Aug 28, 2022
Press Briefing by Press Secretary Karine Jean-Pierre 8/26/22 Transcript
Press Briefing by Press Secretary Karine Jean-Pierre 8/26/22. Read the transcript here.
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Karine Jean-Pierre: (00:00)
Karine Jean-Pierre: (00:03)
Happy Friday. We’re excited to have deputy director of the National Economic Council, Bharat Ramamurti, here with us again today to discuss the student loan announcements this week and how they will benefit working middle-class families. He’ll have about 20, 25 minutes. I know the in-town pool is going to have to leave about 1:45-ish. So he’s going to stay with us as long as possible to take as many questions as he can. Then after that, clearly you guys have to leave, and we have to also continue our day. With that, Bharat. Thank you again.
Bharat Ramamurti: (00:46)
Hey, good afternoon. Good to see you all. Before taking questions, I want to just talk a little bit more about the economic impact of the administration’s student loan plan. This plan will lift a large weight off of tens of millions of middle-class Americans, people who came, by and large, from working families and who are working class now: teachers, nurses, firefighters, police, members of the military, and more. By lifting this weight, we are not only benefiting them and their families. We are benefiting the communities that they live in and the economy as a whole.
Bharat Ramamurti: (01:16)
For example, there’s good evidence that student loan debt makes it harder for people to start new small businesses. These relief actions mean that more middle-class Americans can open more businesses in their communities, and that means more job opportunities in the years to come. Student loan debt also makes it harder for people to buy a home. These actions will mean that more middle-class Americans may be able to finally afford a down payment, buy a home in the years to come, and start building wealth that they can pass along to their kids.
Bharat Ramamurti: (01:43)
As the president has said, his core economic plan is to strengthen the middle class because that helps everyone. These actions are targeted right at America’s middle class. Nearly 90% of people receiving the relief are making under $75,000 a year. The extra money for Pell recipients helps provide additional relief to people who are more likely to have less family wealth to rely upon. When the president says that he’s committed to growing the economy from the bottom up and the middle out, he’s serious.
Bharat Ramamurti: (02:11)
That’s why, over the course of the last year and a half, we’ve been able to provide support to small businesses, support to people facing the risk of eviction or foreclosure, to people at risk of going hungry and more. It’s why the president’s infrastructure bill is focused on creating hundreds of thousands of good paying jobs, nearly 90% of which won’t require a college degree. It’s the reason why our economy has roared back and the unemployment rate now stands at a historic low even as the economies of other leading countries are faltering. So this plan is working, and the student loan relief is the next part in it.
Bharat Ramamurti: (02:43)
With that, I also want to address an issue that I know has been coming up recently, which is the cost of this proposal. Our estimate is that the debt relief proposal will reduce average annual receipts in the student loan program by about $24 billion a year over the next 10 years. So the way to think about this is that, because we are providing debt relief, reducing the outstanding balance for some people, eliminating it for other people, that means we’re not going to be collecting certain amount of payments that we otherwise would’ve been collecting. That totals about $24 billion a year on average over the next 10 years.
Bharat Ramamurti: (03:16)
Let’s put that $24 billion in context. That represents 1.5% of the deficit reduction that we are projecting for this fiscal year before the announcement, and it is far less than the $350 billion plus that we’ve already done in PPP loan forgiveness since last July. Now, consistent with longstanding budget practices and consistent with the comments that I made on Wednesday here, the official budgetary score will be produced by the Education Department and the Office of Management and Budget in the coming weeks. Actually, the Office of Management and Budget is going to be putting out more detail on this process and how it’s slightly different than the preliminary estimate that I provided later today. So with that, happy to take questions.
Karine Jean-Pierre: (04:00)
All right, guys, we’re going to take as many as possible.
Morning. My first question is, thanks for the number, why was this number that we didn’t have the past couple days? Then this modeling is based off of, you said, 75% of people taking advantage of the program. If 25% of people aren’t taking advantage of the program, do you consider that a flaw in the program? Would you consider the program a success with that number, if you can talk through this?
Bharat Ramamurti: (04:24)
Look, we have to make an assumption about how many people take advantage of the program in order to provide this preliminary estimate. The reason that we chose 75% is that it’s, broadly speaking, in line with the take-up rate of the most similar Education Department initiative that we could find. In other words, there was another Education Department initiative in the past that was supposed to provide targeted debt relief to a set of borrowers who were eligible for it, and roughly 75% of the borrowers in that particular program took advantage of it. Now, we are hoping to get as close to 100% as possible. But for the purposes of putting out a preliminary estimate on this, we had to choose a number, and we felt like 75% was the most defensible. As for why you’re getting it today, you guys asked us for it, so we’re providing you with information.
Karine Jean-Pierre: (05:08)
[inaudible 00:05:08]. The way you’re explaining how this is being paid for, you just went through this, it’s $24 billion per year. But there was a bit of a… We’re trying to get, are you still considering this self-paid for? Because mitigation and compensating it in other ways, they’re not necessarily having internal pays for this bill. So are you still phrasing this as it pays for itself, or are you phrasing it in a different way?
Bharat Ramamurti: (05:35)
What I would say is that, yes, this is paid for. It is paid for and far more by the amount of deficit reduction that we’re already on track for this year. Like I said, we’re on track for $1.7 trillion in deficit reduction this year. That means, practically speaking, compared to the previous year, $1.7 trillion more dollars are coming into the Treasury than are going out, and we’re using a portion of that, a very small portion of it to provide relief to middle-class families consistent with the president’s plan. So, yes, we consider it fully paid for.
Peter Alexander: (06:05)
Bharat, thanks for doing this. The median household income in this country right now is roughly $67,000, which means that this is going to go for those up to $125,000. Those individuals are already making individually almost twice the median household income in this country. What do you say to those critics who say you’re not just helping the middle class? Though, I understand 90% will be making under 75,000. You’re still helping what is a smaller percentage, but a significant percentage of individuals who most Americans would view as making a lot of money.
Bharat Ramamurti: (06:33)
Look, as you noted, nearly 90% of the benefits go to people making under $75,000 a year. Our view is that the folks that you mentioned under $125,000, they are middle-class families, and I think that they widely be considered as such. Look, I want to be totally clear about this point.
