Here's how Joe Biden can cancel student debt on day one
The incoming Biden administration is facing increasing pressure to cancel federal student loan debt, something Joe Biden is reportedly considering through executive action, which would not require Congress to pass legislation. Astra Taylor, a member of the Debt Collective, says canceling student debt would be a boon to debtors and the wider economy, and could be part of a larger wave of progressive action from the Biden administration. "There was a sense right after the election … that because Democrats didn't take the Senate that it would be impossible for a Biden administration to govern," says Taylor. "There are things that Biden can do if he's willing to play hardball, if he's willing to actually understand that's what Republicans do, and the Democrats can do the same."
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AMY GOODMAN: We're going to turn right now to Astra Taylor. Astra Taylor of the Debt Collective. The protest comes as the incoming Biden administration is also facing increasing pressure to cancel all federal student loan debt. On Wednesday, a group of 200 groups sent a letter to Biden and Vice President-elect Kamala Harris urging them to "use executive authority to cancel federal student debt on day one of their administration."
So yes, we are turning now to the writer, to the filmmaker, to the organizer Astra Taylor, who is a member of the Debt Collective which has just published a book titled Can't Pay, Won't Pay: The Case for Economic Disobedience and Debt Abolition. Astra wrote the foreword to the book as well as a new piece in The Guardian that's headlined We're being told Biden won't be able to achieve much. We must reject that idea. We turn right to that theme. Astra, let's begin there. What does it mean to say that we must reject this idea that not much can be achieved during a Biden administration?
ASTRA TAYLOR: First, thanks so much for having me. Wonderful to follow up on those brave words from Representatives Cori Bush and Alexandria Ocasio-Cortez. The "Biden, be brave" rally also captures this spirit. There was a sense right after the election, the election that is still unending, that because Democrats didn't take the Senate that it would be impossible for a Biden administration to govern. What is so great in this moment is how the grassroots are saying, "No, we actually have a deep understanding of how power works and what power you will have, even if the Democrats do not manage to flip those Senate seats in Georgia." Of course flipping those seats would be ideal, keeping those seats and winning those for the Democrats would be ideal. But nevertheless, there are things that Biden can do, if he's willing to play hardball. If he's willing to actually understand that that's what the Republicans do and the Democrats need to do the same.
So there's a movement afoot to pressure the Biden administration to do this, first by saying, "We know that you possess this power." So for example, Biden can make appointments using the Vacancies Act, the Federal Vacancies Reform Act. This is a power that Trump used even though he had the Senate on his side. This essentially allows the president to appoint Cabinet-level posts, people who have been confirmed by Congress or senior employees within certain agencies. I would recommend people follow Demand Progress and the Revolving Door Project, which have been doing a lot of great work on this, essentially saying there is a way to put people in positions of power so that you can advance the progressive agenda that you were elected to advance.
Because as AOC made so clear, progressives won this election. And in a moment of pandemic and economic crisis, we simply cannot afford to have a government that fails to govern in the interest of the people. It's also the self interest of the Democrats, because they will be crushed in 2022 or 2024 if they don't do this. So I am very heartened by movements paying attention of these sorts of things, thinking about staffing, thinking about important positions.
I think all of these social moments, whether we're talking about climate change, whether we're talking about economic justice, student debt—we recognize the importance of positions like the Treasury or the Office of Management and Budget, and realize it's all interconnected. And we need people who are committed to meeting the moment as opposed to the same old politics of austerity. We need those people in place right now. So the Debt Collective is very concerned, for example, with issues—who staffs the Department of Education, to ensure that we don't have a repeat of the Obama-Biden administration. We cannot afford to have an Obama 2.0 at the level of the Department of Education.
AMY GOODMAN: And of course we're talking about the Obama-Biden administration, except Biden would be—is the president-elect. Now, can you talk about the wish list for Cabinet members? A lot has been talked about. Apparently, President-elect Biden is about to name his treasury secretary. Among those who progressives have really been pushing is Senator Elizabeth Warren, but there is concern that because she comes from Massachusetts, which has a Republican governor, that that would not guarantee who would fill that Senate seat.
And of course, the Senate, it has not been decided who will run the Senate, because of the two Georgia senatorial runoffs. But the possibility of Elizabeth Warren. Now the name being floated among others is Janet Yellen.
You have Bernie Sanders wanting to be labor secretary. The concern that his state, Vermont, the governor is also Republican. Phil Scott, who says that he would choose an independent, which of course, Bernie Sanders is, that would possibly caucus with the Democratic Party. But in both these cases, you've got these Republican governors who make the final decision. What about the Cabinet, how important it is and these particular candidates, Astra?
ASTRA TAYLOR: It is absolutely important that we put forward—I think the first thing that the Biden administration needs to do is put forward bold progressive options like Elizabeth Warren. Sarah Bloom Raskin is another person that people are interested in. I think she was at the Treasury under Obama and has said some really interesting things about climate and the power of the Treasury to halt climate change. So there are these dynamics to consider.
