ICYMI: Axne Says Biden's Student Loan Transfers 'Will Bring Down Inflation'
"Rep. Cindy Axne, D-Iowa, is pushing back on claims from Republicans that President Biden's student debt handout, which is projected to cost an estimated $500 billion, will increase inflation and taxes as the midterm elections approach.
Pointing to analysis from Wall Street, Axne, who has served as the representative for Iowa's Third Congressional District since 2019, insisted the plan is "something that will not impact inflation negatively."
'Today, Goldman Sachs an analysis that said the net impact of the debt forgiveness and resuming student loan payments is likely to be very modest, but it will be slightly disinflationary, so it will bring down inflation,' Axne said Friday during an appearance on KMA's "Morning Line" program.
In contrast, analysis released Friday from the Committee for a Responsible Federal Budget (CRFB) projected the initiative will "boost inflation by 15 to 27 basis points over the next year."
Several economists are also warning of the adverse effects on inflation from Biden's plan.
'What we're hearing is a lot of baseline games, which means people, in order to make the claim that this wouldn't be inflationary, are assuming that this wouldn't be inflationary at all,' Committee for a Responsible Federal Budget President Maya MacGuineas told FOX Business. 'Compared to something that wasn't the law, you can say it wasn't going to be inflationary. But compared to what was going to happen, it is inflationary.'
Jonathan Bydlak, policy director for governance at the libertarian R Street Institute, said this week that the White House's argument that the plan will not negatively impact inflation stretches the truth.
'Pausing student loans for as long as we have, even when, you know, the U.S. economy has bounced back post the pandemic, has been an inflationary ... influence,' Bydlak said. 'Even if what the White House is saying is true — and I think that's a bit of a stretch — it's still correct to say that this measure is holding in place ... an existing upward pressure on prices.'"
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