• Ryan O'Connell

Does Warren Want to be President....or "Queen Elizabeth"?

January 18, 2020

Elizabeth Warren said some scary things during the Democratic debate this week. The Senator promised that on “day one” after assuming office, she would wipe out almost all federally guaranteed student debt and cut prices on various drugs, “using the President’s powers.” Warren would issue executive orders to accomplish these goals, rather than introduce legislation in Congress.

Warren’s ideas may resonate with Democratic voters, at a time when her campaign could use a boost. After all, many young Americans are struggling with student loans--so that’s one way for Warren to attract votes from millennials. Although senior citizens particularly complain about the high cost of drugs, expensive medicines can be a burden for a broad range of voters.

However, you should be worried by Warren’s proposals, if you care about due process and the balance of power between the White House and Congress.

The Senator would follow the same imperious approach as Donald Trump, who has acted like a czar and treated Congress with contempt. The President has outraged Democrats by issuing a record-breaking number of executive orders to implement his agenda, precisely because he knows that he cannot secure Congressional approval for many of his pet projects, including The Wall.

Canceling Student Loans Would Blow A Hole in the Budget

The total amount of federal student debt is $1.2 trillion, so Warren’s proposal is a very big deal. Student loans are the second largest category of consumer debt, after home mortgages. Federal revenues are about $3.5 trillion, so canceling student loans would blow a large hole in the government’s budget.

Almost all federally guaranteed student loans have been sold to investors, so the government would have to pay off those obligations—in cash. The government would of course no longer collect payments of interest and principal from the borrowers.

A wise President would work hard to get Congressional buy-in, building support among the public and legislators before undertaking such a major policy move.

The great danger with executive orders, as contrasted with duly enacted laws, is that they can easily be reversed by a new administration. Trump has been obsessed with undoing Obama’s legacy in environmental matters, and, unfortunately, he has been very successful in that regard. Trump also reversed Obama’s executive order protecting 800,000 Dreamers from deportation. (Obama’s move constituted a very aggressive use of an executive order, however laudable the intent.)

By contrast, Trump and other Republican leaders have repeatedly failed to dismantle The Affordable Care Act (the ACA) --because they could not muster the votes in Congress to repeal the law. All three of Obama’s initiatives were popular with voters, but only the ACA has endured.

Wiping out the $1.2 trillion of student debt would also be taking an extreme approach. After all, about 90% of borrowers are paying their loans on time. The biggest problems concern people who did not finish college, so they are earning less money, or those who attended a for-profit university or a two-year trade school. Many of those institutions, unlike traditional four-year non-profit colleges, push students to take on too much debt or don’t prepare them adequately for a solid career.

Sensible reforms would target those segments of borrowers, rather than cancel the debt for all borrowers. Congress could also pass a law easing the burden for borrowers, by letting them deduct the interest they pay on their loans. Of course, that would require hearings, negotiations….and compromises.

Sen. Elizabeth Warren--Spencer Platt/Getty Images

A French Bureaucrat’s Dream

Warren’s promise to cut drug prices unilaterally is not just disrespectful of Congress. The path she is taking represents a very interventionist approach to the economy, by imposing price controls on certain goods. How many drugs would be affected? How would her administration determine what the “right” price would be? And why stop at drugs…. why not dictate doctors’ fees, too?

This sounds like a French bureaucrat’s dream, not an exercise in American democracy.

Warren is probably promoting this approach partly because Mitch McConnell, the Senate majority leader, prides himself on blocking legislation proposed by Democrats. Sen. McConnell has done severe damage to our democratic process, by refusing to enact laws that large majorities of voters prefer, such as on gun control. McConnell delights in frustrating the popular will.

That’s despicable, but it does not give Democrats carte blanche to circumvent the legislative process.

What’s the Rush?

Finally, what is the Democrats’ fetish about taking action “on day one”? Sen. Kamala Harris also talked about issuing sweeping executive orders on her first day in office. We have already suffered from the ridiculous obsession with the first 100 days of a new President’s term. That’s an artificial, meaningless deadline. A new administration needs time to hammer out new laws with Congress. It took Obama 14 months to secure passage of the Affordable Care Act, but that part of his legacy has survived.

As we have seen all too clearly in the last three years, governing well takes a lot of time and work, as well as cooperation between the executive and legislative branches. It’s tempting for Presidents to do end runs around Congress, but Democrats must resist that urge. Yes, democracy is messy. But’s it’s better than having a king or queen, whether they are high-minded or not.

The Wall Street Democrat

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