Biden’s slapdash, election-season student loan gambit may be in trouble
WASHINGTON The Pacific Legal Foundation, libertarian litigators with no shortage of things to litigate against, might have found the key to unlocking a courthouse door. If it has, President Biden’s slapdash, electionseason, $500 billion (at least, over 10 years) student-loan forgiveness might be found illegal and unconstitutional.
Its grossest flaw is forgetfulness regarding the Constitution’s appropriations clause, which — in case it has slipped your mind, as it evidently has Biden’s — says: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”
How else does student-loan forgiveness violate statutory and constitutional law, and justice? Let us count the ways.
It transfers wealth upward to a mostly affluent minority — college graduates, who have higher projected lifetime earnings (on average, nearly $1 million higher) than the nearly two-thirds of Americans without college degrees who will pay, as taxpayers, to improve the financial condition of college graduates. Forgiveness is unjust to students who took jobs and scrimped to avoid accumulating education debt. And to those who repaid their debts. Forgiveness creates moral hazard: Future students will borrow in anticipation of future forgiveness. Forgiveness draws arbitrary distinctions: Why is student debt a more pressing problem than, say, consumer or auto or mortgage debt?
Biden’s half-trillion-dollar forgiveness expenditure will dwarf the postulated $248 billion in savings from the whimsically titled Inflation Reduction Act. In a delightful understatement, the New York
Times says that when administration officials claim the forgiveness is “paid for” because tax revenue is higher than was projected, this “defies traditional budget accounting conventions.” If revenue increases by an unanticipated sum of at least X, a new program spending X costs nothing? Who knew?
Although the Supreme Court has admonished the executive branch that Congress does not hide elephants in mouseholes, Biden purports to have found an enormous pachyderm — authorization for his $500 billion program — nestled in the 2003 Heroes Act. It allows executive action modifying student loans during wartime (e.g., 2003) or other “national emergency.” Nowadays, emergencies exist when presidential caprice proclaims one. Under the 2003 act, student borrowers are heroes. Talk about defining virtue down.
The forgiveness policy was produced, without statutory warrant or regular public notice and comment procedures. As a Pacific Legal Foundation attorney says, Biden has created “a $500 billion program by press release.”
The program’s flaws provide what the military calls a target-rich environment. But because of the Supreme Court’s rules about who has “standing” to sue — rules that should be liberalized — a mere citizen cannot sue even though Biden’s forgiveness cornucopia injures the citizen’s financial well-being, and the structure and processes of the citizen’s government.
The PLF has, however, found among its attorneys one who would experience a concrete injury from Biden’s forgiveness. He lives in Indiana, where, as in at least six other states, forgiven loans may be taxed as income. He says he will be economically injured by cancellation of his particular loan payments. Biden’s minions might try to derail PLF’s litigation by creating for the Hoosiers and others similarly situated a way to opt out of what otherwise will be automatic forgiveness.
If, however, the PLF can establish standing for a plaintiff, it will argue, inter alia, the applicability of the “major questions” and “nondelegation” doctrines. The former holds that when the executive branch claims a power to order social changes with vast economic or political consequences (e.g., the Centers for Disease Control claiming a power, since overturned, to impose a nationwide eviction moratorium), courts should be skeptical unless legislation clearly and explicitly authorizes the power. It is implausible that, two decades after the Heroes Act was passed to cushion lives disrupted by war deployments, it authorizes Biden’s unilateral expenditure of a sum almost three times larger than the U.S. Army’s 2022 budget.
The nondelegation doctrine holds that Congress may not delegate to the executive branch essentially legislative power. Such as the power to rewrite the Heroes Act to waive statutory requirements incompatible with Biden’s sweeping forgiveness.
Presidents properly wield “emergency” powers not to solve long-standing problems, but only in sudden, unexpected, fastmoving crises, and only until Congress can exercise its lawmaking jurisdiction. Biden, however, announced his loan forgiveness as an act of executive discretion justified by a law written in response to a terminated emergency, the Iraq War. This law was repurposed to inflate presidential power during the declared pandemic emergency.
But about a month after Biden announced the forgiveness, he said: “The pandemic is over.” Nevertheless, progressives praise all this. Their praise has temporarily interrupted their professions of alarm about endangered constitutional, rule-of-law and democratic norms.