Can limits be found even to an emergency? Can the Constitution’s tripartite division of federal powers withstand the blows and novel respiratory viruses that history lobs at us from time to time? Can they withstand the enterprising legal justifications of an administration that lacks the support of Congress?
Mercifully, the Supreme Court answered “yes” to all the above when it said “no” to the Biden administration’s bid to cancel over $40 billion in federal student loan debt in the waning hours of the COVID-19 pandemic. On Friday, in Biden v. Nebraska, the court held that the administration lacked authority to unilaterally erase millions of student loans.
In August 2022, more than two years after the novel coronavirus sent us all scurrying for cover, President Joe Biden announced that he and Secretary of Education Miguel Cardona would address the effects of the pandemic by invoking a little-known statute, the HEROES Act, to cancel the federal student debt of certain deserving borrowers. As it turned out, over 40 million borrowers qualified at an aggregate price of $430 billion all under the auspices of a statute meant primarily to ease burdens on active-duty soldiers.
This prompted questions. For instance, how had college graduates, a demographic which then had only 2% unemployment, been affected financially by the pandemic? Why was this species of relief announced well after the pandemic’s worst effects but suspiciously close to a midterm election? Speaking of suspicion, why did this relief mirror a Biden campaign promise in every relevant particular? Answers were not forthcoming.
States and nonprofits often respond to this sort of executive action like runners to the crack of a starter’s pistol, racing off to federal court to challenge the executive’s assertion of authority. But in this instance, a legal doctrine known as standing posed an obstacle.
To have standing to sue, would-be litigants must identify a concrete injury traceable to the action they seek to challenge. Private loan servicers would have standing, but they weren’t suing. Meanwhile, several groups forged ahead on standing theories that could charitably be described as “doomed.” Their cases fell never to rise.
Standing remained such a substantial obstacle that it tripped up plaintiffs in one case even as the court decided the final merits of cancellation in another. In Department of Education v. Brown—a case argued the same day as Biden v. Nebraska—the court unanimously held that two borrowers seeking greater debt relief could not trace their injury to Biden’s use of the HEROES Act. Therefore, they lacked standing, and the court dismissed their challenge.
But things stood differently in the Nebraska case. There, Chief Justice John Roberts, writing for a six-justice majority, held that at least one of the six states, Missouri, had standing because it founded and funded an entity, “MOHELA,” that was paid to service federal student loans. MOHELA would lose money because of the canceled loans, and because MOHELA was Missouri’s “instrumentality,” its financial injury could be attributed to the state.
Proceeding to the merits, Roberts rejected the argument that the power to “waive or modify” laws conferred by the HEROES Act enabled the education secretary to create a “novel and fundamentally different loan forgiveness program” more to the president’s liking than Congress’.
The waiver and modification powers, whether read singularly or in tandem, did not enable the secretary to “draft a new section of the Education Act from scratch by ‘waiving’ provisions root and branch and then filling the empty space with radically new text.” Yet, that was effectively what the secretary had done when he issued his cancellation plan as “modifications” to the student loan program. This went well beyond HEROES’ boundaries.
The case’s seriousness did not prevent justices in the majority from coming up with some humorous analogies. Roberts channeled the late Justice Antonin Scalia when he mused that the “Secretary’s plan has ‘modified’ the cited provisions only in the same sense that ‘the French Revolution ‘modified’ the status of the French nobility’—it has abolished them and supplanted them with a new regime entirely.” This is always a great citation, though I’d prefer if Roberts refrained from giving progressives ideas on how to handle the opposition.
The secretary maintained that his plan complied with the HEROES mandate to ensure that borrowers were made no worse off by an emergency. In her concurring opinion, Justice Amy Coney Barrett obliquely compared this view to a babysitter, who upon being charged ensuring that “the kids have fun,” then proceeds with “the kids on a road trip to an amusement park, where they spend two days on rollercoasters and one night in a hotel.” In other words, the secretary had taken things too far.
The dissenters—Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson—were decidedly less jocund in tone. They criticized the majority’s analysis both on standing and the merits.
Kagan, author of the lone dissent, maintained that the majority intruded on the prerogatives entrusted by the Congress that drafted HEROES to the presidential administrations that invoked it in times of emergency.
She took particular issue with the majority’s use of the major questions doctrine to bolster its reading of the HEROES Act. That doctrine holds that novel, consequential assertions of agency power must be clearly authorized by Congress.
Kagan argues here, as she did last term in West Virginia v. EPA, that the doctrine is an a-textual, judge-made constraint on Congress’ ability to delegate tasks to experts in the executive branch.
The majority was careful not to rely directly on the major questions doctrine, deploying it in belt-and-suspenders fashion only as an adjunct to its statutory analysis. Still, the scale and novelty of Biden’s cancellation plan virtually ensured that the doctrine would make an appearance.
Per Roberts, cancellation “amounts to nearly one-third of the Government’s $1.7 trillion in annual discretionary spending. There is no serious dispute that the Secretary claims the authority to exercise control over ‘a significant portion of the American economy.’”
No cancellation of this magnitude had ever been set in motion, let alone without any direct input from Congress. Is it plausible that Congress meant to authorize this some 20 years ago when it drafted the phrase “waive or modify”?
As Barrett explained, “commonsense principles of communication” should lead us to answer no because “an initiative of this scope, cost, and political salience is not the type that Congress lightly delegates to an agency.” That is a view we should take seriously. For pretensions to vast power will continue to assert themselves as well-intentioned responses to the next emergency on the horizon.
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