Peter Alexander: (06:54)
$125,000 or $250,000, would you view that as a middle-class family, a family that makes under $250,000?
Bharat Ramamurti: (06:59)
Absolutely. Look, the key cutoff here is that nobody in the top 5%, whether they’re an individual income or household income is going to get a dollar. Look, it’s extremely consistent with what the president has said on the tax side. Now, on the tax side, he said that nobody making under $400,000 a year should face a tax increase. So the economic story of this country over the last couple of decades, if we’re going to look at it, is that there’s been a relatively small sliver of folks who have done extremely well, the top 1%, top 5% or so. Our goal was to make sure that people below that, the bottom 95%, get a little bit more relief, get a little bit more breathing room. That’s exactly what this policy does, but, by the way, targeted even more narrowly than that primarily overwhelmingly to people making under $75,000 a year.
Peter Alexander: (07:48)
To follow up, if I can quickly, the White House yesterday was pretty vocal on Twitter, which it isn’t always, criticizing some of the critics of this program, Marjorie Taylor Greene, Matt Gaetz, among them, saying how much money they received in PPP loans in the past. I think you would agree that there is a difference between a loan program as it existed, which was the PPP program that was conceived to be forgivable, assuming you spent a majority, I think 80%, on the payroll, as opposed to these loans, which were for individuals with expectation when they made money, they’d be paying it back. Is that a fair comparison and why?
Bharat Ramamurti: (08:23)
Yeah, we absolutely think it’s a fair comparison, and here’s why. Since last July, we have forgiven, under the statutory terms of the PPP program, more than $350 billion worth of loans. Those are loans that the government has forgiven, turned into grants, and those are loans, by the way, of up to $10 million per business owner. Now look, we believe that providing support to small businesses is the right thing to do. We didn’t design PPP. Maybe would we would’ve designed it a little bit differently if we were in charge. But broadly speaking, providing support to small business is a priority of the president. Look, has any Republican in the last year stood up and said, “Inflation is really high. You guys should stop providing this loan forgiveness to PPP recipients. You should slow it down, or you should change the rules because it’s unfair that these people should get up to $10 million in grants”? No, in fact, it’s the opposite. The pressure that we’ve gotten from Republicans on the Hill has consistently been, “Do this faster. Make it easier for people to get forgiveness.” So our view is, why is there a double standard here? Why is it, from the perspective of Republicans, great to forgive a loan of up to $10 million to a business owner, but if we want to provide $10,000 or $20,000 in loan relief to a teacher or a bus driver or a nurse, all of a sudden it’s socialism? That’s what doesn’t compute from our view. We don’t think that’s consistent.
Karine Jean-Pierre: (09:50)
Speaker 1: (09:51)
Thanks. I was wondering if we could talk about the $24 billion number because it’s a little different when you guys canceled the ITT or Corinthian were given a lump sum of the total amount. So I’m wondering if it is fair to extrapolate this, to say that you believe $240 billion in loans will be canceled. If not, what are the underlying assumptions that get us to the 24? Are you assuming economic growth that will offset some of it? Are you cutting out folks who would’ve defaulted on their loans but wouldn’t repay? I think it doesn’t include the other Education Department rules that would’ve been included. Can you just get us to that number and if there is a top line number?
Bharat Ramamurti: (10:36)
Look, this is a cash flow estimate, which basically says there’s a subsection of borrowers who are going to get relief with this proposal. We estimate that 75% of them are going to take advantage of the relief that they’re offered. If that debt is canceled, that means that if they were scheduled to make $400 worth of payments a year for the next 10 years, that cash flow is no longer going to come in to the government. It’s that straightforward.
Bharat Ramamurti: (11:05)
Now, as the OMB item that’s going to come out later is going to describe, there’s some really key differences between what we are doing, which is a preliminary estimate, and the more complicated and, frankly, more precise score that is required by federal law. To give you a few examples, number one, under federal law to do a budget estimate of this, you have to take the net present value of all of the payments that are foregone. That estimate is going to look at some really important technical implementation decisions that the Department of Education is going to have to make. For example, if you’re a borrower and you have multiple loans over $10,000, well, if you get $10,000 in relief, which of these loans is going to get canceled? It matters for the cash flow. That’s the more sophisticated drilling down type of analysis that’s going to happen as part of that process consistent with budget scoring. But in an effort to provide you all with more information and the ballpark, that’s what we’re doing here.
Speaker 1: (12:08)
Just because I have you right now, and Jay Powell spoke earlier today, he said that the Fed was likely going to continue to pursue interest rate hikes, but that it could result in pain in both a slower economy and job losses. Obviously, inflation is a major concern, and that’s what the Fed is looking at here. But the president has not only said that the Fed is independent, but it has sort of endorsed their vision. If their vision results in job losses and an economic slowdown, has the president’s opinion of that changed in any way?
Bharat Ramamurti: (12:41)
Well, I’m not going to answer that hypothetical. I will say that we have great respect for the independence of the Federal Reserve. I’m not going to comment directly on Chair Powell’s comments. But there’s been a lot of good data released about the economy, including this morning, that, to us, gives us a lot of hope about the future trajectory of where things are going and how middle-class families are going to be doing.
Bharat Ramamurti: (13:03)
For example, PCE, which is a measure of inflation, came out this morning. In fact, it’s the one that the Federal Reserve prefers to the CPI. What PCE said is that prices fell last year, 0.1%, and at the same time, income’s increased. So that tells a good story about the state of the economy. The University of Michigan put out its Consumer Sentiment survey this morning. Consumer sentiment is up quite a bit over the last month, and consumer’s inflation expectations are down. Again, all good signs there.
Bharat Ramamurti: (13:35)
Of course, if you look back to some of the data releases a little bit earlier. For July, we had 528,000 new jobs. CPI, which came out in July, that was flat, so no price increases in July. Of course, everyone’s favorite measure of the economy, gas prices are down over a dollar since their peak. So a lot of good news in the economy. We’re going to let the Fed do its work. Our focus here is to support households, keep our eye on the ball on inflation, and hopefully come out the other side with steady and stable growth, which is what the president has said is his goal.
Karine Jean-Pierre: (14:09)
Go ahead, Matt. And I’ll come to the back, too.
