My New SCOTUSblog Article on the Loan Forgiveness Cases Currently Before the Supreme Court

The article explains the broader issues at stake in these cases, and why the Court would do well to rule against the administration.

Today, the SCOTUSblog website published my new essay on the loan forgiveness cases currently before the Supreme Court. It's part of a symposium on this litigation. Here's an excerpt:

President Joe Biden's massive student-loan forgiveness plan. Because of the vast sums at stake – estimated at $400 billion or more – the fate of this policy is important in its own right. And if Biden prevails, it would set a dangerous precedent for presidential abuse of emergency powers and usurpation of Congress' power of the purse. In these respects, Biden's plan has much in common with Donald Trump's effort to divert military funds to pay for his border wall…

The Justice Department's legal rationale for the plan relies on a provision of the 2003 HEROES Act, enacted in the wake of the 9/11 attacks, which gives the secretary of education the authority to "waive or modify any statutory or regulatory provision applicable to the student financial assistance programs" in order to ensure that "recipients of student financial assistance … who are affected individuals are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals."

The statute defines "affected individuals" as anyone who "(A) is serving on active duty during a war or other military operation or national emergency; (B) is performing qualifying National Guard duty during a war or other military operation or national emergency; (C) resides or is employed in an area that is declared a disaster area … in connection with a national emergency; or (D) suffered direct economic hardship as a direct result of a war or other military operation or national emergency.  The administration claims most beneficiaries of the loan-forgiveness plan come under D, in the sense that they have suffered "direct economic hardship" as a result of the national emergency of the COVID-19 pandemic…."

But even for "affected individuals," loan forgiveness is permissible only if the pandemic put them "in a worse position financially in relation to that financial assistance." For the overwhelming majority, there is no proof that COVID is preventing them from paying back their loans or even making it significantly harder to do so.

The administration's ultra-broad interpretation of the HEROES Act runs afoul of the Supreme Court's recent rulings on the "major questions" doctrine, which requires Congress to "speak clearly when authorizing an [executive branch] agency to exercise powers of vast economic and political significance." If the statute is ambiguous, courts must presume that Congress have not given the agency the power in question….

Biden's loan-forgiveness plan is not the first time a president has tried to leverage emergency powers to raid the federal treasury for purposes denied by Congress. In 2019, Trump used a dubious emergency declaration to try to divert funds to build his border wall, despite the fact Congress had repeatedly refused to authorize any such expenditure…

Unfortunately, Biden is now trying to repeat Trump's heist on a larger scale, diverting some 40 times more federal funds. As with Trump, the use of emergency powers here is a pretext for achieving an unrelated policy objective rejected by Congress.

Elsewhere, I have explained why Biden's abuse of emergency powers – like Trump's – will probably cause more harm than good…

But, regardless of policy considerations, it is dangerous to allow the executive to hijack the Treasury for projects not authorized by Congress.

If the administration prevails, it will empower future presidents to use emergency declarations to divert federal funds to their pet projects. Unfortunately, it is very easy for the president to declare an emergency under the National Emergencies Act, and there is a vast array of spending that could be tapped under the highly permissive standards advocated by the administration in this case. No one person should have unilateral control over the nation's public funds. Even if you trust Biden with such power, you likely do not have similar faith in whoever the next Republican president might be.

In addition to the substantive questions at issue, the cases also involve standing issues, about which I have written here, here, and here.

Comments

[ReaderY]

It looks like the COVID emergency is likely to be declared over before the Supreme Court will decide, and possibly before it will hear, the issue.

Would its end moot the dispute? Could the Supreme Court simply dimiss the writ of certiorari, leaving the lower court’s stay untouched?

I think Professor Somin is right on the merits if they are reached. However, I am very skeptical that the plaintiffs have standing to sue.

[Rossami]

No because the Biden administration is still arguing that their loan forgiveness is authorized by the past emergency. The required connection, in their argument, is that the borrower "suffered hardship" as a result of a national emergency. There is no requirement that the national emergency still be ongoing. Ending the declaration of emergency will not moot this case.

