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debt
'Dangerous': Judge Blocks Student Debt Relief Rule That Doesn't Exist Yet
"Opponents of democracy are terrified that they will lose again at the ballot box in November and are rushing to right-wing judges to hamstring democratic governance," said one observer.
Sep 05, 2024
A Republican-appointed U.S. federal judge in Georgia raised eyebrows and objections Thursday after taking what observers called the "unprecedented" step of blocking a rule that hasn't even been finalized in order to stop the Biden administration from implementing a plan to deliver promised debt relief to millions of student borrowers.
U.S. District Judge for the Southern District of Georgia James Randal Hall issued an order blocking the Biden administration's proposed federal student debt relief rule. Hall—an appointee of former President George W. Bush—granted a motion by a coalition of right-wing state attorneys general to preempt the rule's eventual implementation.
"The court is substituting its judgment for those elected to serve the public," American Federation of Teachers president Randi Weingarten said in response to the ruling. "It subverts the democratic process and denies relief to student loan borrowers, many of whom rely on debt relief programs already advanced by the Biden-Harris administration."
"This court's unprecedented decision to block a rule that does not yet exist is not only bad for the 30 million borrowers who were relying on the administration to deliver much-needed relief," she continued. "It's a harbinger of the chaos and corruption right-wing judges seek to force on the American people."
Mike Pierce, executive director of the Student Borrower Protection Center—which called the ruling "dangerous and unprecedented"—denounced Hall for preventing the Biden administration from delivering student debt relief "even though no plan has been finalized."
"This is an extraordinary break with precedent and a brazen move by the conservative movement to shift even more power to unelected, unaccountable red-state judges," he said. "Opponents of democracy are terrified that they will lose again at the ballot box in November and are rushing to right-wing judges to hamstring democratic governance."
"This is the clearest sign yet that Project 2025 is already terrorizing student loan borrowers through a slow-moving judicial coup," Pierce added, referring to a conservative coalition's agenda for a far-right takeover of the federal government—which critics warn would worsen the U.S. student debt crisis.
Biden's proposal would forgive some or all student debt for around 30 million borrowers who have been repaying undergraduate loans for at least 20 years, or graduate loans for 25 years.
Hall's order is based on what he said was the plaintiffs' "substantial likelihood of success on the merits given the rule's lack of statutory authority" and U.S. Education Secretary Miguel Cardona's "attempt to implement a rule contrary to normal procedures."
"This is especially true in light of the recent rulings across the country striking down similar federal student loan forgiveness plans," he added.
The U.S. Supreme Court's right-wing supermajority last year struck down Biden's initial plan to relieve up to $20,000 in federal scholastic debt for around 40 million borrowers, and last month the justices kept in place a sweeping suspension of the administration's Saving on a Valuable Education (SAVE) program, which aims to lower monthly repayments and hasten loan forgiveness.
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Pharma-Funded Republican Comes Out Swinging Against Medical Debt Cancellation
Sen. Bernie Sanders, by contrast, argued that "we must cancel all medical debt" and "move to Medicare for All."
Jul 12, 2024
A Republican senator heavily bankrolled by the pharmaceutical industry spoke out Thursday against calls to cancel medical debt, arguing that wiping out a financial burden saddling 100 million Americans "is not a solution."
"One-time cancellation of medical debt... is a Band-Aid approach to a one-time problem that's gonna come back," Sen. Bill Cassidy (R-La.) said during a Senate Health, Education, Labor, and Pensions (HELP) Committee hearing on the nation's medical debt crisis.
After dismissing medical debt cancellation on the grounds that it would not address the "root causes" of the crisis, Cassidy—the ranking member of the Senate panel—proceeded to make clear that he opposes the kinds of transformational healthcare reforms that advocates say are necessary to eliminate the problem of medical debt for good.