I had two technical questions, but thankfully you’re here to answer some technical questions. The first is you guys have argued about the $1.0 trillion in deficit reduction. It sounds like it’s hard to get to a $240 billion figure over 10 years with this new estimate. Is it fair to say that $1.7 trillion becomes $1.5 trillion, or it becomes a lower figure given that it’s not paid for it? Is that a fair way for us to think about what you guys are doing?
Bharat Ramamurti: (14:41)
Yeah. That’s a fair way of thinking about it. Another way of thinking about it is that we go from the single largest deficit reduction in the history of this country to the single largest deficit reduction in the history of this country.
The second question is about when you guys have estimates, you’ve argued that this is potentially a deflationary move. Do you have any estimates in terms of how much money will start to come in come January and how much money is going to be not coming in, and to articulate a little bit more of how you guys are arriving at that conclusion?
Bharat Ramamurti: (15:16)
We’ve looked at those numbers, and they informed our view that we put out on Wednesday. We view that the impact of restarting payments and providing relief are largely going to offset each other. Now, again, as we’ve covered, there are different assumptions that go into figuring out how exactly how much is that going to mean. But in our mind, with a pretty broad range of assumptions, they’re going to largely offset. There have been a host of independent experts who have said the same thing. In fact, Goldman Sachs put out an analysis of this proposal. They said quite clearly that they felt that restarting payments and providing targeted relief would actually be dis-inflationary. In other words, more money would be coming into the government than going out in the short term, which would help further-
Bharat Ramamurti: (16:02)
… going out in the short term, which would help further our efforts to bring down inflation.
But, I guess, if you guys are saying 24 billion is the estimate for what won’t come in per year, is there an estimate for next year, once you kick on, once people start paying? Is it 30 billion is coming in, 24 billion is not?
Bharat Ramamurti: (16:20)
Sure. One way to think about it is this. So we’ve had a student loan pause in place now for over two years. No federal borrowers were being required to make any payments. People are voluntarily making payments. So we’re actually collecting, roughly speaking, $2 billion a month in payments, voluntarily.
Bharat Ramamurti: (16:38)
Under normal times, so pre-pause, we were collecting about $6 billion in payments a month from student loan borrowers. So the difference between those two is $4 billion. If we turn the loans back on without making any other changes, because things have changed in the world in the last two years, roughly speaking, we would expect to collect about $4 billion a month in addition to what we’re collecting right now, so, roughly speaking, $48 billion coming into the government that wouldn’t have been coming in before.
Bharat Ramamurti: (17:07)
As you can sort of piece together, if the average annual cost of this is $24 billion, that means that, on net, about $20 to $24 billion is coming into the government even after we do the relief. Now, again, there’s some play in those numbers, but I just want to give you a general sense of how we’re doing the math there.
Speaker 2: (17:28)
Speaker 3: (17:29)
Two brass tacks questions for people that are trying to navigate this still. We got this new information today that the form is going to be available for folks who think they’re eligible in mid-October. It’s going to take about four to six weeks for that to be processed. So can you guys guarantee to folks that, if they are on time and they put in their application in mid-October, they will definitely see their balance shrink the appropriate amount before repayments have to be due again?
Speaker 3: (17:51)
And then, just another question, too. So a lot of confusion. If you recently zeroed out your balance in the last few months, can you request a refund and then still apply to get some of this forgiveness?
Bharat Ramamurti: (18:03)
Great. All right. On your first question, let me just provide a little bit of detail, because I want to make sure that people get the full story here. So the application will be available by early October. In the meantime, borrowers can go to studentaid.gov, which has been up now for the last 48 hours. They can provide their email address so they can get notified when that application goes live.
Bharat Ramamurti: (18:23)
Once the borrower completes the application, they can expect relief within four to six weeks. So borrowers are advised to apply by roughly November 15th in order to receive relief before the payment pause expires on December 31st. And of course, the Department of Education will continue to process applications as they’re received, even after the pause expires on December 31st.
Bharat Ramamurti: (18:48)
One more point here, which is that we encourage everyone who thinks that they’re eligible to go to the website and go to the application when it’s available and fill it out. But, as we noted during the announcement, there’s actually 8 million people, 8 million borrowers… that’s about 20% of the borrowers… for whom the Education Department already has data about their income on file. And if those people qualify based on the income on file, they’ll actually get relief automatically. So I would refer you to the Education Department for any other questions about that. And your question about refunds? I would refer you to them
Speaker 3: (19:22)
If they apply right when the application’s available, they should be good to go before December 31st?
Bharat Ramamurti: (19:27)
Yes. Four to six weeks after they submit the application. So, yes. In our view, if you submit by early to mid-November, you should get your relief before the restart happens at the end of December.
Speaker 2: (19:36)
Speaker 4: (19:37)
Thanks. I wanted to ask for a second about the legal justification for this program. You’re using a 2003 law to justify why COVID’s a national emergency and why student relief or debt relief is needed. What’s your response to critics that say that’s a stretch in the law? And do you plan or does different agencies that are involved here plan to put out more legal justification for why this is okay?
Bharat Ramamurti: (20:04)
Well, look. Again, I’m not a lawyer, so I don’t want to get into too much of the legal nitty gritty here. But what I can tell you is that both the Department of Justice office of legal counsel and the general counsel’s office of the Department of Education have looked at the text of the statute and believe that the action that the secretary took and that the administration took here is legally justified. There’s more detail available in some of the memos that they’ve written. And I would recommend that you talk to them about it.
Bharat Ramamurti: (20:32)
But the president was clear, from the beginning, that he did not want to move forward on this unless it was clear that it was legally available to him. And one of the first things that he did when he came to office was ask for that legal opinion and got the answer that, yes, options were available to him that were legally permissible under that law.
Bharat Ramamurti: (20:55)
It’s worth noting, by the way, that law that you’re talking about is the exact same legal authority that the Secretary of Education has been using since 2020 to impose a pause on student loan payments for 45 million borrowers. That has not been challenged in court. It has not been found improper by a court. It’s the same statute that the previous administration used and that we have used that we are now using for this action.