But, yes, the SCOTUS could simply dismiss as improvidently granted for whatever reason they like (or no reason at all).

[Kazinski]

I certainly hope Speaker McCarthy either has plans in place to join the lawsuit, or immediately file suit should the current suit be dismissed in standing grounds.

I don't think there is any doubt that the House itself has standing.

[Voize]

I don’t think there is any doubt that the House itself has standing.

Standing, perhaps, but there are other justiciability hurdles.
A House lawsuit could still fail as a political question, following Rehnquist's plurality in Goldwater v. Carter that the courts should stay out of power struggles when

we are asked to settle a dispute between coequal branches of our Government, each of which has resources available to protect and assert its interests, resources not available to private litigants outside the judicial forum

[EscherEnigma]

Ah yes, the "major questions" doctrine, which, as befits such a noble and well-defined doctrine, is found in our Constitution, and if failing that, at least in legislation.

That mockery aside, the complaint that Congress is giving the Exectutive too much rope is comical. If Congress gives the Executive a whole mess of rope and doesn't like how it's using said rope, Congress can can legislate more. The courts deciding that they get to tell Congress when the rope is too much, is itself usurpation of Congress's appointed authority. That the courts had to invent a "doctrine" to do this should have been a give-away that this is bullshit.

[Kazinski]

The major questions doctrine is firmly rooted in 3 complimentary provisions of the constitution:

Article 1-"All legislative Powers herein granted shall be vested in a Congress of the United States."

"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law"

Article 2 - "he shall take care that the laws be faithfully executed".

[Sarcastr0]

Penumbras ahoy!

[Michael P]

It's not exactly a penumbra to expect that "faithfully executed" means applying statutory text as written, rather than bending it to -- or past -- the breaking point. In this case, regarding whether someone is in a worse financial situation, and thus arguably eligible under the law.

[Sarcastr0]

Major Questions is about going beyond the plain meaning of the text.
Otherwise it’d just be textualism.

[Michael P]

Your comment would make sense if there was no ambiguity in language.

[Sarcastr0]

These are statutes not the Constitution.
Major Questions overrides the usual practice of textual interpretation based on a subjective trigger of bigness in the court’s judgement.

There could be something to it if courts ever decided to add something to it. As it is it’s acting like special pleading.

[Joe_dallas]

Sarcastro – Not sure why you need a basic 8th grade civics course – though I am going to repost Kaz’s statement for your benefit

Kazinski 17 hours ago Flag Comment Mute User The major questions doctrine is firmly rooted in 3 complimentary provisions of the constitution:

Article 1-“All legislative Powers herein granted shall be vested in a Congress of the United States.”

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law”

Article 2 – “he shall take care that the laws be faithfully executed”.

You mention textualism – If the text doesnt mention it, then it means congress didnt enact it. Again basic constitutional concept!

[M L]

There's no "penumbras" at issue. I'm not sure about the "major questions" doctrine, but to the extent it seems like a departure from the text, it's because it tries to accommodate a certain amount of transferring of the power to make laws in violation of the Constitution, but not too much.

[M L]

Correct. And the legislative power is non-assignable. It is the power to make laws, not to make lawmakers.

As Locke put it:

"The Legislative cannot transfer the Power of Making Laws to any other hands. For it being but a delegated Power from the People, they, who have it, cannot pass it over to others. . . . The power of the Legislative being derived from the People by a positive voluntary Grant and Institution, can be no other, than what the positive Grant conveyed, which being only to make Laws, and not to make Legislators, the Legislative can have no power to transfer their Authority of making laws, and place it in other hands."

[Joe_dallas]

EscherEnigma 17 hours ago
Flag Comment Mute User
Ah yes, the “major questions” doctrine, which, as befits such a noble and well-defined doctrine, is found in our Constitution, and if failing that, at least in legislation.

The "major question doctrine " may be a crappy name - though the constitutional principle remains valid - the executive branch cant spend money congress did not authorize. The executive branch cant create law. Basic constitutional principle.