Whether or not the Democrats have the Senate is a big concern. If they don't, then what there needs to be, and organizations are doing this, is creating lists of people who are already in government. So people who have positions on independent commissions within the government that could be appointed through the Vacancies Act. At the Department of Education, some of the names being floated are Randi Weingarten of the AFT, the American Federation of Teachers. Having the head of a teachers union at the Department of Education would be significant progress.
But we don't know what is going to happen. We're not at the point where we can rest easy. But I think as people in the movement, we need to signal that we're paying intense attention to this and that we understand just how critical these positions are. Again, we need to look at things like the OMB, the Office of Management and Budget as well, sort of more boring agencies we don't pay a lot of attention to that actually are influential when we are thinking about the power of the purse.
AMY GOODMAN: In the foreword of the new book Can't Pay, Won't Pay: The Case for Economic Disobedience and Debt Abolition, you write, "If we don't get organized, debtors will keep getting pushed deeper into a financial hole. In the throes of the pandemic, some payday lenders are charging close to 800% interest on short-term loans, taking advantage of people who have no other way to keep a roof over their heads or put food on the table. Mass unemployment in the absence of a functioning safety net intensifies mass indebtedness, fueling the already vastly unequal distribution of wealth along predictable racial lines."
We are moving into the holiday week. There are people blocks long on food lines across this country. Charity groups, food groups that are giving out turkeys or any kind of food are running out of food. Unemployment numbers are going up. We are talking about millions of people about to lose their unemployment benefits. Can you talk about the whole issue of debt and what you think is possible?
ASTRA TAYLOR: Indebtedness was an absolute crisis before the COVID pandemic. I think we have to begin there. Already, household indebtedness was reaching historic proportions. The thing is that access to credit has masked stagnating wages and deepening, mind-boggling inequality. So what people have had to do, because they're not paid enough, is they've had to borrow to compensate. So in that sense, people are robbed twice. You're robbed at the workplace by being paid poverty wages, then you're forced to borrow and pay interest to make ends meet. So we have to borrow money to get an education so we can get a job. The average student borrower now has about $32,000 of debt. It goes up and up every year. People have to take out payday loans to keep a roof over their head. We know the research shows that people tend to put necessities on their credit cards. We are talking basic things like food, sustenance.
People of course are drowning in medical debt because we live in a country that lacks universal healthcare. Medical debt, as Bernie Sanders often pointed out on the campaign trail, is the number one cause of bankruptcy in this country. If you live in a country with universal healthcare, medical debt does not exist. So these are political structural problems.
So we are a country of people in debt. The vast majority, 75% of people, are in debt. Americans died—before the pandemic, Americans were dying on average with $62,000 of debt. The pandemic hits, millions of jobs evaporate and this becomes an even more urgent crisis. We know before the pandemic that people didn't have $400 for an emergency. What happens when your incomes dries up? You go deeper and deeper into debt, delinquency, default. And all of the psychological and physical consequences that come with that. We all know that debt is incredibly stressful. It's bad for our health.
So these are structural problems, and the Debt Collective, which is a union of debtors, demands structural solutions. So just like workers organize in the workplace and want higher wages, benefits, fair terms of employment, we believe debtors also have to organize. So debtors do not share an office space or a factory floor, but we can come together and organize against our creditors. That might be a private entity like the bank, or in the case of student loans, the federal government. The federal government holds the vast majority of student debt, an overwhelming amount of it, over 95%.
So we are trying to build debtor power in this moment, and underscoring the fact that in a crisis like this, the one we're living in, what we need is cash to the people, just like those unemployment benefits, the checks for $1200 that were not nearly enough. People need the money, the financial support to survive, but we need to couple that with a program of debt cancellation, of a jubilee. Otherwise, those cash payments are just going to pay people's debts.
In fact, we know that the $1200 stimulus checks that were sent to people were just basically sent to debt servicing because that's what people were doing. They were paying their debts instead of spending the money in the economy which would then provide an economic boost. And it shows that their priority is paying off their debt, that that's what they are afraid of.
So we need to couple relief programs with debt cancellation. And there are calls emanating from all over to cancel medical debt, cancel rent. And the Debt Collective has been leading the fight for the last ten years to cancel student debt. And that is now seriously on the table and being debated in Washington, and we have pushed the Biden administration to at least commit to the immediate cancellation of $10,000. We need to push them further, and we need to push them to use executive power to do so.
AMY GOODMAN: I want to talk more deeply about student debt, But first, in 2005, then Joe Biden, who, alongside most Republicans, favored the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, a bill that essentially made it more difficult to file for bankruptcy. The credit card industry, much of which is based in Biden's home state of Delaware, also supported the bill and even wrote some of the bill's key amendments. This is an exchange between Biden, who at the time was a member of the Senate Judiciary Committee, and Elizabeth Warren, who at the time was a Harvard law professor, now of course a senator.
ELIZABETH WARREN: They have squeezed enough out of these families in interest and fees and payments that never pay down the principal.
SEN. JOE BIDEN: Maybe we should talk about usury rates, then. Maybe that's what we should be talking about, not bankruptcy.
ELIZABETH WARREN: Senator, I'll be the first. Invite me.
SEN. JOE BIDEN: No, I know you will. But let's call a spade a spade! Your problem with the credit card companies is usury rates, from your position. It's not about the bankruptcy bill.