Speaker 4: (21:17)
I also wanted to ask. You, as an administration, have taken existing statutes and… I don’t know if “stretch” is the right word, but you did it with the eviction moratorium. You did it with vaccines. And we’ve seen courts push back. In this case, you have people who are really excited and really making plans with this money that they think they’re going to save. And what’s your response to them? Are you preparing for a legal challenge? What’s your response when people are reading that there could be legal uncertainty to your position?
Bharat Ramamurti: (21:47)
Yeah. Well, what we can say is that we believe we are on strong legal ground in taking this action. Of course, people can challenge actions in court. It happens all the time. It happens to this administration. It’s happened to every administration in history. It’s going to be up to the courts to decide whether those are valid claims or not. But we believe that we’re on very strong legal ground.
Speaker 4: (22:06)
Speaker 2: (22:06)
Miles, and then we’ll come [inaudible 00:22:08].
A follow-up to that. If a judge somewhere were to attempt to put a stay on the implementation of the student debt relief, would the payments still resume in January? So, the other side of the coin. If the student debt relief were to be stopped by a court, would the other side of it, the payments, still resume?
Bharat Ramamurti: (22:33)
I’m not in the position to answer that hypothetical right now, but it’s a good question.
Speaker 2: (22:36)
Thank you. I wanted to just go back to the comparison between this and the PPP loans because what Republicans and critics are saying is that there’s a difference between those decisions being voted on by Congress and those loans that turned into grants being, by and large, to cover businesses that were shut down by the government involuntarily because of a natural disaster versus students who willfully took out their loans and are now unable, for whatever reason, to repay them. There is a difference there.
Bharat Ramamurti: (23:14)
Well, I would say there both actions are based on laws that Congress passed. We are implementing a law that Congress passed… actually, a Republican Congress and Republican president in 2003… the Heroes Act. And again, that’s the exact same legal authority that the previous administration used to put a pause on student loan payments. That’s the authority that we are using in this instance. So we are acting consistent with the law.
Bharat Ramamurti: (23:38)
Look, to go back to my earlier point, we’re not against PPP. We’re supportive of the idea that small businesses should get relief. The point is that, over the past year, we have been forgiving hundreds of billions of dollars’ worth of loans to business owners. Remember, that program was stood up very quickly. Money went out the door quickly.
Bharat Ramamurti: (23:59)
And Congress could have come back at any time and said we should look a little bit more carefully at these loans. Maybe we shouldn’t be providing forgiveness to people if they clearly did extraordinarily well during the pandemic. Remember, these are really low-interest loans. Maybe we should just make them pay back their loan at a low interest rate rather than forgiving it.
Bharat Ramamurti: (24:16)
None of that happened. We didn’t hear from a single Republican pushing for any of that. Everyone was on board with forgiving up to $10 million in loans. And so, all we’re saying is that it’s hard to credit those same people who are highly supportive of that program and that amount of debt forgiveness, turning around and saying that forgiving a fraction of that amount for working people, not business owners, but working people, somehow that crosses the line over into socialism. That’s not how we view it.
Okay. What’s the difference though, between… How are you justifying using a 2003 law that was designed to help military families for this purpose, where you’re now helping bail out people who took out loans and cannot pay them? Do you view people who can’t pay their debt as heroes like those who are in our armed services and were fighting after 9/11?
Bharat Ramamurti: (25:13)
Yeah. Look, I think, as the president has said, there is a real problem here with the burden that student loan debt places on people from low-income and middle-income families. We used to have a system where a Pell Grant, which is federal support to low-income families, used to cover 80% of the cost of going to a four-year public college. And as of today, it covers 33% of the cost. So what are people supposed to do? They want to get a degree. They’re being told that’s the right thing to do. They think it’s going to help them.
Why not go to the universities? Why not fill in something to make sure that borrowing, moving forward, is limited or that universities don’t just ratchet up the cost?
Bharat Ramamurti: (25:46)
Sure. Yeah. I’m glad that you brought that up because I want to address it. Remember, the president put out a three-part plan on this, and the third part of it was accountability for colleges. It detailed a few things. Number one, unlike the previous administration, which loosened the reins on colleges and universities, rolled back rules that were intended to hold them accountable for raising costs, this president and this administration re-instituted an enforcement office at the Department of Education that goes after these types of colleges.
Bharat Ramamurti: (26:14)
It kicked out an accreditor, which is a private company that basically says that this institution, this college, is good enough, so they should get federal loans. This accreditor allowed colleges like ITT and Corinthian to get access to federal loans, and then those colleges defrauded people, defrauded students. So this administration responded by kicking that accreditor out of the program. They’re not going to be able to accredit colleges anymore.
Bharat Ramamurti: (26:42)
I would note that a central element of the president’s community college plan was accountability so that neither colleges or states that took that money could raise prices on students unfairly. So, all of that said, I think that we believe that the Department should have even more authority to go after bad actors and to hold colleges accountable. And we’re eager to work with Congress to advance any proposals along those lines.
Speaker 2: (27:05)
Okay. And then [inaudible 00:27:07].
Speaker 5: (27:07)
I guess I wanted to ask… I know the president, last month, when he made remarks about the Inflation Reduction Act, really highlighted the fact that it would reduce the deficit. And if a larger percentage of the student borrowers end up availing themselves of this program, it would cost 320 billion, if you had a 100% uptake, essentially, over 10 years. And that’s the goal. So, I guess, can you acknowledge that some people would feel disappointed that this could basically wipe out the savings from that law?
Bharat Ramamurti: (27:36)
Yeah. I’m glad you asked about that because I think that there’s a nuance here that’s important to understanding why that doesn’t quite work. So, when the budgetary score comes out for this proposal, like I talked about… we’re going to get a little wonky for a second here… what it’s going to do is say that all the loans that are being modified or eliminated, here, we have to look over the lifetime of that loan and figure out how many dollars are we not collecting because of that modification.
Bharat Ramamurti: (28:09)
And so, as you know, many, many loans, the repayment lasts over 10 years. People are repaying for 20, 25 years in instances. So, really, that score is going to reflect the cost over a much longer time horizon than your standard 10-year budget window. As a result in our view, the thing that we should compare that score to is not just the first 10 years of the Inflation Reduction Act. It’s at least the first two decades of it and maybe the lifetime impact of that. And if you look at outside analyses of the long-term impact of the Inflation Reduction Act, they find that it would reduce the deficit by trillion dollars over the next two decades. So in our view, that is the relevant point of comparison on that.
