After being vocal about the bipartisan group’s support of President Biden’s Inflation Reduction Act, the president of the Committee for a Responsible Federal Budget is walking back her stance on Biden’s economy after his announcement of student loan debt handouts.
"It has barely been a week. The ink is not dry on that legislation, and the White House has single-handedly undermined all of those savings, all of the positivity that one would see from a fiscally responsible point of view, with this new bill, which is most certainly not fiscally responsible. It's reckless," President Maya MacGuineas told FOX Business’ Maria Bartiromo Friday.
According to the budget watchdog, who joined "Mornings with Maria," the Biden White House has decided to add money to the economy at the "wrong time" with the "wrong policy." MacGuineas’ committee has reported the total taxpayer cost of student loan handouts will be $500 billion.
"It's cynical and depressing," MacGuineas said. "We call it like we see it, we supported that bill a few weeks ago, and now are really kind of shocked that the White House would decide to undo all that work."
The White House’s attempt to subsidize higher education gives Americans the future expectation that more debt will get canceled, the economic expert argued.
"So you're going to have universities and colleges saying, ‘We can hike up tuition because people are going to come here believing they're not going to have to pay the loans that they agree to pay,’ and that there's going to be this ongoing cancelation situation," MacGuineas expanded further.
That pricing impact on college tuition, MacGuineas argued, will drive up overall inflation.
"It's very bad for the moment we're in with the economy," she said. "Here's the Fed trying to fight inflation and Washington's making it worse. But in particular, it will add to the cost of higher education, which is a real problem."
With November’s midterm elections just 70 days away, MacGuineas raised concerns that student loan handouts are a political stunt.
"It's got to be politically motivated because there's not a single policy expert who is sort of impartial and cares about the real problem of the unaffordability in higher ed, who says this is the right solution," MacGuineas said.
Since the student loan legislation doesn’t address the root causes of piling debt, the White House is making the economy "worse" and adding to the deficit, the Committee for a Responsible Federal Budget president noted.
"To have this come on the heels of Congress having negotiated for over a year, to get that first deficit reduction bill passed and to undermine all of that, it must be frustrating to a lot of the people who cared about the deficit and worked so hard to get us there in the first place," MacGuineas said.