[Krayt]

In these respects, Biden's plan has much in common with Donald Trump's effort to divert military funds to pay for his border wall…

Which people warned about as Trump forged onward. Quelle surprise.

We don't need something called "major questions doctrine". We need merely recognize the constitutional design principle of denying the weasely power hungry from doing things without authorization.

Spend $600 billion

So can get extra votes

So can remain in power

So our personal fortunes can continue upward at vast multiples of our government salaries

Great deal! Corruption for money in our pocket at vanishingly small fractions of a penny on ths dollar!

I'd burst into tears like Jesse Pinkman screaming, "They can't keep getting away with it!" except we know they will.

Fundamental theorem of government: Corruption isn't an unfortunate side effect of the wielding of power. It is the purpose of it from day one.

Century 1

Millenia 1

Ever since some guys picked up sticks and wandered down to a dirt crossroad and demanded trading farmers pay their fair share.

[Krayt]

The most honest guy I ever met said, a long long time ago, well, so what? That's a small price to pay for doing the right thing.

[Sarcastr0]

You found someone who agreed with your narrative. Congrats.

Your market worship still sucks.

[Kazinski]

The law of supply and demand is the most immutable of all natural laws.

It's no accident that in countries that have lived under communism a capitalist market economy is the most popular. Vietnam views capitalism more favorably than any other country with China at #4, as measured by this question:
"Most people are better off in a free market economy"
Vietnam. 95% agree
Bangladesh 80%
South Korea 78%
China 76%
.
.
.
US 70%

It's also worth noting Bangladesh, one of the poorest countries in the world is in 2nd place, because the poorest people in the world see capitalism as their only hope. There are also 3 African countries in the top 10.

https://qz.com/394732/vietnam-overrun-by-communists-40-years-ago-is-now-the-no-1-fan-of-capitalism-on-the-planet

[Sarcastr0]

Krayt: Corruption isn’t an unfortunate side effect of the wielding of power. It is the purpose of it from day one.

He somehow doesn't think this applies to unregulated markets.

You argue against my objection as though there is no middle ground between 'all government is bad' and 'institute full price controls now.'

I like capitalism. No better engine for innovation. I don't know if I think supply and demand is as inviolate as you do (people are not homo economicus), but by and large markets are a good default, provided conditions are set up so they do not run-away.

[ReaderY]

Ever read “Nickel and Dimed to Death?” If the law of supply and demand was less easily violable, there wouldn’t have been periods of labor shortages with no wage increases because employers collectively just didn’t think low-wage workers were worth more and were willing to go without rather than break social solidarity. On the other end, luxury brands of nof much better real quality than cheaper brands wouldn’t flourish as much as they do if lots of people didn’t believe more expensive equals better.

The law of supply and demand may be inviolable in your head, but it doesn’t do a very good job of explaining how real people hehave in real economic situations. In the real world, it’s about as inviolable as speeding laws.

[F.D. Wolf]

Again, Somin tries to draw an equivalence between Trump's attempt to transfer $3.6 billion of money already appropriated by Congress to Biden's attempt to hand the taxpayers a bill for $500 billion that Congress has not appropriated in history's greatest transfer of wealth from the poor and working-class to a wealthy Democrat constituency. And I seriously doubt the Supreme Court would have agreed with Somin's assessment that Trump's action constituted an "abuse", but the case was mooted.

[rloquitur]

Somin believes in illegal immigration--he therefore will criticize anyone that tries to combat it, whether the criticism is fair or not.

I truly believe that the states don't have standing. But this forgiveness is truly awful.

[Kazinski]

That Biden's only hope of winning is a standing argument shows how morally bankrupt this administration is:
'Of course it's illegal, but our strategy is to keep the courts from deciding the issue until we've wiped out the debt'.

I think that makes his student loan forgiveness and impeachable offense.

[Sarcastr0]

Impeachable? How inconsistent with the defenses of Trump back in the day!