Speaker 2: (28:52)
MJ, are you… yeah.
I wanted to ask you about the updated Penn Wharton estimate, which says just the debt cancellation piece alone would cost up to $519 billion over 10 years. And then, the total plan would cost upwards of $1 trillion. Obviously, there is a significant gap between the 24 billion per year that you’re citing, or 240 billion over 10 years. Just wanted to give you the chance to walk us through why we might see that different in the two models.
Bharat Ramamurti: (29:23)
Sure. I know it just came out today, and I didn’t have too much time to look carefully into it, but I got a chance to skim it. My view is that there’s a couple of things. Right off the top, getting to that trillion dollars, they have a massive range on estimating the impact of our reforms to the Income-based repayment plan. They say that their baseline estimate is that it costs about $70 billion. But then, they say it could cost $450 billion more than that, if you make certain assumptions. In our view, you can lop off that 450 billion right there because it seems to be somewhat speculative and clearly the top end of the range.
Bharat Ramamurti: (30:03)
Beyond that, the debt relief analysis doesn’t do a few things. Number one, it doesn’t account for the fact that it assumes 100% of people will take it up. In our mind, that’s not necessarily a reasonable assumption. Look, estimating the cost of forgiving certain debt is more complicated than just looking at the face value of the debt that’s being canceled. So I gave the example, I was here last time, that… Let’s say you canceled debt for somebody who’s been in default for more than seven years. There’s actually millions of borrowers in that position. If the face value of their debt is $10,000 and you cancel it, it’s not reasonable to say that the cost of that is $10,000 because you were sitting here, collecting $0 on that loan, year after year after year.
Bharat Ramamurti: (30:47)
So some of those elements are also going to affect the score. The Education Department has the best data on it. It has all of the data about who repays, what to expect about repayment horizons and payment rates, how this interacts with the existing income-based repayment program, and all of that. So we feel confident in our numbers.
Just one follow-up. Given that the upwards of $1 trillion that they are estimating, that obviously is a number that’s a lot closer to the 1.7 trillion in deficit reduction that you all have been citing. So I’m just curious. The total cost that this plan would amount to, was that a factor when the president and all of you were deciding what the total amount of forgiveness should be? Or was the forgiveness amount… Did you get there, regardless of the cost, and then you sort of figured out what the general cost would be after?
Bharat Ramamurti: (31:42)
Yeah. I want to make totally clear that we don’t think that $1 trillion is anywhere in the ballpark of what this is going to cost. Number two. Yes, the president was quite focused on what the… At least, a good estimate of what the cost of this proposal was going to be was a big factor in his decision. He was looking into and thinking about how that would compare versus the deficit-
Bharat Ramamurti: (32:03)
… to and thinking about how that would compare versus the deficit reduction that he had been able to secure over the last year, last two years, frankly, of his presidency. Remember in the first year of his presidency, he brought down the deficit by $350 billion. So it was a factor. We provided him with estimates along the lines of what we provided you. And that did play a role in thinking through how to design the policy.
Speaker 6: (32:24)
Was there a percentage that he was determined not to cross?
Bharat Ramamurti: (32:27)
Not that I recall.
Karine Jean-Pierre: (32:30)
Okay. Just like two more.
Speaker 7: (32:30)
For students who are about to take out new loans, what should the message to them be about whether their loans could be forgiven in their future? And does the White House have an obligation to emphasize that this could very well be a one time thing so they’re not taking out additional loans.
Bharat Ramamurti: (32:42)
I would say two things. Number one, this is going to be a one time thing in terms of the blanket relief. This is an authority that is conditional on an emergency, as I said, and the president believes that this relief is warranted in this instance coming out of the pandemic and as we transition back into repayment. It is not the kind of authority that you can use over and over again.
Bharat Ramamurti: (33:03)
But what I would say to that student is that these income based repayment reforms that are also part of this proposal are designed to help people who go to school and then end up having lower income, middle income jobs going forward. Remember we had some examples in the fact sheet that we put out alongside the proposal showing that, for example, somebody making 30 or $40,000 a year after they have some debt, the income based repayment reforms represent a savings of 1,000 $1,500 a year or more depending on their exact circumstances. It was really important to the president that this package of proposals not just be relief for current borrowers, it’s a reform to the system so that future borrowers also get more manageable debt loads going forward.
Karine Jean-Pierre: (33:49)
Okay. I think the pool, the in town pool has to gather, so if folks need to go, feel free. I’ll stay a little bit longer. Okay. Go ahead. You’re being very…
Speaker 8: (33:57)
I’ll just ask my question. Many comparisons have made from the American system to foreign governments where higher education is government funded, taxpayer funded at no cost to the student.
Bharat Ramamurti: (34:10)
Speaker 8: (34:10)
How did foreign systems inform the decision for loan forgiveness? And is there any economic data we can glean from those countries that we might see as a result of the loan forgiveness decision?
Bharat Ramamurti: (34:20)
Yeah, as we’ve talked about, part of the reason that we’re in this position, part of the reason why the cost of college, even after accounting for inflation has tripled in the last 40 years since 1980, part of it is that there has been a significant amount of disinvestment, especially at the state level. States used to put more money into funding public education, public higher education in their states, and that helped keep tuition down, especially for in-state students.
Bharat Ramamurti: (34:46)
What we’ve seen in recent decades is pulling back on that and basically shifting the burden onto students who come from lower income and middle income families. And as I noted, the federal government hasn’t done enough to step in and fill that void and the value of the Pell grant has deteriorated from 80% to 33%. So what the president has called for, as you know, is a series of increased federal investment that would make it easier for folks from lower income and middle income families to go to college doubling the Pell grant. Right now, the Pell grant’s about $6,500 a year. He wants to double it to $13,000 a year. That represents a significant amount of relief for people from lower income, middle income families. And as I talked about, he’s also pushing to make community college free.
Karine Jean-Pierre: (35:29)
All right. Got to wrap it up. I’ll stay a little longer for folks and take some questions.
