation with some bipartisan support include the Infrastructure Investment and Jobs Act, with a price tag of $1.2 trillion, as well as the CHIPS Act and PACT Act with price tags of $287 billion and $278 billion, respectively.
While the titles reflected the substance of these bills, none of them were paid for. Collectively, they will cost more than $3.6 trillion, which will all be added to the nation’s already record-high and increasing debt burden.
Then came the Inflation Reduction Act. This bill is probably the worst piece of false advertising we have seen in our lifetimes. Several independent parties, such as the Congressional Budget Office and Penn Wharton, have dismissed any inflation reduction related to this bill. It will also fail to reduce deficits before 2027. It was instead a climate, health care, and tax bill that will increase federal spending by $437 billion. And, although it may reduce projected deficits, on paper, over the next 10 years by about $300 billion from higher taxes, increased tax enforcement, and budgetary gimmicks, overall spending and debt from the prior bills is a whopping $3.6 trillion.
The most recent example of fiscal irresponsibility is President Biden’s proposal to forgive up to $10,000 in student loans for single individuals making less than $125,000 or households making less than $250,000 a year, along with an additional $10,000 in Pell Grant relief. This is estimated to cost as much as half a trillion dollars over the next decade, which would more than wipe out all alleged deficit reduction from the so-called Inflation Reduction Act. This unilateral executive action is illegal, inequitable, inflationary, and fiscally irresponsible. The student loan bailout, on top of other spending bills, would result in at least $4.3 trillion in additional spending, as well as over $4 trillion in new debt over 10 years – all occurring in less than two years of complete Democrat control.
Student loans collectively represent the largest asset on the federal government’s balance sheet. No president has the right to single-handedly dispose of federal assets and effectively engage in “back door” spending of hundreds of billions of taxpayer dollars; only Congress has the power of the purse. While the president has limited discretion to defer payments under certain circumstances, only Congress can authorize loan forgiveness. Any executive action to the contrary should be met with a swift and strong legal challenge for its clear constitutional overreach. Even Speaker Pelosi has publicly acknowledged as much in the past, and she is right.
Considering the above, the administration continues to make the audacious and deceptive claim that it is being fiscally responsible, pointing to their projection of a $1.7 trillion year-over-year deficit reduction. However, that is primarily a result of the almost $2 trillion American Rescue Plan and the massive multi-trillion spending spree in 2021, not some act of fiscal restraint. The federal government’s balance sheet and the projected structural deficit have gotten worse over the last two years, putting our nation on an even greater unsustainable, and immoral, fiscal path.
While the Biden administration should be sued for its illegal student loan scheme, Congress should be taken to court for ignoring its Article V mandate to call a Convention of the States to propose Amendments. As early as 1979, more than the required two-thirds of states had filed applications for an Article V Convention, the vast majority of them advocating solely for a fiscal responsibility amendment to the Constitution.
House Concurrent Resolution 101 and its soon-to-be-introduced Senate companion requires Congress to call the long overdue Convention of States to consider amendments to the Constitution that would rein in Congress and restore fiscal sanity. Given the fiscal failures of both parties over the years and the gross negligence of the current administration and Congress, it has never been more apparent that a new approach, and a constitutional solution, is required to protect the future prosperity and security of our country for generations to come.