Biden’s Bad-Faith Ploy on Student Debt Laid Bare in Court

AMAC Exclusive – By Daniel Berman

There once was a time when liberals worried about executive power. During the Bush years, Democrats raised concerns over the Patriot Act and arguments from the administration that wire-tapping could be done without a warrant. They contested whether the administration could escape the jurisdiction of U.S. Courts and the Constitution by conducting business off-shore in Guantanamo Bay. When Donald Trump was president, they even challenged the president’s undisputed prerogatives such as the right to hire and fire the Director of the FBI or to issue executive orders on immigration on the basis that the president needed a proper rationale for his decisions, and that courts reserved the authority to review those justifications.

When it comes to the authority of Democratic administrations and a Supreme Court they do not like, liberals sing a different tune. That was evident with the Dobbs decision, where the Court handed the power to legislate on abortion back to the states. It was on display with gun control, where the Court allowed state laws to stand. But it was rare to see the liberal justices twist themselves in knots quite as much as they did earlier this week as the U.S. Supreme Court heard oral arguments on whether the administration had the authority to simply cancel up to $400 billion in student debt.

“All this business about executive power, I mean, we worry about executive power when Congress hasn’t authorized the use of executive power.”

So wondered Justice Kagan during oral arguments over whether the administration can use theHeroesAct, a 2003 law which allows the Secretary of Education to “waive or modify any statutory or regulatory provision” related to federal student loans “as may be necessary to ensure that” borrowers “are not placed in a worse position financially” because of a national emergency, to cancel debts entirely. Kagan was almost certainly correct, insofar as if Congress were to authorize the cancellation of student debt and appropriate money toward that end, the Court would be wasting their time hearing any sort of challenge.

In this case however, Congress had appropriated no money, and if it intended for its 2003 legislation to authorize the cancelation of debt for more than 40 million Americans based on economic need, not proven impacts from any sort of emergency, the message managed to elude George W. Bush, Barack Obama, Donald Trump, and until this year, Joe Biden and Nancy Pelosi.

To justify this power grab, the administration has resorted to a level of “textualism” which tests the ability of the hardiest soul to keep a straight face.

To get around the requirement that Congress appropriate money for any expenditure, and the fact that Congress has appropriated a total of $0 for this one, the administration insists it is not actually spending any money at all. The appropriations for the federal student loan program have already been appropriated, they say, and now the federal government is merely waiving its right to future revenue, not making a financial expenditure today. Under this line of thinking, the president would have a right to implement tax cuts without congressional authorization merely by choosing to ”forgo” the revenue.

Second, the administration argues that there is no distinction between suspending the payment on debts for a period of time and cancelation, as cancelation is merely an indefinite suspension. While tautologically true, it seems dubious that Congress, when it passed the Heroes Act in 2003, authorizing the Education Department to aid borrowers in response to national emergencies, intended for that aid to be permanent. By definition, emergencies are temporary. As Justice Kavanaugh noted that historical and fictional tyrants alike have claimed that “emergency powers” can be used to justify anything, and that an emergency can be defined solely as a legal fiction.

Liberal outlets roundly mocked Kavanaugh when he made a historical comparison to President Truman’s efforts to nationalize Steel Mills during the Korean War noting, “Some of the biggest mistakes in the Court’s history were deferring to assertions of executive or emergency power. Some of the finest moments in the Court’s history were pushing back against presidential assertions of emergency power.”

Justice Kavanaugh could have chosen a more forceful analogy. The internment of Japanese-Americans during World War II by the administration of Franklin Delano Roosevelt was upheld by the Supreme Court in Korematsu v. U.S.(1944). The basis was that the Second World War qualified as an emergency, and in an emergency the administration was entitled to take actions it felt were necessary to protect the country. It was not the place of the Court, so the 1944 majority claimed, to assess whether a measure in question was in fact necessary, merely to defer to the judgement or assertions of the executive branch that it was.

Justice Sonia Sotomayor echoed this reasoning when she suggested that the problem was the Court reviewing the issue at all. “What you’re saying is now we’re going to give judges the right to decide how much aid to give them,” Sotomayor asked, apparently temporarily befuddled by the concept of judicial review. She proceeded to say that the decision should lie with “the person with the expertise and the experience, the Secretary of Education, who’s been dealing with educational issues and the problems surrounding student loans,” lamenting that the court was “going to take it upon ourselves” to evaluate these judgments.

One of the weaknesses of the Biden administration’s argument is that if this decision is truly based on an emergency, it has not even taken action to aid all of those holding federal student loans. While plenty of ink has been spilled over the unfairness of the policy—which forces those who never attended college, did so without requiring loans, or rapidly paid theirs in full, to subsidize debt forgiveness for others—less has been focused on how it does not even apply to all of those who hold federal student loans. Borrowers must have earned below $125,000 individually or $250,000 collectively to qualify for relief.

While there may be policy arguments for means-testing relief, it is unclear how selective relief can be justified on the basis of a COVID emergency. A tenuous argument might be made that if individuals could prove they lost work from COVID-19 a link could be established, but in this case, the administration is implementing loan forgiveness in the guise of emergency relief on the basis of factors unrelated to the emergency, namely, income. This is like an administration funding port improvements in Portland, Maine, using relief funds for a hurricane in Florida under the premise of temporarily reduced port capacity in Tampa.

All of this is to say that regardless of the merits of the U.S. higher education system, or whether that system is predatory (which it is), or if the federal student loan program enables that predatory behavior (which it does), the administration’s arguments are at once absurd and dangerous. Absurd, because they contradict prior positions of virtually everyone who is making them and fail basic tests of logic. Dangerous, because if accepted, they would turn the United States into Nicaragua or Venezuela, where the constitutional courts can find that any restrictions whatsoever on the president’s powers, such as limits on reelection, violate their “individual political rights as a citizen.”

It is unclear whether the administration even plans to win. Their messaging, and that of Democrats as a whole, seems geared towards turning this into yet another instance of an “out of control, activist, conservative court, overturning the will of the people,” in this case by preventing millions of them from receiving free money. This was the argument Sotomayor closed on in any event. “There’s 50 million students who … will benefit from this who today will struggle,” she declared (contradicting her own earlier declaration that “It’s not a question of money. It’s a question of Congress’ intent”).

That in short, will be Biden’s message and that of the Democrats in 2024. It was the message of the State of the Union and it was the message Sotomayor closed on in the court. Democrats stand for giving you money. Republicans exist to take it away. Democrats will promise to do a host of things. Republicans will stop them. If they do not happen, it is not because we could not afford them or because Democrats never really intended to do them in the first place, or knew they were unconstitutional. Rather, it is because Republicans stopped them. In fact, the Biden administration seems to be concluding that it is better to issue executive orders and file lawsuits that will fail, and propose legislation with zero-chance of success, precisely because it gives them the benefits of the promise without the costs of delivering.

This is not serious, principled government. It is demagogic Caesarism. The country deserves better. Those struggling with student debt deserve more than being used as political tools. At the very least, they deserve the truth.

Daniel Berman is a frequent commentator and lecturer on foreign policy and political affairs, both nationally and internationally. He holds a Ph.D. in International Relations from the London School of Economics. He also writes as Daniel Roman.