Win Or Lose, Executive Actions Like Student Debt Cancellation Should Face Judicial Review


The Supreme Court will hear oral arguments this week on the constitutionality of President Biden’s attempt to cancel up to $20,000 in student loans per borrower via executive action last year. Many proponents, including the Biden administration itself, have argued that not only is the move itself legal but that it is wrong for the courts to even entertain the pending challenges to its legitimacy. Whether one thinks the plan itself is lawful or not, everyone should be grateful that the courts are so far rejecting this argument and taking a serious look at the merits of the plan itself because failure to do so could have catastrophic long-term implications.

The Biden administration says that it has the authority to grant mass debt cancellation under the HEROES Act: a law passed in 2003 that gives the Secretary of Education authority to adjust the terms of any loan it holds during national emergencies. The law was introduced to make it easier to discharge debt for victims of terrorism and veterans who were injured or killed fighting the War on Terror, but the Biden administration argues that the law’s text gives them broad discretion to provide relief for anyone who lived through the COVID-19 pandemic.

Several lawsuits claimed this broad interpretation was an abuse of the HEROES Act authority that went well beyond Congress’s intent in passing the law. The answer to this legal question has serious implications for our constitutional system, which entrusts Congress with the power of the purse. If allowed to proceed, Biden’s debt cancellation move would cost taxpayers over $400 billion. That would be one of the biggest expenditures of public funds without explicit Congressional appropriation.

But in responding to these lawsuits, the administration didn’t just argue that courts should uphold the constitutionality of this move on the merits — they took it a step further and said that courts couldn’t even review the policy because nobody who filed suit had standing to do so. To have standing, a plaintiff must be able to demonstrate concrete injury and the administration argues that nobody is being harmed by the policy. Although there is clear injury to taxpayers who have their money being redistributed without explicit Congressional approval and all people who suffer from the inflationary effects of excessive spending in an overheated economy, precedent generally denies ordinary citizens standing to sue on such grounds.

Nevertheless, a series of lower court rulings have concluded that some individuals and entities who filed suit did have standing for different reasons — and none have ruled in favor of the administration on the merits of their plan. Regardless of whether one supports the student debt cancellation as a matter of policy or not, it is unquestionably good news that courts are finding some plaintiffs have standing to sue. The Supreme Court should back them up. A finding that nobody has standing to challenge such a sweeping executive action would open a fiscal pandora’s box that in many ways it would be a greater setback to progressive priorities than overturning this one executive action.

For example, there was a big push by conservatives to have President Trump unilaterally exclude the growth in assets attributable to inflation from the basis of capital gains taxes. This change would result in a huge tax cut for the ultra-rich as they own a disproportionate share of the assets that generate capital gains. Trump had no authority whatsoever to make such a change without Congress — it would have been on even shakier legal ground than Biden’s debt cancellation. But so what? It would be as hard, or maybe even harder, to find someone who can demonstrate a specific harm from this tax cut as it is to find someone harmed by student debt cancellation.

What is to stop a president from executing any blatantly illegal or unconstitutional act if the courts are never willing to consider a challenge to it? Taken to the extreme, a future Republican president could decide to just not collect any tax they disagree with.

Although he ultimately didn’t pursue this tax-cut scheme, Trump did make a last-minute push in late 2020 to send all Medicare beneficiaries a $200 rebate card to purchase drugs at taxpayer expense – a legally dubious attempt to boost his support among seniors just before voters threw him out of office. Fortunately, his administration began this brazen vote-buying effort too late for it to be executed in time for that year’s election. But if the Supreme Court accepts the Biden administration’s argument that nobody has standing to challenge the student debt cancellation, another administration that’s as corrupt as Donald Trump’s might be successful in the future.

Creating a loophole for limitless spending and tax cuts through executive actions by concluding nobody has standing to challenge them would be catastrophic for both fiscal sustainability and our general system of government. The onus for guarding against such excess primarily falls on Congress, which must be more protective of its power of the purse and narrowly precise in how it delegates this authority to the executive branch than it was when it passed the HEROES Act. But our Constitution relies upon a system of checks and balances, and no matter how tightly Congress writes laws, they will do nothing to limit a defiant administration if the courts refuse to entertain challenges when the executive pushes those boundaries.

No matter how the Supreme Court rules on the merits of Biden’s student debt cancellation, it’s essential that the court ensures the merits of this act and others like it are at least being evaluated through judicial review by making a clear determination that someone has standing to challenge it.

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