In 2019, then-President Donald Trump used a questionable emergency declaration to try to divert funds to build his border wall, despite Congress repeatedly refusing to authorize such spending. . As I wrote at the time, Trump’s declaration of emergency was false because there was no real emergency, the relevant laws did not give him authority to transfer military funds even if he could declare an emergency, use eminent domain to build a border wall would cause serious harm Americans as well as migrants, and Trump’s actions could set a dangerous precedent, if upheld. Liberal Democrats also condemned Trump’s border wall hijacking, citing many of those same considerations. Then-candidate Joe Biden was one of them.
Several court decisions have ruled against Trump on the merits (see my analysis here and here), although other courts have dismissed challenges to the border wall hijacking for procedural reasons. In the end, the problem was solved when President Biden ended border wall hijacking when he took office, and Congress enacted legislation preventing future such shenanigans.
Unfortunately, President Biden’s recent decision to cancel up to $600 billion Student loan debt for borrowers earning up to $125,000 a year ($250,000 for married couples) has a lot in common with Trump’s border wall hijacking. He is also using a dubious assertion of emergency powers to circumvent the purse power of Congress to promote harmful policy that the president could not otherwise have passed. As Elisabeth Goiteingreat liberal specialist in emergency powers, underlines in the Washington Postin both cases, the president was using emergency powers to “bypass Congress, when Congress considered a course of action and rejected it”.
As a policy, Biden’s loan cancellation plan is just as dodgy as Trump’s border wall. It’s probably be a huge waste of resources at a time when we are already facing an impending fiscal crisis. It’s very regressive (especially if, as a progressive Washington Post columnist Katherine Reminder points out, you’re considering the beneficiaries’ likely lifetime earnings, as well as their current earnings). Economist Jason Furman, former chairman of President Obama’s Council of Economic Advisers, says it will make inflation worse. It also creates perverse incentives for universities and prospective students, both of whom will face less pressure to reduce already inflated education costs. For these reasons, the liberal left Washington Post editorial board is right to denounce the cancellation of the loan like a “regressive and costly mistake.”
Like Trump’s plan to build walls, Biden’s loan forgiveness plan is a policy favored by the president’s base, but likely to inflict serious harm on innocent people for no good reason. In one case, the victims are landowners and migrants. In the other, taxpayers and low-income workers suffer from inflation.
Biden, however, managed to outdo Trump in the scale of his raid on the Treasury. As the “old guy” (as Biden calls him) sought to hijack about 10 billion dollars at the Pentagon and drug interdiction funds at the border wall, Biden’s loan forgiveness plan exceeds that sum many times over, possibly disbursing up to $600 billion. Biden makes the executive’s usurpation of congressional purchasing power great again – in fact, even greater than under Trump!
To be sure, Trump’s plan could have been even worse, considering the nonmonetary costs, such as losses to landlords and migrants, as well as costs to the Treasury and taxpayers. But it’s damning Biden’s plan with very low praise, indeed.
The legal rationale for Biden’s plan also rivals Trump in his false reliance on emergency powers. The Ministry of Justice legal justification because the plan is based on A provision of the HEROES Act of 2003, enacted in the wake of the September 11 attacks, which gives the Secretary of Education the power to “waive or vary any law or regulation applicable to student financial assistance programs” in order to ensure that, such as following a war or national emergency “recipients of educational financial assistance under Title IV of the the act which are persons concerned are not placed in a more unfavorable financial situation in relation to this financial assistance because of their status as persons concerned.”
The statute defines “affected persons” as any person who is “(A) is on active duty during a war or other military operation or national emergency; (B) is performing eligible 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 by a federal, state, or local official as part of a national emergency; or (D) has suffered direct economic hardship as a direct result of war or other military operation or national emergency, as determined by the Secretary.” The administration’s argument is that most recipients of the Loan Cancellation Plan fall under Category D, meaning where they suffered “direct economic hardship” as a result of the Covid-19 pandemic, the “national emergency” in question.
