Democrats leery of Sanders plan to cancel student loan debt

Democratic lawmakers on Capitol Hill are balking at Sen. Bernie SandersBernie SandersChamber of Commerce argues against Democratic proposals for financial transaction taxes Top Sanders adviser: 'He is a little bit angry' Working Families Party endorses Warren after backing Sanders in 2016 MORE’s (I-Vt.) call to cancel $1.6 trillion in student debt, an idea that has garnered strong interest on the campaign trail but could give Republicans more ammo to turn 2020 into a referendum on “socialism.”

Sanders’s bold proposal mirrors his daring call during the 2016 campaign to make four-year public colleges and universities free at a cost of $70 billion a year.

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Democratic presidential candidate Hillary ClintonHillary Diane Rodham ClintonTrump's economic approval takes hit in battleground states: poll This is how Democrats will ensure Trump's re-election The Hill's Morning Report - Trump takes 2020 roadshow to New Mexico MORE initially slammed the proposal in late 2015 by arguing that it would pay for the children of rich parents, like then-candidate Donald Trump’s kids, to go to school for free, but she eventually adopted the idea and offered her own plan for debt-free college.

Now Sanders is raising the ante by proposing that all student debt be canceled — and that is making Democrats in Washington nervous.

The idea is popular with the party’s left wing and is gaining traction in the presidential race.

But Democratic lawmakers are wary. On one hand, they know the idea of wiping out burdensome debts would be popular with millennial voters, who are shaping up as a crucial constituency in 2020, but piling onto the deficit to help a minority of working Americans — many from middle-class instead of working-class families — is seen as risky. 

“That’s Trumpian,” Sen. Jon TesterJonathan (Jon) TesterGOP Sen. Johnny Isakson to resign at end of year Native American advocates question 2020 Democrats' commitment House Democrats targeting six more Trump districts for 2020 MORE (D-Mont.) said of Sanders’s grand vision, which some Democrats see as about as realistic as President TrumpDonald John TrumpTed Cruz knocks New York Times for 'stunning' correction on Kavanaugh report US service member killed in Afghanistan Pro-Trump website edited British reality star's picture to show him wearing Trump hat MORE’s 2016 campaign promise to build a wall along the southern border and have Mexico pay for it.

“Higher ed is out of control cost-wise, we’ve got to do some things about it, but you can’t just say it’s going to happen. You have to have a plan to make it happen,” he said. “I agree with what he’s trying to do here, but I don’t think just saying it makes it happen.”

“It is a lot of money,” he added.

Sanders says he would pay for his plan with a tax on Wall Street speculation. It would erase the debts of an estimated 45 million graduates.

His main progressive rival, Sen. Elizabeth WarrenElizabeth Ann WarrenThe Hill's 12:30 Report: NY Times story sparks new firestorm over Kavanaugh Working Families Party endorses Warren after backing Sanders in 2016 Warren proposes new restrictions, taxes on lobbying MORE (D-Mass.), who has been rising steadily in the polls, has a competing proposal that would spend $1.25 trillion to forgive student debt and eliminate tuition at public colleges.

The calls for student debt forgiveness and free public universities come on top of other expensive proposals that Sanders and Warren have backed, such as “Medicare for All” and the Green New Deal, which have been estimated to cost about $28 trillion to $32 trillion and $18 trillion to $93 trillion, respectively, over 10 years.

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Sen. Mark WarnerMark Robert WarnerTop Democrat demands answers from CBP on security of biometric data 2020 Democrats raise alarm about China's intellectual property theft State probes of Google, Facebook to test century-old antitrust laws MORE (D-Va.) said erasing more than $1 trillion in student debt would help today’s graduates at the expense of future generations who would be stuck with an enormous federal debt, impacting everything from the value of the dollar, to interest rates, to the ability to pay for social services in the future.

Warner said he supports the goal of reducing student debt to spur economic growth and acknowledged that banks got bailouts — something Sanders highlighted when he unveiled his proposal Monday — but is worried about the nation’s fiscal health.

“I worry about the $23 trillion in debt. If we simply move more of that debt at the national level onto young people’s backs, that’s going to be a burden you’re still going to have to absorb as well,” he said.

Warner served on a bipartisan group of senators known as the Gang of Six in 2011 that put together a plan to reduce the deficit by $3.7 trillion over 10 years. It was the last time there was a serious push in Congress to reduce the deficit.

The push by Sanders and Warren to erase hundreds of billions of dollars in debt comes at an awkward time for Democrats, when Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellThe Hill's 12:30 Report: NY Times story sparks new firestorm over Kavanaugh Senator asked FBI to follow up on new information about Kavanaugh last year Congress must reinstate assault weapons ban MORE (R-Ky.) wants to make 2020 a “referendum on socialism.”