Bharat Ramamurti: (35:34)
Karine Jean-Pierre: (35:34)
Thank you so much. That was very helpful. Thank you. Good to have you. Okay, so I’ll stay a little bit longer and take some questions for folks who are still here. Okay, just a topper for you and this is something that [inaudible 00:35:51] already alluded to talked about, which is the PCE. While there is more work to do to bring prices down, we received several pieces of encouraging economic news today from PCE.
Karine Jean-Pierre: (36:03)
The new data on the personal consumption expenditures, what economists call again, PCE, show that in July incomes went up while prices went down. So based on this measure, inflation went down in July. This was largely driven by the fastest decline in gas prices in a decade. The national average is now down to $3.87 per gallon. The American people are starting to get some relief from high prices and that’s underscored by new data that shows consumer sentiment is up 13% since July. And one year expenditures of inflation dropped by nearly a half a percentage point. That’s encouraging news as well. The president’s number one economic priority is lowering cost while sustaining our historic economic recovery. The recently signed CHIPS Act and Inflation Reduction Act will do just that.
Karine Jean-Pierre: (37:01)
Once again, we have more work to do, as we have said over and over again. We continue to face real global challenges and we are always careful to not read too much into any one month’s data. But what we saw today is encouraging evidence that we are on the right course and we are making progress. Aamer.
Does the president believe it was appropriate for the former president to have classified information unsecured in his home?
Karine Jean-Pierre: (37:33)
So as it relates to, and I understand why folks have an interest in this, we totally get that. But as it relates to any comments on anything related to this independent investigation, even any underlying materials, we feel that it is not appropriate for us to comment on this. This is an independent investigation that the Department of Justice is leading. That’s something that the president finds is an important thing to do, for the Department of Justice to have that independence. We’re just not going to comment.
The president yesterday suggested that the Republican ideology is gearing towards semi-fascism. Could you just clarify what exactly does the president mean by that? And secondly, the president also said he respects conservative Republicans, but he does not respect the MAGA Republicans. More than 70 million Americans voted for Trump in 2020, does he not respect those voters?
Karine Jean-Pierre: (38:36)
No. That’s not what he said. I think he was pretty clear and he was very powerful last night. Look, what the president said last night was that when it comes to MAGA Republicans, when it comes to the extreme ultra wing of Republicans, they are attacking democracy. They are taking away rights and freedoms. They are using threats of violence. They are taking away voting rights. And he called it what it is. That’s what he did. He called it what it is and what many, we would argue, historians would agree with us on.
Karine Jean-Pierre: (39:11)
And so what Joe Biden believes as president, he should, and president should be the strongest voice for democracy. And so he was making that very clear. He was making that contrast to what congressional Democrats have been doing, which is fighting for our rights, fighting for freedom, delivering on an economy that is historic, 10 million jobs that have been created, lowering healthcare, lowering prescription drugs, and making sure that we take on those special interest groups. And we saw just a couple weeks ago that we won.
Karine Jean-Pierre: (39:46)
So he is making that contrast, trying to make that very clear of what we are seeing today. And so he was passionate about this. He was eloquent about this. And he also, when it comes to what you’re asking me about Republicans who are conservative, clearly he said that he believed there are traditional conservative Republicans. He was very clear on that. He specifically called out and mentioned Maryland Governor Larry Hogan as one of them.
Karine Jean-Pierre: (40:14)
But we have to really make sure that we make it clear that there’s a choice in front of the American people. And we have to make sure that we make it loud and clear that when it comes to MAGA Republicans, we call that out and that’s what he did and what they’re doing, what they’re doing in attacking our democracy. And so he wanted to be clear on that and he made that contrast. And that’s what you heard from the president. Go ahead.
Speaker 9: (40:44)
Has the White House made any changes in light of the revelations of the former president’s handling of classified material to its own processes or training procedures for handling protected and secret information?
Karine Jean-Pierre: (40:58)
I don’t have anything to share with you. Again, we are just going to be really mindful. I know I get the question that you’re asking. We’re just not going to share any change of processes. We’re not going to share any information, anything that’s related to this, any content, any underlying materials to the investigation that the Department of Justice is doing. Again, an independent investigation. We’re just not going to comment at this time.
Speaker 9: (41:23)
Just to hop back to loan forgiveness for a second. NPRs done a lot of reporting on administrative processing failures that the Department of Education for these loan programs, these are kind of lapses in income based repayment and profession based repayment that Secretary Cardona has acknowledged. Is the administration concerned at all about similar issues for the coming loan forgiveness program or ways that it might give up the… Leave borrowers in the lurch?
Karine Jean-Pierre: (41:51)
So look, you just mentioned Secretary Cardona has been really clear about the previous loan forgiveness programs, other programs that have been before him and in his agency. Look, we take this very seriously. We believe that this is an important plan that’s going to give relief again, to up to 43 million Americans. It’s a very targeted plan that’s going to give relief to 90% of Americans that are making less than $75,000 a year. That is important.
Karine Jean-Pierre: (42:22)
This is a campaign promise that the president made and kept. And he went beyond not just a 10,000, but up to 20,000. We’re going to do everything that we can to make sure that that gets delivered. But of course, we’re going to hear from folks and see if they’ll take us up on it. Again, this is an important plan that is historic. We have not seen any president do this before. And we’re going to do everything that we can. Of course, Secretary Cardona is going to do everything he can with his team to get this done. Go ahead, April.
Karine, this Sunday will be the 59th anniversary of the March on Washington. And how is this White House, how is this president marking that moment, particularly as he decided to run for office because of the massacre in Charlottesville, as he walked in talking about equity and equality.
Karine Jean-Pierre: (43:22)
Let me first say a couple of things because is it is an important day and I want to give it the due as you’re asking me this question. You’re right. When the president and so many Americans saw what was happening not too long ago back in 2017, in August of 2017, and we saw what was happening in Charlottesville, that moved him. What we saw the hatred that we saw there, that moved him and that moved so many of us, and he actually wrote an op-ed talking about what he thought that meant for this country and how sad and devastating it is, it was to see that type of behavior, that type of hatred and that type of sentiment that was very public and also someone lost their life.
