Live from Music Row Friday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed Congressman John Rose (R-TN-06) to the newsmaker line to describe his recent tweet regarding Biden’s loan forgiveness program as a regressive transfer of wealth from the middle class to the upper class.
Leahy: We welcome to our newsmaker line our good friend Congressman John Rose, who represents the 6th Congressional District here in Tennessee. Good morning, Congressman Rose.
Rose: Good morning, Michael Patrick. Thanks for having me on The Tennessee Star Report this morning.
Leahy: Well, we’re always glad to have you on here. And you’ve not yet been in studio, so you got to come in studio sometime. I’ll have some really good coffee for you.
Rose: I’m looking forward to that. I’m a Diet Mountain Dew drinker. (Chuckles)
Leahy: We’re making a note. We are going to have a supply of Diet Mountain Dew, and it’s going to have your name on it, Congressman Rose.
Rose: I appreciate that.
Leahy: You’ve been obviously very critical of the Biden maladministration’s student loan forgiveness program you tweeted out earlier this week: President Biden should reverse course on this unprecedented handout and work with Republicans on addressing the rising cost of higher education.
My question on the student loan forgiveness of $10,000 per student that the president says he’s going to do, I have not yet seen. A, an executive order on it, and B, would an executive order even be legal? Your thoughts on that?
Rose: Well, this is one of those things I think Nancy Pelosi had right a year ago when she said very forcefully, very flatly that the president doesn’t constitutionally have the authority to do this. And I think she was right.
Obviously, she’s backtracked on that statement because she wants to support what the president is doing. And obviously, this is a very blatant obvious attempt to try to buy votes in November in the November election. So, no, I don’t think he has the authority.
If he has the authority to do this. I think listeners are all smart enough to decipher through this. I think anyone you don’t have to be a constitutional lawyer to know if the president can just give away $400 billion to someone he chooses to give it to or to numerous people, then he can do anything all by himself. And that’s not the way the U.S. government is set up.
Leahy: The president’s people may actually have been listening to you, Congressman Rose, because there’s a report in the Daily Mail that they announced on Thursday that this loan forgiveness program will not apply to 4 million borrowers with loans owned or backed by private companies. They must be reading your Twitter feed.
Rose: (Laughs) I think still the president can’t spend this much of the taxpayers’ money, the people of the United States’ money without going through Congress. That’s the way the system works. And so he has to do that.
And unfortunately, because he is the president, he holds a veto pen. So, frankly, even if we win a majority in November come to January 3rd, presumably if a new Republican majorities were to reverse this, the president would still hold veto pen and would veto that action.
So we’re going to have to rely on the third branch, the judicial branch, to step in and fix this. And they’re already lawsuits being filed. A group of states has filed a lawsuit. I think six now have signed on.
And we’re going to have to, unfortunately, wait and see what the courts do. Again, we can probably take action in Congress, particularly in the next Congress. We might be able to, of course, not sure if we’d be able to get the Senate to take action, but the president would in all likelihood veto that.
We learned, though, this week the CBO reported what I think most of us suspected, and that is the cost is much higher. So $400 billion is the estimated price tag now. And interestingly, you mentioned the number 10,000, which is the one that’s thrown around a lot, but the CBO shows that 24 million borrowers will actually get up to $20,000 in debt forgiveness.
And the tragedy of this is that working Tennesseans, plumbers, welders and construction workers are picking up the tab for some of the wealthiest Americans. They’re going to be paying off the student loans for Harvard-educated lawyers and doctors.
And it will be one of the largest wealth transfers from working-class Americans from the middle class, lower and middle class to the upper class because 20 percent of households owe three times as much student debt as the bottom 20 percent of households.
So the top 20 percent is going to be getting a subsidy from the bottom 20 percent. And it’s just ridiculous. It’s the most regressive program, I think, in American history.
Leahy: You’re an accomplished businessman, and when you take a look at the actual how the money works, it seems to me that the consequence of the student loan program has been the following: the student loans are given basically to anybody, and as a result of the availability of loans, what colleges around the country have been doing is they raise their tuition rates and deliver really less quality education for more money.
People take the loans, they pay the higher tuition rates, they have the college experience, they get out, and they get a job as a cab driver.
Rose: That’s exactly right. If you really want to fix this problem. First of all, I mean, the Obama administration, president Biden had a hand in this because obviously, he was vice president. They took over.
They federalized the student loan program as a part of passing Obamacare, and they did so because, at the time, they estimated that it was over a 10-year period. Now, the government is always looking at 10-year periods, regardless of the fact that that usually doesn’t end up working out the way they think.
But at the time they projected, I think there was going to be $65 billion in profits over the next 10 years. In fact, what has happened is the federal government, we taxpayers, have actually lost money by the federalization.
And exactly what you are telling us is what has happened, which is that universities have just been incentivized or allowed to increase their tuition rates for the students who then borrow that money from the federal government through this program and there’s no accountability.
And so one of the solutions here is of course we need to return to the more principled way we had student loans done prior to the Obama takeover by the federal government and that is where we had underwriting of these loans where you had lenders that were actually asking questions about the ability of the borrower to repay.
Pretty common stuff when it comes to borrowing money and prohibits universities from selling a bill of goods to these students who pay high tuition for which their degrees have no prospect of ever allowing them to generate the income to pay back the loan.
Leahy: But you know there’s a lot of jobs and gender studies out there right?
Rose: (Laughs) Exactly. If you travel around the country it’s true even in Tennessee and what you see is gold-plated universities all over this country that are building new buildings. They have meticulously manicured lawns, they are beautiful places and the American people are picking up the price tag.
And we’ve burdened a whole generation of students with loans that they’re having trouble repaying because we’ve really had this wealth transfer to universities.
And of course, God only knows that these folks at the university diversities are not friends of the American way of life and the American principles that we all value and cherish.
Listen to today’s show highlights, including this interview:
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Tune in weekdays from 5:00 – 8:00 a.m. to The Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.
Photo “John Rose” by Congressman John Rose. Background Photo “Joe Biden” by The White House.