“I would love to see the fiscal analysis of how you get from here to there. It seems to me to be another huge add to the debt, which is a big problem,” said Sen. Mike CrapoMichael (Mike) Dean Crapo2020 Democrats raise alarm about China's intellectual property theft Trump faces tough path to Fannie Mae, Freddie Mac overhaul A US-UK free trade agreement can hold the Kremlin to account MORE (R-Idaho), chairman of the Senate Banking Committee. 

Proponents of the bold liberal proposals argue that student debt forgiveness, Medicare for All and the Green New Deal would produce economic stimulus and savings that would defray their total costs.

One problem with erasing student debt, however, is that it would disproportionally benefit a relatively small slice of American society.

Only a third of American adults have four-year college degrees and they tend to earn more money than workers without college degrees. 

Sen. Amy KlobucharAmy Jean KlobucharFive top 2020 Democrats haven't committed to MSNBC climate forum Abrams helps launch initiative to train women activists, organizers The Hill's Morning Report - Trump takes 2020 roadshow to New Mexico MORE (D-Minn.), who is running for president as more of a centrist, has argued on the campaign trail that free college is unrealistic, telling students at Saint Anselm College in New Hampshire: “I wish I could staple a free college diploma under every one of your chairs.”

Klobuchar has instead advocated for letting people with student debt refinance their obligations at lower interest rates.

Many Democratic senators say they would prefer a more moderate approach like Klobuchar’s.

“I think there should be a plan to help people with their financial debt but it’s probably going to be based on needs,” said Sen. Gary PetersGary Charles PetersHillicon Valley: Google to promote original reporting | Senators demand answers from Amazon on worker treatment | Lawmakers weigh response to ransomware attacks Lawmakers weigh responses to rash of ransomware attacks Dem senator calls for Pentagon watchdog to probe Air Force's Trump resort stay MORE (D-Mich.), who cited doctors in rural areas and teachers in low-income areas who would deserve debt forgiveness.

“I think we’ve got to think it through,” he said.

Sen. Mazie HironoMazie Keiko HironoOvernight Health Care: Juul's lobbying efforts fall short as Trump moves to ban flavored e-cigarettes | Facebook removes fact check from anti-abortion video after criticism | Poll: Most Democrats want presidential candidate who would build on ObamaCare Lawmakers urge DNC to name Asian American debate moderator Democratic senator on possibility of Trump standing up to the NRA: 'That's just such BS' MORE (D-Hawaii) said the bold proposals by Sanders and Warren “points out there are billions of dollars in student debt [and] we can’t even try to get a bill on the floor to enable them to refinance.”

Yet, Hirono also says that graduates should bear some responsibility for their debts.

“I had student debt but I also believe in the responsibility of paying the debt,” she said. “I also support the forgiving of student debt for people who go into certain kinds of needed fields.”

Sen. Bob CaseyRobert (Bob) Patrick CaseyEx-GOP congressman to lead group to protect Italian products from tariffs The Hill's Morning Report - Progressives, centrists clash in lively Democratic debate Democrats press Trump Treasury picks on donor disclosure guidelines MORE Jr. (D-Pa.) said “in the short run we’re better off trying to reduce the monthly payment as best we can.”

“I don’t think there’s support here for that proposal,” he said of canceling more than a trillion dollars in student debt.

Sen. Ben CardinBenjamin (Ben) Louis CardinCongress passes bill to begin scenic byways renaissance GOP lawmaker: 'Dangerous' abuse of Interpol by Russia, China, Venezuela Senators pressure Trump to help end humanitarian crisis in Kashmir MORE (D-Md.) said the idea of simply canceling existing debt is too simplistic.

“As far as existing debt, it’s not quite as simple as just canceling [it]. I know some of our candidates have suggested that,” he said. “I think you have to look at the circumstances and ground rules at the time” loans were taken out.

Cardin said he would be more sympathetic to helping people reorganize debts and make them easier to pay back.

Yet the idea of wiping away student debt is popular among many Democratic voters and lawmakers still remember how Sanders saw the appeal of free college before most others in their party.

Several Democrats declined on Tuesday to dismiss a blanket student debt amnesty out of hand.

“I want to do something about student debt,” said Senate Minority Whip Dick DurbinRichard (Dick) Joseph DurbinSenators struggle to get spending bills off ground as shutdown looms Trump defends push to ban flavored e-cigarettes: Let's 'keep young children from Vaping!' Overnight Defense: Dems grill Trump Army, Air Force picks | House chair subpoenas Trump Afghanistan negotiator | Trump officials release military aid to Ukraine MORE (D-Ill.). “I’m open to suggestions.”