On Student Debt Forgiveness, Joe Biden Is Pushing Stringent Means-Testing Yet Again

Joe Biden is considering a highly limited, means-tested student debt forgiveness program. But means-testing is a terrible idea that centrist Democrats are still obsessed with — and will pay a heavy political price for.

Joe Biden is boosting the media-manufactured fiction that real, universal college debt relief would mostly help rich Ivy League kids. (Gage Skidmore / Flickr)

During the 2020 Democratic primary, Pete Buttigieg’s personal ambition led him to poison the conversation about education in America. Desperate for a contrast point with his rivals, the son of a private university professor aired ads blasting the idea of tuition-free college because he said it would make higher education “free even for the kids of millionaires.”

The attack line, borrowed from former secretary of state Hillary Clinton, was cynicism masquerading as populism. It was an attempt to limit the financial and political benefits of a proposal to make college free. Worse, it was disguised as a brave stand against the oligarchs bankrolling Buttigieg’s campaign, even though it actually wasn’t — almost no rich scions would benefit from free college.

This rancid form of bullshit was a staple of Buttigieg’s campaign — like “Medicare for All Who Want It” — but he and copycats like Amy Klobuchar were just pushing the larger lie that is now the foundation of economic policy debates. Call it the means-testing con — the idea that social programs should not be universal and should instead only be available to those who fall below a certain income level. It is a concept eroding national unity and being carried forward by wealthy pundits and a Democratic Party that has discarded the lessons of its own universalist triumphs like Social Security, Medicare, and the GI Bill.

This break from universalism popped up this week when the Joe Biden administration tore a page from Buttigieg 2020’s assault on the higher education discourse: the White House leaked that it is considering finally following through on Biden’s promise to cancel some student debt, but not the $50,000 pushed by congressional Democrats, and only for those below an income threshold. That’s right — as Biden’s poll numbers plummet among young people, his administration is considering limiting and means-testing debt relief for federal loans that were already effectively means-tested through need-based eligibility requirements.

In trial-ballooning the college debt relief proposal, Biden is boosting the media-manufactured fiction that real, universal college debt relief would mostly help rich Ivy League kids — even though data from the Roosevelt Institute conclusively proves that canceling student debt “would provide more benefits to those with fewer economic resources and could play a critical role in addressing the racial wealth gap and building the Black middle class.”

Crucially, the report points out: “People from wealthy backgrounds (and their parents) rarely use student loans to pay for college.” This makes sense when you think about it for several seconds: if student debt relief was actually a boon to the rich, politicians would have treated it like every other oligarch handout and just immediately passed it with no controversy or debate at all.

But setting aside how the media-driven discourse omits those inconvenient facts, what’s noteworthy here is the underlying principle.

This latest discussion of means-testing follows Biden and congressional Democrats pushing to substantially limit eligibility for COVID-19 survival checks and the expanded child tax credit. Taken together, it suggests that Democrats’ zeal for means-testing is no anomaly — it is a deeply held ideology that is both dangerous for the party’s electoral prospects and for the country’s fraying social contract.

Means-Testing Is a Weapon Against the Poor

The superficial appeal of means-testing is obvious: it promises to prevent giving even more public money to rich people who don’t need it.

But have you ever noticed that means-testing proponents don’t want means-testing for giant income tax cuts, tax deductionscorporate subsidiesbank bailouts, or any other government handouts to the rich?

Have you ever noticed that demands for means-testing only emerge during debates over social programs for the nonrich?

Yeah, that’s the tell — the one that lets you know means-testing isn’t anti-oligarchy, it is pro-immiseration and otherization.

Means-testing is a way to take simple universal programs and make them complicated and inaccessible. In practice, calculating exact income levels and then proving them for eligibility means reams of red tape for both the potential beneficiary and a government bureaucracy that must be created to process that paperwork.

Data from the food stamp and Medicaid programs illustrate how means-testing creates brutal time and administrative barriers to benefits, which reduce payouts to eligible populations, as Representative Alexandria Ocasio-Cortez (D-NY) rightly suggested. And as the American Prospect’s David Dayen points out, in the case of means-testing student debt relief, those barriers may end up wholly excluding large swaths of working-class debtors. They may even exclude medical school debtors in the middle of a public health crisis, and lawyers who don’t all end up with high-paying corporate jobs.

This is a feature, not a bug — it is means-testers’ unstated objective. Their support for high-income tax cuts, corporate subsidies, and other oligarch giveaways should definitively prove they aren’t little-guy populists who want to limit help to the rich. They are let-them-eat-cake austerians who see means-testing as a technocratic way to weaponize red tape in service of limiting help to the poor.

Screaming that quiet part out loud during the debate over the child tax credit, Senator Joe Manchin (D-WV) — who previously backed a Wall Street bailout for his donors — positioned himself as the Beltway’s means-tester-in-chief, while declaring that “I cannot accept our economy, or basically our society, moving towards an entitlement mentality.” Then the West Virginia coal magnate took time away from his yacht and Maseratied himself over to the Capitol to reportedly tell his Senate colleagues that the child tax credit had to be limited in order to prevent destitute parents from wasting it on drugs.

For its part, the Biden White House recently lamented that “long forms, long lines, and lots of documents — these are the hurdles that can make it difficult and frustrating for individuals and communities to access government programs and services.” Yet, the kind of means-testing Biden is floating for college debt relief would make that Kafkaesque status quo even worse.

In effect, means-testers are trying to intensify the crushing and regressive taxes America imposes on people’s limited time — the administrative burden that rich folk can pay accountants and attorneys and personal assistants to evade, but that everyone else has to try to muddle through on their own.