Karine Jean-Pierre: (44:13)
I want to make sure that we don’t forget that day as well, or that weekend as well. And when the president came into office, he took that when talking about racial, dealing with racial equity, he took that very seriously. And you see that across the agency. He signed an executive order talking about how he wanted to make sure that there was racial equity within the agencies across the federal government. And you’ve seen him do that. And Susan Rice, as you know, you know the ambassadors leading that effort with her department and dealing with the different agencies and making sure that we deal with racial inequities even here in the agencies.
Karine Jean-Pierre: (45:02)
As it relates to March on Washington and that anniversary, the president has said this before, and I’ll reiterate. “The March on Washington and Dr. Martin Luther King Jr’s I Have a Dream speech changed the course of history. We continue to reaffirm our commitment to fulfilling America’s founding promise.” And the president has made advancing equality core to his administration as I just laid out. We can’t rest until justice truly rings out for all of us. I don’t have anything specific on what the president’s going to be doing on this, but we will share if we have anything more.
And there was a missed opportunity if you will, civil rights leaders wanted to mark the anniversary Sunday by having a meeting with the president this week. Could you talk about that? Is there effort to try to have this meeting happen soon? Was it a missed opportunity, et cetera?
Karine Jean-Pierre: (45:56)
I’ll say this, I don’t have a meeting to read out or speak to at this time, but we have stayed in regular touch with civil rights leaders. You know this April. I think you’ve reported on the many meetings that this administration has had with civil rights leader. We are in close touch with them. The president has a very good relationship with many of those leaders. And so we find those relationships important that we will continue to grow. Again, I don’t have a meeting or anything to lay out, but again, we’re in regular touch with members of that community.
And lastly, is equity still one of the major crux, one of the major pillars of this administration? Years in, is this still one of the fundamental pieces of this administration?
Karine Jean-Pierre: (46:45)
Oh, it is. It is. I’ll just remind you when the president walked into this administration, I’ve said this many times before at the podium, he laid out the different crises that were before him. When he came in racial equity was one of them and saying that we needed to do everything that we can to deal with that crisis in a real way. And he has taken those actions, as TheGrio has reported on, as many of you in this room has reported on what the steps that he has taken. That doesn’t stop with the executive order. It also is actions that we’re going to continue to take within the White House as well.
Karine Jean-Pierre: (47:25)
Okay. I’m going to come back because I didn’t take your question.
In New York and DC, mayors have said the federal government isn’t doing enough to help with migrants who are being sent by bus to their cities. Does the administration have plans to do anything more on this?
Karine Jean-Pierre: (47:41)
The administration has been in regular touch with Mayor Bowser, clearly the mayor of DC and Mayor Adams, Mayor of New York city, and FEMA regional administrators have been meeting with both mayors on site to coordinate available federal support from FEMA and other federal agencies. Funding is also available through FEMA’s emergency food.
Karine Jean-Pierre: (48:03)
Funding is also available through FEMA’s emergency food and shelter program, to eligible local governments and non-for-profit organizations upon request, to support humanitarian relief for migrants, as we have done many times in response to Governor Abbott’s repeated attempts to create chaos, and really, to create chaos and confusion. That’s what he’s doing at the border, and costing his own constituents over well over $1,000,000. We will work to manage the consequences of this latest political charade that we see from the governor, and we do take this very seriously, and will continue going to work with Mayor Bowser and Mayor Adams. I will point you to a statement that FEMA put out earlier this week, laying out the steps that they have taken, and what they’re doing to provide assistance. I’m just going to call folks I haven’t called on.
Thanks Karine. Just to get something on record, does the White House have any response to the release of the search warrant affidavit for Mar-a-Lago?
Karine Jean-Pierre: (49:04)
I’m just going to say what I just told this young man a few minutes ago. Again, we understand the interest in this. We are not going to comment on any underlying materials, any content that is related to an ongoing investigation. This is an independent investigation, legal investigation that the Department of Justice has the independence to conduct, and we do not feel it is appropriate for us to comment.
Briefly on student loans, does the White House believe that federal student loans play any role in the increase in cost of college? Since students are able to take on more debt that they don’t have to pay off right away, does that allow colleges to increase their costs maybe more than they might?
Karine Jean-Pierre: (49:53)
I’ve gotten this question in the past, not in the past, it’s just been a couple days of this week. One of the things, and I think Barat talked about this a little bit, because there’s been questions about, is this going to raise the tuition by doing this from colleges? Look, this is something that the Secretary of Education, Secretary Cardona, has said in interviews that he’ll be monitoring, keeping a close eye on. He will continue to take the steps to hold colleges accountable for raising costs without delivering additional value. That’s a big piece of what you were asking me, but already, the administration has taken actions, accountable measures. We reinstated an enforcement office at the Department of Education. We terminated a college creditor that had previously allowed colleges that defrauded borrowers to get access to federal student loans.
Karine Jean-Pierre: (50:50)
That’s something that Barat just talked about specifically, moments ago. We’re rolling out a new resource to help students make more informed decisions on which school will better deliver value for the cost. Once again, I just want to say this. One thing that people are told, young people in particular are told, is that in order to have a good job, or have a career, you’ve got to go to college and get that education, or continue that education. There are some communities that need a little bit of help, and we should be providing that little bit of help. That’s why the President did a targeted, fiscally responsible approach in making sure that we give Americans a little bit more breathing room, middle class Americans a little bit more breathing room. When you do that, they are going to have extra money to buy that house. They’re going to have a little extra money to start that family. That is important as well, and that is something that the President is certainly committed to.
Speaker 10: (51:54)
Karine Jean-Pierre: (51:55)
Go ahead. I’ll come around, go ahead. I’m sorry. Sebastian, I was pointing to Sebastian, then I’ll come around.
I knew there were people right behind me.
Karine Jean-Pierre: (52:04)
It’s so funny. I actually think when I’m pointing, I’m pointing to someone specific, but from the other-
Karine Jean-Pierre: (52:16)
On the semi fascism comment-
Karine Jean-Pierre: (52:19)
Is this something we’re going to hear more of, that phrase? Is it something the President’s going to embrace, or is there any sense that it was a little impromptu, and it’s going to turn into a basket of deplorables thing that he regrets, and tries to be quiet about?