[Stephen Lathrop]

But even for "affected individuals," loan forgiveness is permissible only if the pandemic put them "in a worse position financially in relation to that financial assistance." For the overwhelming majority, there is no proof that COVID is preventing them from paying back their loans or even making it significantly harder to do so.

How could a typical 2004–2005 college graduate even hope to meet such as standard? Their lives have been blighted for so long by the economic conditions they graduated into that even Covid couldn't do much to make it worse.

[Stephen Lathrop]

The major questions doctrine is just SCOTUS FOMO. It was invented to give them an all-purpose tool to get into partisan policy making. The notion that something big could happen with no SCOTUS oversight made them itch.

[Kazinski]

Nah, that was living constitutionalism.

[Joe_dallas]

Stephen Lathrop 14 hours ago
Flag Comment Mute User
The major questions doctrine is just SCOTUS FOMO. It was invented to give them an all-purpose tool to get into partisan policy making.

Only the term/phrase was invented.
All the major question doctrine really states is follow the constitution, respect the separation of powers and the president cant make new law- not a hard concept.

[Sarcastr0]

This doctrine isn't about separation of powers - it says some statutes get special scrutiny when the Court decides they should.

[Joe_dallas]

Cutting through all the rhetoric - it is exactly about the separation of powers - the executive branch cant spend money not authorized by congress
The executive branch cant make law.

Plain and simple concept

[Sarcastr0]

"the executive branch cant spend money not authorized by congress" is true of EVERY statute.

You're not cutting through the rhetoric, you're mischaracterizing the doctrine at issue.

[Joe_dallas]

Sarcastro - read the second limitation I stated - The executive branch cant make law.

Cutting through the rhetoric - the executive branch cant make law that congress hasnt spoken to.

Again simple constitutional concept

[Sarcastr0]

The executive branch cant make law that congress hasnt spoken to Also true of *every statute*

[Joe_dallas]

Exactly - you are starting to grasp the fundamental constitutional concept!

cutting through the rhetoric, the major question doctrine says that the executive branch cant spend money not authorized by congress nor enact laws.

Scotus could have used a different term or been more blunt - but the bottom line concept is basic constitutional law and separation of powers.

[Sarcastr0]

The major question doctrine does not apply to every statute.

And yet it is instantiating a separation of powers requirements that apply to all statutes.

Explain the contradiction.

[Joe_dallas]

Sarcastr0 17 mins ago
Flag Comment Mute User
"The major question doctrine does not apply to every statute."

Sarcastro - Why are you having such a major problem following the discussion?

Scotus has invoked the major question doctrine when the executive branch spends money congress has not authorized or when the executive branch tries to create laws not enacted by congress.

[Sarcastr0]

Joe, you didn’t respond to my question.

I’ve been quite patient with your cut-and-paste bullheadedness of repeating grade-school law and pretending that was my concern.
Now we are inescapably down to why your comments have never been on point.

Engage with the question – if the Major Questions Doctrine is just instantiating separation of powers requirements, then why does not apply to all Congressional appropriations?

[Joe_dallas]

Sarcastr0 1 hour ago (edited)
Flag Comment Mute User
Joe, you didn’t respond to my question."

Sarcastro - why are you still having a problem following the discussion - you are the one that made the following statement

Sarcastr0 5 hours ago
Flag Comment Mute User
"Major Questions is about going beyond the plain meaning of the text.
Otherwise it’d just be textualism."

My responses have all addressed the fallacy of your original comment and the inaccuracy/deception of your original statement.

[Sarcastr0]

You still have not answered my question.

Congressional intent to appropriate funds is conveyed via text. Anything not in keeping with the text and intent is not in keeping with seperation of powers.
True enough. Elementary, even.

*This is true of all appropriations bills.*

The Major Question Doctrine *does not* apply to all appropriations bills. Therefore it is not just from the text, it is not just separation of powers.

[Joe_dallas]

Sacastro - You still cant follow the original question
At least 4 others have pointed out your error .