“Targeted Social Programs Make Easy Targets”

That “on your own” religion is the biggest problem right now on virtually every policy issue — from economics to climate, from public health to education, much of America has brushed off the “ask not what your country can do for you” ethos, and embraced the belief that we’re all bowling alone and shouldn’t care about anyone other than ourselves. The new national religion is Margaret Thatcher’s refrain that “there is no such thing” as society — and means-testing is a key tenet of that catechism.

Universal programs like Social Security and Medicare may be derided as “entitlements,” but the reason they have (so far) survived for so long is because their universality makes them wildly successful in their missions and more difficult to demonize. It also precludes austerians from otherizing and disparaging the programs’ recipients. Indeed, “keep your government hands off my Medicare” was a ridiculous Republican form of Obamacare criticism, but it also underscored the transpartisan unity in support of universal social programs that provide the same benefits to everyone regardless of income.

Means-testing destroys that potential unity. It may initially poll well, but it turns “entitlements” into complicated “welfare” programs only for certain groups, which then makes those programs less popular and makes the beneficiaries easy scapegoats for political opportunists (which then stigmatizes recipients and deters them from getting the assistance).

Think Ronald Reagan’s “welfare queen” trope vilifying recipients of means-tested food stamps. Then think about all the iterations of that us-against-them attack that have justified ever-more-cruel cuts to the social safety net over the last half century, leading us to a Joker America where fewer and fewer people — and especially fewer young people — believe the government is interested in helping anyone other than wealthy political donors.

“When eligibility for benefits is conditional, all kinds of bad things happen, ranging from the intentional exclusion of whole (usually maligned and disempowered) demographics to huge numbers of otherwise-eligible people tripping over red tape and falling through the cracks,” wrote Jacobin’s Megan Day. “Another major problem with means-testing is political: so long as there’s an income threshold, austerity-minded politicians will always try to lower it, leaving more people out as time goes on. In other words, targeted social programs make easy targets.”

Now sure, billionaires are eligible for Social Security and Medicare, and their kids are eligible for free K-12 education — and that aristocracy absolutely doesn’t need that help. But when those programs were created, we decided that retirement income, old-age medical care, and public education are universal rights, not targeted privileges.

By extension, we accepted that rich people being granted those rights along with everyone else was the relatively small price to pay for simplicity, universalism, and the attendant national unity that comes with it. (America also decided that it would recoup that largesse to the rich with far higher and more progressive tax rates — which the means-testers typically do not support.)

Not surprisingly, Democrats’ creation of popular universalist programs coincided with the most electorally successful era in the party’s history, and polls continue to show huge support for initiatives like universal pre-K and universal childcare.

Equally unsurprising: the era of Buttigieg, Klobuchar, Biden White House staffers, and other smarmy Democratic automatons promoting fake means-test populism has coincided with rising popular hatred of liberal technocrats and the Democratic Party they control.

A Return to Roots, Before the GOP Figures It Out

What is surprising is that Republicans may be starting to understand all this better than Democrats.

For instance, President Donald Trump’s signature spending legislation offered direct, non-means-tested aid to small businesses during the pandemic. It was hardly perfect, but it was straightforward, universal and relatively successful: Federal Reserve data show it produced far more widespread help to the working class than Democrats’ top-down bank bailout during the financial crisis. And because of that simplicity and success, it was popular.

Same thing when it came to the uninsured during the pandemic. In a corporate health care system that rations care for the poor, Trump touted a plan to just pay hospital bills for COVID patients who didn’t have coverage. Again, it was hardly perfect in its implementation, but it signaled Republicans’ understanding of a salable principle: keep it simple, stupid.

The COVID survival checks under Trump were means-tested, but for the most part they went out automatically and to nearly everyone — even, supposedly, the kids of uberwealthy senator Mitt Romney (R-Bain Capital). The checks were simple and popular, and the public wanted more.

When it comes to student debt relief, there’s a rare chance for Democrats to also embrace simplicity — and prevent the GOP from outflanking them. They can reject the best-and-brightest pedants whose paternalistic West Wing–ism scoffs at simplicity and presumes social programs are only smart if they are impenetrably complex. Those know-it-all liberals championed the trade, tax, deregulatory, and means-tested austerity policies that incinerated the Democratic Party brand among working-class voters. It’s long past time for a change.

Democrats now have the opportunity right in front of them — they can reject the small-minded technocrats who dominate Washington and realize that complexity is not a hallmark of intellect, but is often instead the afterbirth of those too stupid or corrupt to make things simple. More specifically, they can use the student debt crisis to finally return to their universalist roots — and they don’t have to skimp and provide merely $10,000 worth of relief.

“Republicans will attack forgiving $10,000 in student debt as voraciously as if Biden canceled all student debt while demoralizing tens of millions who will still be drowning in it,” wrote Senate Democrats’ Budget Committee staff director Warren Gunnels. “Think big or go home. Cancel all of it.”

Biden has the executive authority to do exactly that. He could simply send out a one-page letter to every student borrower telling them that their federal student debt is now $0.

Yes, if that happened, bailed-out private equity kingpin and onetime car-elevator owner Romney would throw another temper tantrum about “free stuff.”

Yes, Republican lawmakers would try to block it, Jeff Bezos’s editorial board would be mad, and affluent pundits would tweet-cry to each other, incensed that some less fortunate people stuck in a predatory debt trap would get to enjoy even a taste of the freedom and luxury they’ve enjoyed their whole lives.

But amid all that elite whining and couch fainting, Democrats would be launching a battle against an immoral system of education debt — and directly helping 40 million voters ahead of a midterm election.

It’s so easy and simple — which is probably why they won’t do it.