Karine Jean-Pierre: (52:34)
I was very clear when laying out and defining what MAGA Republicans have done. You look at the definition of fascism, and you think about what they’re doing in attacking our democracy, what they’re doing and taking away our freedoms, wanting to take away our rights, our voting rights, that is what that is. It is very clear, and that’s why he made that powerful speech that you heard from him last night. He has not shied away from saying that. You have heard him maybe not use that specific word, but you have heard him certainly use that definition.
Karine Jean-Pierre: (53:20)
Again, what we are putting before the American people is a choice, and it is clear. There’s a clear contrast of what is happening on that side of the aisle, and what’s happening on our side, what congressional Democrats and we have been delivering for the American people. We’re going to continue to fight for freedom. We’re going to continue to fight for people’s rights. That is something that he takes very seriously, and that’s what you heard from him last night.
Just quickly, on the other side of the world, how confident is the administration that European allies are going to be able to weather the energy crisis they seem to be going into, and winter is obviously going to get worse. Finnish people are apparently not taking saunas already, but it’s getting worse than that, not to make light of it. Politically, is there a concern that this whole Alliance over Ukraine is going to really start cracking when that bites, winter?
Karine Jean-Pierre: (54:21)
Just a couple of things, and I have a few things that I want to say, because this is an important question. President Putin is weaponizing energy. You’ve heard us say that before, and that is exactly what is happening. This is why President Biden set up a task force with the EU back in March, to work on ways to increase alternative sources of natural gas to Europe, including from the United States. We’ve made progress since March. Global LNG exports to Europe have risen by 84%, compared to 2021, while the U.S. share of those LNG exports have been nearly tripled. That’s important to note. In fact, global LNG exports to Europe since March have increased by 20 billion cubic meters compared to last year, already exceeding the pledge President Biden made back in March to work with partners, to ensure additional volumes for the EU market of at least 15 billion cubic meters this year.
Karine Jean-Pierre: (55:21)
We know we have more work to do, and will keep looking for ways to increase gas stockpiles in Europe, coupled with efforts to reduce Europe’s demand for natural gas through energy efficiency and clean energy deployment. The path to energy security requires a doubling down on our efforts to transition to a clean energy economy, and we continue to work with Europe on this shared goal. What you have seen these past several months, more than six months, even before we saw the war in Ukraine, the unprovoked war by Russia, is a unified west. You see the NATO Alliance the strongest than it’s ever been. It looks like it’s going to extend by two, and that would not have happened if they weren’t united, if we didn’t see the leadership of this President.
Karine Jean-Pierre: (56:18)
We believe that Alliance, that partnership is going to continue. We are going to make sure that our partners in Ukraine have what they need to continue to fight for their freedom, and fight for their sovereignty.
Karine Jean-Pierre: (56:34)
We have to go? Okay. Go ahead Brett. I was supposed to call on Brett, go ahead.
Thanks Karine. I know today marks the anniversary of the terrorist attack in Kabul, in Afghanistan. I saw the President’s statement this morning, but I was curious, has he reached out to any of the families of the victims of that attack, or does he have any plans to address the anniversary of the withdrawal at length, to the American people?
Karine Jean-Pierre: (56:58)
The President put out a statement earlier today. As you all probably saw, some of you probably saw the statement that was released, he named each of the 13 troops who were tragically killed on that day. The President feels deeply about the loss that was suffered one year ago, and as he said in that statement, he feels strongly that we owe their families support for the rest of their lives. That is something that he’s committed to. We are never going to stop seeking justice for those who were involved in planning of that attack, or for terrorists who threaten our Homeland on any other day.
Karine Jean-Pierre: (57:44)
No President feels more strongly about our troops and their families than this President, and he and the First Lady have taken action to support our service members and their families through Joining Forces, and signing the historic burn pits legislation that, as you all know, expands benefits for veterans, and it was incredibly historical. Again, I point you to the statement. I don’t have anything more to share. I will take one last question, somebody I haven’t called on. Rob, I know you’ve been raising… Rob, go ahead.
Okay, on Afghanistan, just to follow up, what would you say to the father of a U.S Marine killed in the suicide attack last year, who thinks that taping a segment with Jay Leno this afternoon is insensitive and tone deaf?
Karine Jean-Pierre: (58:39)
Again, this is something that’s very personal to the President. It was a tragic killing. On that day, 13 members were lost, as well as more than 170 Afghan lives. This is an incredibly important day that he wants to make sure that he acknowledged, which is why he put out the statement. He and the First Lady have not lost focus on those families, or any of the families that have lost loved ones in this 20 year war. Remember, we were there for two decades, and we lost a lot of lives. Through Joining Forces, as I just mentioned, and the burn pits legislation that the President just signed, that is important as well. That is the work that this President is committed to doing, and that is a big deal, an important thing for service members and their families. Again, no President feels more strongly about our troops and their families than this President, who himself is the father of a service member who served in Iraq. This is-
Is it a good day to film something with a comedian? Are you worried about the optics of that at all?
Karine Jean-Pierre: (59:57)
What I will tell you is that this is a day, a tragic day that the President takes very personally. Not just the President, also the First Lady, and I will let his words, the statement stand for itself. He knows this, again, as a father himself of a service member that served in Iraq. We do not take this lightly, we take this very seriously. Our hearts are with the families today. Okay, I’m going to go. We’re going to go.
Speaker 11: (01:00:32)
Do you have any comment on the election in Angola and Kenya?
Karine Jean-Pierre: (01:00:36)
I’ll take that one really quickly, and then we’re going to go, because this is important. The United States congratulates the people of Angola for making their voices heard in Wednesday’s elections. We continue to observe the electoral process, as votes are counted. We encourage peace and patience as the vote tally process continues. The United States supports the democratic process through our ongoing democracy and governance programs, and by observing the election. Election observations promote participation and public confidence in the electoral process.
Karine Jean-Pierre: (01:01:10)
The United States and Angola share a strong partnership. We will continue to work together with the government chosen by the Angolan people to deepen cooperation around shared priorities, including democracy, economic growth and investment, global health security and public health, and climate and energy goals, to create a better future for all Angolans. The United States commends the people of Angola for their participation in the democratic process and efforts to strengthen democratic institutions, which will provide a foundation for a safe, prosperous, healthy, and inclusive future for both of our countries.
Karine Jean-Pierre: (01:01:49)
Thank you everybody, have a great weekend. I’ll see you on Monday.
Have a nice weekend.