"We may hear today about Medicare for All," Cassidy accurately predicted. "But I also say that a healthcare system in which you think it's free because the taxpayer is footing the bill—you've never seen how expensive something can be until you perceive that it is free."
Watch Cassidy's remarks:
Cassidy is a major recipient of campaign cash from the pharmaceutical industry, whose stranglehold on prescription drug prices has been a significant driver of medical debt in the U.S.
Over the course of his career, the Louisiana Republican has raked in over $1 million in donations from the pharmaceutical and health product industries, according to OpenSecrets.
STAT Newsreported last year that Cassidy reaped "a slew of campaign donations" from Big Pharma executives shortly after he officially became the top Republican on the Senate HELP Committee, which is chaired by Sen. Bernie Sanders (I-Vt.)—a leading supporter of canceling medical debt and enacting Medicare for All.
In May, Sanders and several Democratic allies introduced legislation that would eliminate all of the roughly $220 billion in outstanding U.S. medical debt.
Contrary to Cassidy's suggestion that the bill would do nothing to prevent the future accrual of medical debt, Sanders' legislation would "amend the Public Health Service Act, updating billing and debt collection requirements to limit the potential for future debt to be incurred," the senator's office noted in a summary.
Neale Mahoney, a medical debt expert at Stanford University, said in a statement after the bill was unveiled that the measure "cuts off medical debt at the source by requiring hospitals to uphold their obligation to provide charity care to eligible patients who cannot afford to pay and supports hospitals so they can forgive debt before it gets sold to debt collectors."
During his opening remarks at Thursday's hearing, Sanders called medical debt "one of the most outrageous and cruelest" aspects of the nation's "dysfunctional" healthcare system.
"Pharmaceutical companies and insurance companies charge the American people for the 'crime' of getting sick," said Sanders. "Let's be clear: The medical debt crisis our nation is experiencing is a uniquely American phenomenon—does not exist in other countries around the world."
"We are the only major country on Earth," the senator added, "where an emergency visit to a hospital can cause patients to lose their homes and their life savings."
1 out of 4 cancer patients in America either declared bankruptcy or lost their homes to eviction or foreclosure as a result of medical debt in 2022.
That is insane.
We must cancel all medical debt.
We must move to Medicare for All. pic.twitter.com/LSQoFyrCKm
— Bernie Sanders (@SenSanders) July 11, 2024
Recent polling found that a majority of Americans believe it is "extremely or very important" that the federal government act to provide relief for those with medical debt. The health policy organization KFF estimates that around 3 million U.S. adults have more than $10,000 in medical debt and 14 million owe more than $1,000.
Abdul El-Sayed, director of Wayne County, Michigan's Department of Health, Human, and Veteran Services and an outspoken Medicare for All supporter, said in his testimony at Thursday's hearing that a single-payer healthcare system would "address the porous nature of health insurance" and help prevent the accumulation of medical debt "by guaranteeing universal health insurance coverage from birth."
"One of the main drivers of costs in our current system is administrative overhead, higher in our country than in any other country in the world," said El-Sayed. "Much of that overhead is imposed by the complexity of billing multiple health insurers. With only one insurer that bears no profit motive, we could eliminate some of that cost burden—ultimately reducing the costs born on Americans that show up as medical debt."
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Progressive International Applauds Kenyans for Rising Up to Defeat IMF Austerity Bill
"They refuse to become another laboratory for neoliberalism—impoverished, beaten, or killed for the benefit of foreign corporations and their lackeys in the Kenyan government."
Jun 27, 2024
Progressive International on Thursday applauded the people of Kenya for taking to the streets en masse to defeat an International Monetary Fund-backed legislative package that would have hiked taxes on ordinary citizens as part of an effort to repay the government's powerful creditors.
"Pushed through at the behest of the International Monetary Fund, the World Bank, and the U.S. State Department, the bill would impose severe austerity measures and crippling taxes on Kenya's working people, who are already strained by Kenya's legacy of colonial underdevelopment," Progressive International said in a statement.
