In an announcement that shocked many, the Biden Administration has announced they will be paying off all car loans and leases for people who have internal combustion engine cars. This is their biggest move yet to migrate Americans from their gas guzzlers to EVs.
President Biden made the announcement saying “We had to take this bold move to achieve our goal of getting my fellow Americans to transition to electric vehicles. As long as these people are burdened by these financial obligations, they will be blocked from making the decision they want to make – a clean, energy efficient vehicle. We are unleashing the power of the American economy.”
An immediate response of overwhelming joy came from the environmental community. The President of the Union of Concerned Scientists, Ray Bradbury, applauded the move. He said, “With this stroke of bold leadership we will remove millions of those environment destroying vehicles from our highways.” Rachel Carson, the Sierra Club spokesperson stated, “We can’t imagine a better move by the current administration to eliminate destructive CO2 gases and save our forests.”
“This is going to change the lives of a lot of people,” said Mark Huelsman, director of policy and advocacy director of the Hope Center, a higher education think tank. When a reporter pointed out that is the exact same statement, he made about student loan relief Mr. Huelsman blurted “Yes, but I really mean it this time.”
Congressional allies of Biden loved the move. Senate Majority Leader Chuck Schumer called Biden and told him “It’s the right thing to do morally and economically.” He expressed how he was personally pleased that his own car loan will be alleviated by the government action. He spoke of getting an EV because of the program and how that would improve the world.
Speaker Pelosi had previously stated that it was unconstitutional as this action was outside the rights of the executive branch. She was now thrilled that her husband’s Porsche was not burdened by the debt he had on it when caught drinking and driving.
The response was not nearly as favorable from the Republicans. Congressional Minority Leader, Kevin McCarthy said he was stunned by the announcement. “Does Biden think he is a dictator? Where does he think he gets the authority to do this? What is next credit card debt and home mortgages?” Steve Scalise, Minority Whip, jumped in and grabbed the microphone yelling “Please don’t give him any ideas.”
The authorization for this debt relief as stated by the Biden Administration is the Heroes Act of 2003, the same act that was used for waiving college loans. The Biden Administration stated they were doing this due to the current status of it being a national emergency. When asked what aspect of this was a national emergency a spokesperson for the Biden Administration stated, “Every part of our administration is a national emergency.”
Many people are concerned about the inflationary effect of this debt relief. Economists were highly concerned that the $300 billion or more of college loan debt that will be absorbed by the federal government was a big inflation stimulant. One of the people who had expressed concern after the student loan debt relief was Jason Furman, chair of President Obama’s Council of Economic Advisers. When asked about this announced debt relief Furman was very succinct in his answer, “We’re screwed, we are all screwed, you can’t believe how screwed we are.”
Reporters asked the president’s press secretary what the financial effect of this policy will be. In her answer Karine Jean-Pierre stated, ah we don’t know exactly what she stated, we are analyzing her response and we will circle back to you on that once we figure it out.
There are a lot of unanswered questions yet. People are trying to figure out if they get the auto loan relief will they still be able to get the $7,500 credit off their taxes for buying an EV. Jared Bernstein, a member of the Council of Economic Advisers, observed that elements of the programs have to be flushed out yet. He should know what he is talking about since he has a music degree and plays the standup bass. Mr. Bernstein noted he was instrumental in the Biden Administration decision. He said he also consulted Herbie Hancock.
It is unclear how this entire program will check out. The Biden Administration could not quantify exactly how much debt would be piled on the existing debt of the government. It is estimated the outstanding auto loans are in the $1.5 trillion range. They have no clue of how much the cost of relieving auto leases will be and whether they will be paying off the residual on the vehicles also. There are many unanswered questions.
It is clear that President Joe Biden will be a transformational president. When asked how he will be perceived in the pantheon of presidents, Biden said “I told you I could change this country more than that Obama guy.”