ELIZABETH WARREN: But Senator, if you're not going to fix that problem, you can't take away the last shred of protection for these families.
SEN. JOE BIDEN: I got it. Okay. Well, you're a very good professor.
AMY GOODMAN: So, Astra Taylor, if you can describe where Biden has stood—of course he was a longtime senator from Delaware, home of the credit card companies, very much seen as in bed with them—to where he is today, and what kind of concessions he has made and where you think he needs to be.
ASTRA TAYLOR: Biden's role in the student debt crisis goes way back to 1978 when he supported the Middle Income Student Assistance Act, which essentially eliminated restrictions on federal loans. So he has been very involved in expanding lending while also repealing bankruptcy protections, as that clip just pointed out. Indeed, he was the longtime senator from Delaware, the credit card capital of the world. So this is his track record. We have no illusions about who we're dealing with.
And I think that is one of the benefits of a Biden administration: nobody thinks he is a Messiah. We know who he is. The 2005 bankruptcy bill was a travesty. It was written by the credit card industries, parts of it, as you pointed out. It was actually vetoed under Clinton and then Biden fought passionately for it and it was passed under the Bush administration. So this is not an encouraging track record in many ways.
And as I said earlier, the Debt Collective was in a fight with the Obama administration, the Obama-Biden administration. We led a student debt strike that was made up of students from predatory for-profit colleges. These students had been defrauded. They had been lied to. And the Department of Education had basically supported and bailed out these predatory corporations that pretend to offer education and don't. They leave students—disproportionately working-class, black and brown, single mothers, veterans—buried in debt, unable to get the employment that they were promised. And that administration absolutely failed to use the power at its disposal to help these students. In fact, many former OBiden Department of Ed officials went immediately from that administration to working in the for-profit college sector. They just waltzed right through that revolving door.
So we have been calling on the Biden administration, along with so many of our allies in the education space, to break with this tradition. And there are some signs that under pressure, he is doing so. After Joe Biden won the Democratic nomination, he moved and finally formally embraced student debt forgiveness. Of course, we know that Bernie Sanders had a policy of full student debt cancellation. That is what the Debt Collective supports. We think every penny should be erased because those loans should not exist in the first place. We should not have to mortgage our futures simply to get an education. Senator Elizabeth Warren has been very good on this issue. She pushed quite an ambitious student debt plan and is still pushing today. So Biden has taken up some elements of that plan. He still needs to go further.
As I said, because of COVID, he has said that he will immediately cancel $10,000 of student debt. This is included in his racial equity plan. He has a long Medium post about this. The question now though is how is he going to do it, and will he do more. And we are committed to building a movement to ensure that the Biden administration cancels far more than $10,000 of student debt. Again, we believe he should cancel all of it, and that he uses an authority that the Department of Education already possesses called compromise and settlement.
The Biden administration can erase all student debt on day one. Legal research from the Debt Collective shows this is possible. Senators Warren and Schumer have embraced this legal argument. And indeed the Trump administration already used this authority to cancel interest on student loans a few months ago because of the pandemic. So we are in a very interesting moment where public pressure could really actually make a massive difference and turn Joe Biden from the person who has basically advanced the student debt crisis into the president who finally helps roll it back.
AMY GOODMAN: Astra, if we can cut across the political spectrum, and as we move into this holiday season get biblical, canceling debt obviously is not a new idea. In Deuteronomy 15, at the end of every seven years, you must cancel debts. Go back to that history of debt jubilee.
ASTRA TAYLOR: Yeah, jubilee has a long tradition. Here we can lean on the work of the late and great anthropologist David Graeber. David Graeber was a friend of mine. He brought me into the Occupy Wall Street movement and recruited me to the cause of debt resistance. In his beautiful book Debt: The First 5000 years, he talks about how in ancient societies, there were these periodic jubilees, a wiping of the slate.
Essentially, societies would become torn apart by indebtedness. People started selling themselves and their children into debt slavery. And there was a recognition that often people would be driven into debt because of circumstances that weren't their fault. Maybe it was bad crops or maybe there was warfare. And to keep society from breaking in two, and also to mitigate the power, to reduce the power of the lenders, there would be these periodic amnesties. So there was the laws of Hammurabi, very famous from 1750 BC, that says there need to be debt amnesties.
So this is not some utopian future-looking idea. This is something that has deep historical roots. And there have been critical policies of debt cancellation in the modern era. Scholars and economists who look at this period often point to Germany after World War II where the debts were wiped away so that Germany would have a chance to restart its economy, and became the economic miracle.
So part of the call for jubilee is part of this long tradition. And it's both a kind of moral argument and it says these debts are destroying people's lives. They are having disastrous social consequences. We can't afford as a society have those. But then there's a kind of practical economic thing, which is that it will actually boost the economy for everybody. Everybody will be better off if we get rid of these debts, based on the logic that debts that can't be paid won't be paid. So let's face that fact.The original content of this program is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. Please attribute legal copies of this work to democracynow.org. Some of the work(s) that this program incorporates, however, may be separately licensed. For further information or additional permissions, contact us.
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