But, for the overwhelming majority, there is simply no evidence that Covid is preventing them from repaying their loans or even making it much more difficult to do so. As the Washington Post points out, the unemployment rate for university graduates is only 2%. Only a small minority of loan recipients have actually experienced anything like “economic hardship” sufficient as a result of Covid to significantly affect their ability to repay their loans.
The HEROES Act could reasonably be interpreted to allow the administration to reduce the loan burden of borrowers who have suffered prolonged unemployment during the pandemic or whose work capacity has been severely impaired by illness. But that falls short of giving it the power to indiscriminately cancel loans for large numbers of people, most of whom cannot plausibly claim to be unable to repay their loans because of Covid, or even that Covid their made the task much more difficult. then.
In reality, the administration’s emergency justification here is blatantly pretense, much like Trump’s emergency supply justification for the border wall hijacking. Under the pretense of dealing with the Covid emergency, Biden is seeking to achieve a long-standing leftist political goal he was unable to get through Congress. Trump tried to do much the same thing, but for the right wing goal of building the wall.
Fordham law professor Jed Shugerman, a progressive sympathetic to Biden’s decision for political reasons, nonetheless dispute with the justification of the backup power supply:
As a progressive deeply disturbed by the Trump administration’s abuse of power and executive power and invoking emergency powers, like building a wall, it now seems too convenient for progressives to adopt the references power of a new president when we were so troubled a few years ago. What’s good for the goose is good for the gander. We should be tired of using emergency powers.
I am not progressive myself. But I too was “deeply troubled” by Trump’s border wall hijacking (which I strongly criticized), and so am I.”tired of using emergency powers.” If we want to stop Trump — or any future GOP chair — from bypassing Congress and plundering the treasury for partisan gain, we also mustn’t let Biden get away with it. shoot like this.
Shugerman points out that the administration’s ultra-broad interpretation of delegated executive power under the HEROES Act runs counter to recent Supreme Court rulings on the “big issues” doctrine, which compels Congress to “speak clearly when he authorizes a [executive branch] agency to exercise powers “of great economic and political importance”. If the law is ambiguous, the courts must presume that Congress has not given the agency the power in question.
The Court recently used the major issues doctrine to strike down questionable uses of Covid-related emergency powers by the Trump and Biden administrations in the CDC’s eviction moratorium and OSHA Vaccine Mandate case. The same logic applies here. The power to write off hundreds of billions of dollars in student loan debt held by people whose claims to be victims of the Covid pandemic are very tenuous, is clearly a power of “broad economic and political significance “. And, at the very least, it’s far from clear that the HEROES Act really gives that power to the executive.
Even if the law were clear on this, such a broad delegation could violate constitutional non-delegation requirements, which limit Congress’s power to transfer legislative powers to the executive. Several recent decisions, including the decision on the vaccine mandatesuggest that the Court might have an interest in reviving non-delegation.
Shugerman and others have argued that the Biden administration should instead rely on Section 432(a) of the Higher Education Act of 1965, which authorizes the Secretary of Education to “apply, pay , impair, waive or discharge any right, title, claim, lien or demand, however acquired, including any equity or right of redemption”, relating to loans authorized by the Federal Direct Lending Program. I will take up this argument in a future post.
So far, the administration does not appear to be backed by this sweeping theory — which would give the executive the power to cancel any federal student loan debt at any time, even absent a national emergency. But that could change if the loan forgiveness program is challenged in court and the rationale for emergency feeding starts to look like a loser.
The loan cancellation plan may not be able to be challenged in court because no one will be qualified to do so. This issue creates another potential parallel to Trump’s embezzlement of border wall funding. The Trump administration has also relied on standing and other procedural arguments to try to prevent courts from considering the merits. Biden may also emulate Trump’s strategy on this point. This is another question that I plan to address in a future article.
For now, I’ll end by reiterating Shugerman’s point about the need to curb pretextual abuses of emergency powers. Those who rightfully objected when the Republican goose did should also condemn similar behavior by the Democratic gander.