In order to deflect for your misrepresentation of your original statement, you changed the question to one that is not applicable to your error.

Follow the original discussion

[Dr. Ed 2]

"In these respects, Biden’s plan has much in common with Donald Trump’s effort to divert military funds to pay for his border wall"

Let's talk about two historical equals.

First, when we pulled out of Vietnam in 1973, we promised South Vietnam that we would provide whatever was necessary for them to defend themselves -- and the North promised not to invade. 1974 was a Democrat landslide and hence Gerry Ford couldn't get any money allocated in 1975 for ordinance for South Vietnam.

This not only led to the North invading but doing so with such rapidity that we wound up with this photo: https://static.theprint.in/wp-content/uploads/2021/08/Vietnam.jpg -- and the TV footage that gave me nightmares as a child, helicopters (with rotors still moving) being tossed off the deck of an aircraft carrier because the deck space was needed for inbound helos behind them.

Ford could have sent ordinance from other US stores -- he could have ordered aircraft on the carrier (or land-based B-52s) to bomb the advancing NVA tanks which would have at least slowed them down a lot. He didn't.

Jump ahead a dozen years and we have Iran Contra -- Congress had passed the Boland Amendment which precluded funding the Anti-Communist Rebels in Nicaragua so Ollie North came up with the idea of selling weapons to the Iranians (who were in a war with Iraq) and using the markup to fund the Contras. (That's how we wound up with Justice Kennedy, but I digress...)

This was at the height of the AIDS crisis, and Reagan wasn't anywhere near as homophobic as people like to paint him -- he was from Hollywood and (by the standards of the times) incredibly gay friendly.

But what if he'd used AIDS as an excuse to fund the Contras. What Joe BiteMe is doing here strikes me as the same thing....

[Dr. Ed 2]

More photos: https://www.warhistoryonline.com/vietnam-war/why-the-us-dumped-helicopters-overboard-during-the-vietnam-war.html?firefox=1

[Lee Moore]

Stipulating, for amusement only, that :

(1) the feds have no legal authority to waive the loans, but
(2) no one has standing to challenge the waivers in court

what is the legal position of the debtors if some future incarnation of the federal government tries to collect on the loans, arguing that they were never in fact waived ?

And does it matter if the debtors were or were not put on notice at the time of the waiver that the power of the feds to waive the loans was disputed ?

[Michael P]

Those debtors have a reliance interest, of course. Any leftist policy can be made judicially impregnable against future cuts by establishing a reliance interest. Just ask Justice Kagan.

[Sarcastr0]

Do you deny that there would be a reliance interest?
Not do you just not like where the logic goes, and thus blame the libs?

[Lee Moore]

I was hoping for a little more detail on this reliance issue question - hence the bit about the debtors being on notice.

Perhaps I could pose what seems to me to be a clearer case :

1. Congress declines to increase the debt limit
2. On the President's instructions, the Treasury goes ahead and issues more debt anyway
3. People buy the debt
4. 10 years hence, the Treasury (under new management) refuses to repay the debt on the basis that it was illegally issued
5. The debtors sue, crying "reliance interest !"

Do they win ?

[M L]

Correct.

For example, if you are Ilya Somin:

Step 1. Argue DACA is constitutional because a future President can easily reverse it at any time.

Step 2. Argue DACA cannot be reversed.

Step 3. Courts block President Trump from reversing DACA during his entire term. And then of course SCOTUS squeaks out a "very narrow!!" decision preserving DACA right before the end of his term.

[Sarcastr0]

Nothing you discussed seems to be about the Constitution.

[Michael P]

That's because you don't see much down in that coal mine with a bag over your head. Escher pretended -- badly -- that judicial doctrines are expected to be invoked directly in the constitution or statutes. Practically the only time they are is to override them; when a doctrine is directly supported by constitution or statute, we call it something besides a judicial doctrine.

mad_kalak's comment directly addresses Escher's second paragraph, if you had bothered to read that far.

[Sarcastr0]

His comment is a policy argument based on an anecdote.