CNBC host says student loan handout will make inflation harder to deal with

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CNBC's Andrew Ross Sorkin says Biden's college debt cancellation will "make things harder" to bring down inflation

CNBC anchor Andrew Ross Sorkin discusses Biden's handout on college debt and its greater impact on the economy.

CNBC host Andrew Ross Sorkin claimed on Thursday that President Biden's decision to give a handout to those with college debt would make fighting inflation tougher. 

"I think there's two sides to it," Sorkin said during MSNBC's "Morning Joe." "If you're a beneficiary of it, it is a very, very good thing. Having said that, in the context of inflation, I also think there is no way to look at this and say it is not going to make things harder for the Federal Reserve and for government to try to bring down inflation."

"That is just the reality of this decision," he added.

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U.S. President Joe Biden acknowledges attendees during a Fourth of July event on the South Lawn of the White House in Washington, D.C., US, on Monday, July 4, 2022. (Chris Kleponis/CNP/Bloomberg via Getty Images)

Biden announced a plan earlier this week that his administration will cancel $10,000 of federal student loan debt for certain borrowers making less than $125,000 per year, and up to $20,000 for Pell Grant recipients. In addition, the pause on college loan payments will remain in place until the end of this year. 

Sorkin said whether Biden's loan cancellation is good policy is a "philosophical" and "legal" question. However, he suggested Biden's plan might spark blowback, and he pointed to the government's bailout of big banks during the 2008 financial crisis as a spark that led to the creation of the Tea Party movement. 

"Having covered the 2008 financial crisis, we had bailouts in this country. Huge bailouts of big corporations, it caused all sorts of unique politics to develop, including the Tea Party," he said. "Lots of folks who got very upset that certain people were getting helped over other people, if you recall."

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FILE - In this Feb. 17, 2021 file photo, students walk on the Boston College campus in Boston. (AP Photo/Michael Dwyer, File) ( (AP Photo/Michael Dwyer, File))

Sorkin pointed to similar problems with the government's COVID-19 stimulus, where "celebrities got PPP money and benefited in certain ways."

"Here we are with another - I don't want to say handout - but we've decided to incentivize or to provide benefits to certain people over others and invariably the result of that, beyond the economic result, is that we are going to have an additional political fight in this country that I think is just beginning today," he said.

MSNBC host Joe Scarborough compared a bipartisan agreement on gun control to Abraham Lincoln ending slavery, on "Morning Joe," June 13, 2022. (MSNBC/screenshot)

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Some have challenged that Biden does not have the authority to unilaterally cancel student loans, and Biden himself has previously made this argument. Critics of Biden's student loan cancellation contend that it subsidizes a broken college system, which has seen costs increase 169 percent since 1980 according to a report from Georgetown University.