Trump Promises Billionaires: I'll Keep Your Taxes Low

Trump Promises Billionaires: I'll Keep Your Taxes Low

Biden spoke at Madison College in Madison, Wisconsin.
By Yuval Rosenberg and Michael Rainey
Monday, April 8, 2024

Happy Monday! Was your eclipse experience as powerful as you’d hoped?

We hope to be able to go from darkness to light this week on some key fiscal matters. Congress is back from its recess and has plenty to deal with, including the unresolved supplemental spending package for Ukraine and Israel. House Speaker Mike Johnson is expected to roll out his proposal for Ukraine in the coming days and Homeland Security Secretary Alejandro Mayorkas, awaiting the next stage in his impeachment proceedings, is scheduled to testify before congressional appropriators on his department’s 2025 budget request. And we’ll get a reading on March inflation on Wednesday morning.

Here’s what else we’re watching.

Biden Announces New Student Loan Forgiveness Program for 25 Million Borrowers

President Joe Biden is taking another shot at reducing student loan debt, 10 months after the Supreme Court rejected an earlier $400 billion plan to forgive loans for roughly 40 million borrowers.

The White House on Monday announced a new proposal to forgive student debt for borrowers who have seen their loan balances increase due to accrued interest, even if they had made payments for years. Under the proposed plan, all such borrowers would be eligible for forgiveness of as much as $20,000 in accrued interest. In addition, borrowers earning less than $120,000 a year ($240,000 for couples) would be eligible to have all accrued interest forgiven if they are enrolled in an income-driven repayment plan.

The plan would also eliminate student loan debt for borrowers who have been making payments for more than 20 years on undergraduate loans and 25 years on graduate loans. Borrowers who were students at institutions that failed to meet certain quality standards or offered “low-financial value” programs would also see relief. And borrowers facing certain economic hardships, such as medical debt or high child-care expenses, could also be eligible for loan forgiveness.

The administration did not provide an estimate of the cost of the plan, which would operate automatically, without requiring beneficiaries to apply for forgiveness.

According to the White House, the proposals released today would benefit about 25 million borrowers. Combined with existing loan forgiveness programs, which have provided $146 billion in student debt relief, the total number of people gaining some level of student loan forgiveness under the Biden administration would come to roughly 30 million.

The political angle: Speaking to reporters on his way to a rally in the college town of Madison, Wisconsin, Biden pitched his proposal as a matter of fairness and opportunity. Saying he wanted to “give everybody a fair shot” and the “freedom to chase their dreams,” Biden criticized the soaring cost of higher education.

“Even when they work hard and pay their student loans, their debt increases and not diminishes,” Biden said. “Too many people feel the strain and stress, wondering if they can get married, have their first child, start a family, because even if they get by, they still have this crushing, crushing debt.”

But student debt relief is also an important political issue. Biden pledged to provide student debt forgiveness when he was running for office in 2020, and his failure to provide comprehensive relief has hurt him with some of the younger voters he will need at the ballot box in his rematch with former President Donald Trump this fall.

In an effort to avoid a political fight over the new plan, the Biden administration will introduce the proposal as a rule put forth by the Education Department in the coming weeks. This approach will bypass congressional input, but it still leaves the program open to legal challenges. The administration has reportedly spent months anchoring the new plan in the 1965 Higher Education Act, in the hope that, unlike its previous effort, the loan forgiveness plan will pass muster with the courts.

Trump Promises Billionaires He’ll Extend Their Tax Cuts

Former President Donald Trump reportedly told wealthy donors to his 2024 campaign that he’ll keep their taxes low and extend his 2017 tax cuts, many of which are set to expire after 2025.

Trump’s campaign said he had raised a record $50.5 million at a Saturday night fundraising dinner held at the Palm Beach, Florida, home of billionaire hedge fund investor John Paulson. The event was private and the Trump campaign reportedly declined to release a transcript of the former president’s roughly 45-minute presentation to more than 100 guests seated under a giant tent — though we can tell you that the gathered donors, including several billionaires, reportedly “dined on endive and frisee salad, filet au poivre, and pavlova with fresh berries,” according to NBC News.

A Trump campaign official told NBC that the former president “spoke on the need to win back the White House so we can turn our country around, focusing on key issues including unleashing energy production, securing our southern border, reducing inflation, extending the Trump Tax Cuts, eliminating Joe Biden’s insane [electric vehicle] mandate, protecting Israel, and avoiding global war.” The New York Times reported that Trump also “lamented that people were not immigrating to the United States from ‘nice’ countries ‘like Denmark’ and suggested that his well-heeled dinner companions were temporarily safe from undocumented immigrants nearby, according to an attendee.”

In comments made outside the fundraiser, Trump said people wanted to contribute to the cause of making America great again. "People are just wanting change. Rich people want it, poor people want it, everybody wants change," Trump said.

Reuters also noted that Paulson “has been floated by Trump as a potential Treasury secretary, according to two sources,” as has investor Scott Bessent, reportedly a co-host of the fundraiser. Others attending the event reportedly included hedge fund manager Robert Mercer, oil executive Harold Hamm, hotel entrepreneur Robert Bigelow and casino mogul Steve Wynn.

Biden camp quick to draw a contrast: The Biden campaign slammed Trump for the event, posting a video describing what it called the “scammers, racists, and extremists at Trump’s billionaire fundraiser.”

In a video posted on social media, President Biden said Trump was “raising money from a bunch of hedge fund billionaires who want him to cut Social Security and Medicare and their taxes.” Biden highlighted his own grassroots fundraising totals and called the presidential race one of nurses, teachers, firefighters and cops against Trump “and a couple of billionaires looking for a tax cut.” And a Biden spokesperson, Ammar Moussa, posted on X: “The ultra-wealthy are really mad at Joe Biden for making them pay their fair share.”

A new joint fundraising effort by Trump and the Republican National Committee reportedly asked donors to contribute up to $814,600 per person or $250,000 per person. “In an unusual arrangement, the fundraising agreement directs donations to first pay the maximum allowed under law to his campaign and Save America [a political action committee that pays the bulk of Trump’s legal bills,] before the RNC or state parties get a cut,” the Associated Press said.

Billionaires come back to Trump: Some of Trump’s big-money donors had previously expressed regret for backing him in the past and had supported other candidates — until the former president again emerged as the GOP’s presumptive nominee.

Los Angeles Times Senior Editor David Lauter said over the weekend that the shift highlights the issues at the heart of the 2024 campaign, beyond Trump’s legal troubles and questions about Biden’s age.

The coming fight over the expiring 2017 tax provisions is one major issue, and Trump’s wealthy donors know what they have at stake: “Their taxes could go up by millions of dollars if President Biden wins reelection and can enact key elements of his second-term agenda,” Lauter wrote. “If Congress decides that some or all the cost of renewed a tax cut needs to be offset, which party has the majority and whether the White House is occupied by Trump or Biden will have an enormous impact.”

And those concerns about taxes — and perhaps a self-interested desire to stay on Trump’s good side in case he wins again — can dwarf other considerations. “Rich people who disagree with Trump on policy but support him anyway may be especially common in California,” Lauter suggested. “His opposition to abortion and immigration, for example, is unpopular in Silicon Valley, but for many tech executives, concern about high taxes outweighs everything else.”

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