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Student loan reform crusader mounts campaign for Trump ally's House seat

·4 min read

A bankruptcy attorney specializing in student loan debt is running as a Democrat for a New York House seat that is currently held by a staunch Trump ally.

Austin Smith, in his first bid for public office, launched a campaign for the 2022 House office currently held by Rep. Lee Zeldin (R-NY) in the 1st congressional district of New York, representing eastern Long Island.

"I’m a bit old fashioned and for all my rabble-rousing in my legal career to date, I am skeptical of utopias and weary of the unintended consequences of the promises of utopias," Smith told Yahoo Finance. "That said, I fundamentally think the government needs to help the less fortunate more. The rich can take care of themselves and don’t need any more encouragement or advantages."

Smith's platform consists of three major issues: Student loans, judicial oversight and reform, and the issues that led to a pro-Trump mob storming the Capitol on January 6, 2021.

Austin Smith.
Austin Smith is currently managing partner of the Smith Law Group LLP.

Zeldin, who voted to overturn the certification of electoral votes on January 6, will challenge New York Governor Andrew Cuomo in 2022. And given that all New York primaries are scheduled for June 2022, Zeldin will likely have to give up his House seat to run his gubernatorial campaign.

Evan Stavisky, a political consultant with The Parkside Group, explained that the fight for Zeldin's seat should be a competitive race.

"One, it's no longer a race against the incumbent — it's now an open seat ... and there's going to be redistricting that could dramatically change the lines," Stavisky told Yahoo Finance, noting that the previous lines that were drawn in 2012 were "insisted upon by the previous Republican majority in the State Senate to protect Republican seats in Congress."

Stavisky noted that money will be a key factor in the race. In the October 2020 congressional race in New York's 11th district, candidates raised millions trying to get enough exposure to get elected. And Rep. Ocasio-Cortez famously raised $17.2 million against a GOP challenger for New York's 14th district.

"If you're going to run a competitive primary and a competitive general election," he said, "you're looking at certainly being able to raise a couple million dollars."

Petitions for the race will begin in March 2021, and primaries in June 2022.

President Donald Trump, right, greets Rep. Lee Zeldin, R-N.Y., center, and his wife Diana Zeldin, left, after arriving at Francis S. Gabreski Airport in Westhampton Beach, N.Y., Friday, Aug. 9, 2019. Trump is in the Hamptons to attend a pair of fundraisers before heading to his golf club in New Jersey for vacation. (AP Photo/Susan Walsh)
President Donald Trump, right, greets Rep. Lee Zeldin, R-N.Y., center, and his wife Diana Zeldin, left, after arriving at Francis S. Gabreski Airport in Westhampton Beach, N.Y., on Aug. 9, 2019. (AP Photo/Susan Walsh)

'An opportunity to ride the student loan angst wave'

Smith's background is notable amid the Democratic push for student debt forgiveness. Also, in 2019, former Federal Student Aid COO Wayne Johnson, a Republican, launched a bid for the then-vacant Senate seat in Georgia after resigning from his position in the Trump administration.

"It's definitely the case that student loans have become a central political issue in a way that I didn't expect just a few years ago," Beth Akers, resident fellow at right-leaning think tank American Enterprise Institute, told Yahoo Finance. "There has always been unease about the program, but the proposed actions in today's discourse are at a level that is surprising to me."

Akers noted that the debt forgiveness efforts of Senator Elizabeth Warren's (D-MA) has shaped the "national agenda in the way it is today" and that the country "seems to have shifted surprisingly far in her direction on the issue which has allowed student loan cancellation to become the mainstream issue that it is today in the Democratic Party."

Smith said that while he was inspired by Warren's student debt policies and fellow New Yorker Rep. Ocasio-Cortez "on a personal level," he aligned himself more with moderates like Biden and former President Bill Clinton.

Though Akers wasn't familiar with the House race for New York's 1st congressional district, she noted that Smith's campaign was clearly "capitalizing on an opportunity to ride the student loan angst wave that seems to be cresting."

'The judiciary needs an audit'

Smith's first experience in politics came in 2008 when he worked full-time in fundraising for the presidential campaign of former Senator John McCain (R-AZ).

Towards the end of law school at the University of Maine, he got interested in student loans and why it was so difficult to discharge them in bankruptcy.

While working as a lawyer in New York, Smith volunteered for Hillary Clinton's 2016 presidential. He became a member of the education policy group, contributing ideas about addressing student debt.

In 2016, Smith opened his own law firm to litigate student loans cases. He later wrote about student loans and bankruptcy for the D.C.-based advocacy group the Student Borrower Protection Center.

"The judicial branch is the only branch left where average people can exercise the machinery of the federal government," Smith said, adding that judge turnover is very slow and "the judiciary needs an audit."

Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.

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