Democrats leery of Sanders plan to cancel student loan debt

Democratic lawmakers on Capitol Hill are balking at Sen. Bernie SandersBernie SandersWarren, Daines introduce bill honoring 13 killed in Kabul attack trillion tax hike the opposite of 'good investment' Progressive groups call for Puerto Rico Fiscal Control Board to be abolished 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 ClintonPennsylvania GOP authorizes subpoenas in election probe We must mount an all-country response to help our Afghan allies Biden nominates ex-State Department official as Export-Import Bank leader 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) TesterDemocrats say Biden must get more involved in budget fight Senate backers of new voting rights bill push for swift passage The Hill's 12:30 Report - Presented by Facebook - Polls open in California as Newsom fights for job MORE (D-Mont.) said of Sanders’s grand vision, which some Democrats see as about as realistic as President TrumpDonald TrumpFormer Sen. Heller to run for Nevada governor Overnight Defense & National Security — Milley becomes lightning rod Joint Chiefs Chairman Milley becomes lightning rod on right 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 WarrenWarren, Daines introduce bill honoring 13 killed in Kabul attack Boston set to elect first female mayor Progressive groups call for Puerto Rico Fiscal Control Board to be abolished 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 WarnerAdvocates call on top Democrats for 0B in housing investments Democrats draw red lines in spending fight Manchin puts foot down on key climate provision in spending bill 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 McConnellCEOs urge Congress to raise debt limit or risk 'avoidable crisis' Capito grills EPA nominee on '#ResistCapitalism' tweet Hassan launches first ad of reelection bid focusing on veterans' issues 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 CrapoThe Energy Sector Innovation Credit Act is an industry game-changer The 19 GOP senators who voted for the T infrastructure bill Wyden asks White House for details on jet fuel shortage amid wildfire season 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 KlobucharSeven takeaways from California's recall election Live coverage: California voters to decide Newsom's fate Overnight Hillicon Valley — Ex-US intel operatives pay to settle hacking charges 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 PetersFreedomWorks misfires on postal reform Senators call on Taiwan for aid in automotive chip shortage Lawmakers raise concerns over federal division of cybersecurity responsibilities 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 HironoSenate Democrats to Garland: 'It's time to end the federal death penalty' Democrats warn shrinking Biden's spending plan could backfire Hillicon Valley: Facebook tightens teen protections | FBI cautions against banning ransomware payments | Republicans probe White House-social media collaboration 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 CaseyDemocratic senators request probe into Amazon's treatment of pregnant employees Abortion rights groups want Biden to use bully pulpit after Texas law Overnight Health Care: Democrats plot response to Texas abortion law 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 CardinOvernight Defense & National Security: War ends, but finger pointing continues Harris presides over Senate passage of bill assisting Americans fleeing Afghanistan Senate panel votes to repeal Iraq war authorizations 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 DurbinDick DurbinDemocrats hope Biden can flip Manchin and Sinema US gymnasts offer scathing assessment of FBI The Hill's 12:30 Report - Presented by Facebook - Simone Biles, gymnastics stars slam FBI during Nassar testimony MORE (D-Ill.). “I’m open to suggestions.”