Congress didn't appropriate the money for President Joe Biden to order student loan forgiveness, and his move may not be legal, Rep. Warren Davidson, a member of the House Financial Services Committee, said Saturday on Newsmax.
"We've told our caseworkers to just reply to people, [when they ask] how we sign up for the free $10,000, and we say, well, don't get ahead of yourselves," the Ohio Republican commented on Newsmax's "Wake Up America."
"We don't think it's actually legal. I think the courts will strike it down."
Biden likewise "knew he didn't have the legal or constitutional authority to extend an eviction moratorium, and he did it anyway, and the court had to stop him twice," Davidson added. "I think that's what's going to happen here."
Biden's student loan plan, which would allow up to $20,000 of student loans debt to be forgiven, is "foolish," Davidson added. "It's just going to dump more fuel on Biden's inflation bonfire."
He also noted that the loan forgiveness serves to "diminish the return" for people who have joined the military, in part, to obtain education benefits, and for people who "scrimped and saved and ate grilled cheese and ramen so they wouldn't go deeper in debt and they paid off their debt … what a horrible example for people to just say more free stuff for more people from the government, and it benefits a select few at the expense of the country."
And when asked if Congress could regulate the cost of colleges, Davidson said he supposes that could happen, but he thinks such controls of the economy are a "horrible path for our country to go down."
"We could have a controlled economy and I think that's what a lot of Democrats are pushing for, and frankly, even some big government Republicans," Davidson said. "To compete with China, people are saying we should be more like China. We should have more central planning and more power for the central government, all from D.C."
But the United States is the "world's land of opportunity" because there is freedom in its free markets, said Davidson.
"We have the best markets for goods services, capital intellectual property, you name it, and we've done that, with the healthy measure of freedom and not price controls," he said. "You look at tuition and healthcare. Their rate of inflation is massive compared to other parts of our economy, and that's because they have more government control."
And government subsidies also drive prices up, Warren said, noting that when a $7,500 subsidy for electric cars went into effect this summer, the car companies raised the prices for the vehicles by that much.
Meanwhile, the administration's policies on the economy are failing, Davidson said, commenting on Federal Reserve Chairman Jerome Powell's speech to the central banking conference in Jackson Hole, Wyoming, Friday.
The chairman warned that Americans are facing a painful period while the Fed raises interest rates to blunt high inflation. He further said economic growth will be slow while joblessness could rise.
"Just last summer, Jerome Powell was saying inflation was under control and nothing to be alarmed about," said Davidson. "Everyone that studied economics up till recently knew that when you print money [and] nobody lends it to you. You're debasing the currency."
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Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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