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THE BIDEN ADMINISTRATION, facing a major election debacle in November, is expected to announce another extension of student loan interest payments, which will benefit about 40 million debtors. That’s a lot of voters.
THE MORATORIUM WAS SUPPOSED TO END on May 1, but surging gasoline and food prices have convinced Biden officials that they should extend it until Aug. 1 (still another extension, as the Nov. 8 elections approach, is likely in late July).
WITH INFLATION AND AN INCREASINGLY HAWKISH Federal Reserve likely to cool economic growth by year-end, the Biden administration wants to keep stimulus flowing on everything from student debt payment relief to another huge Social Security cost of living increase, which will be announced just before the election.
BIDEN’S GRADUAL APPROACH on student loans has angered progressives, most of whom favor debt forgiveness of perhaps $50,000 in loans. Biden has been opposed to any kind of blanket debt relief, but this will be his fourth extension. President Trump extended the moratorium twice.
THIS LATEST EXTENSION, which could be announced today, means that borrowers collectively will save about $5 billion each month in interest payments that do not accrue on their loans, the Biden Administration estimates.
OUR BOTTOM LINE: While the growth of Washington spending is slowing, it’s still robust — states and individuals are flush with cash. A recession is possible in 2023, but it doesn’t look imminent this year; a student loan payment moratorium will help keep consumers afloat.
MEANWHILE, THE SANCTIONS CLAMPDOWN ON RUSSIA is intensifying this week in the wake of shocking reports of torture and murder of Ukrainian civilians. New sanctions have targeted Russia’s ability to make debt payments; a default is increasingly likely by early May, the New York Times concludes in a report this morning.
DESPITE ANXIETY over surging food and fuel prices, Western leaders are under pressure from voters to do more to punish Vladimir Putin. More arms shipments to Ukraine are certain, as are curbs on purchases of Russian coal.
THE BIGGEST NATO CONTROVERSY is over Russian natural gas; Germany doesn’t want to accept immediate curbs on imports. “We are pursuing a strategy that will make us independent of Russian gas, coal and oil, but just not right away,” a top German official said yesterday. That means Germany will continue to send about $220 million a day to Russia for natural gas, which will help finance Putin’s murderous war.
Related: How Russian Atrocities Will Alter the War
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