"The Progressive International stands firmly with the people of Kenya," the organization added. "They refuse to become another laboratory for neoliberalism—impoverished, beaten, or killed for the benefit of foreign corporations and their lackeys in the Kenyan government."
The Kenyan government's proposal, welcomed by the IMF as necessary for "debt sustainability," triggered massive youth-led protests in the nation's capital last week as thousands of citizens already immiserated by sky-high living costs flooded the streets to express outrage at the U.N. financial institution and their government for fueling the crisis.
The government crackdown was swift and deadly, with police using tear gas and live ammunition to beat back demonstrators calling for the withdrawal of the proposed bill and the resignation of President William Ruto, who took office in 2022.
Protesters achieved one of their objectives Wednesday when Ruto announced he would not sign the tax legislation, just days after he
ordered the country's military to help suppress the demonstrations.
"Listening keenly to the people of Kenya who have said loudly that they want nothing to do with this finance bill, I concede, and therefore, I will not sign the 2024 finance bill, and it shall subsequently be withdrawn," Ruto said in an address to the nation, which spends more than a quarter of its revenue on debt interest payments.
"The protesters we have been speaking to are still very angry, still very frustrated, they hold the president responsible for the deaths of those young Kenyans across the country."
As The Associated Pressreported, the withdrawn measure would have "raised taxes and fees on a range of daily items and services, from egg imports to bank transfers."
Kenya's public debt currently stands at $80 billion, around $3.5 billion of which is owed to the IMF—an explicit target of protesters' ire.
"Kenya is not IMF's lab rat," declared one demonstrator's sign.
The IMF said in a brief statement Wednesday that it was "deeply concerned" about the "tragic events" in Kenya and claimed its "main goal in supporting Kenya is to help it overcome the difficult economic challenges it faces and improve its economic prospects and the wellbeing of its people."
“Kenya is not IMF’s lab rat”
“I was in my healing era” pic.twitter.com/xLt2GG51hf
— Larry Madowo (@LarryMadowo) June 20, 2024
As Bloomberg's David Herbling wrote over the weekend, Ruto "has spent his first two years in office ramming through a slew of unpopular taxes—on everything from gasoline to wheelchair tires, bread to sanitary pads—thrilling international investors and the IMF, which has long urged Kenya to double its revenue collections to address its heavy debt burden."
Ruto's withdrawal of the tax-hike bill appeared unlikely to fully quell mass discontent over the president's IMF-aligned economic policies as protests continued on Thursday.
"The protests today are not as big as they were two days ago but they are still no less intense where they are happening," Al Jazeera's Zein Basravi reported from Nairobi. "If President Ruto, protesters say, had signed off on killing the tax bill 72 hours ago, a week ago, these protests might not be happening. But the decision he made, the concession, has come too little too late, and it has not gone far enough, and it has come at the cost of too many young lives."
"The protesters we have been speaking to are still very angry, still very frustrated, they hold the president responsible for the deaths of those young Kenyans across the country, 23 killed," Basravi added. "And they hold Parliament responsible for not standing stronger, standing firmer, against the president as they feel he was overreaching his position."
U.S. Rep. Ilhan Omar (D-Minn.) said in a statement Wednesday that it is "crucial to recognize that the International Monetary Fund's austerity conditions have contributed to the economic hardships facing Kenyan citizens."
"These measures often disproportionately affect the most vulnerable populations and can exacerbate social unrest," continued Omar, who chairs the U.S.-Africa Policy Working Group. "It is imperative that protesters remain peaceful as they continue to demand change. I stand in solidarity with the people in the wake of both state violence and IMF-imposed austerity measures."
"The Kenyan government must immediately disclose the location and condition of all those who have been taken into custody or disappeared, cease the use of excessive force, respect the right to peacefully protest, and continue to engage in meaningful dialogue to address the legitimate concerns of its citizens," Omar said.
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