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Right-wing challenge to student debt forgiveness plan heads to Supreme Court

Just months after limiting the EPA’s authority, the justices are being asked to apply the same controversial doctrine to the president’s debt relief program. 

WASHINGTON (CN) — A conservative law firm appealed to the Supreme Court on Wednesday to halt President Joe Biden’s forgiveness plan for student loan debt. 

The application from Brown County Taxpayers Association says the president had no legal authority to forgive student loan debt from tens of millions of Americans. Biden launched the portal only a day earlier for borrowers to apply for debt relief, and the group insists it is entitled to an injunction to keep the plan from going into effect as early as Sunday. 

“It simply cannot be the law that a President can hand out a trillion dollars with impunity,” Richard Esenberg, an attorney for the group with the Wisconsin Institute for Law & Liberty, wrote in the application. 

The group argues that Biden's plan falls under the major questions doctrine, which set the stage for one of the court's most controversial rulings last term. By saying that federal agencies need explicit congressional authorization to take “major” actions that have large economic and political significance, the conservative supermajority of the high court just before summer break curbed the regulatory authority of the Environmental Protection Agency. 

“There is no legal justification for this presidential usurpation of the constitutional spending power, which is reserved exclusively for Congress,” Esenberg wrote. “This step, which is certainly a major question under cases such as West Virginia v. EPA is predicated on a law passed under different circumstances to accomplish different purposes for different beneficiaries.” 

Biden plans to forgive up to $20,000 for certain borrowers, using the Higher Education Relief Opportunities for Students Act of 2003 as justification. The post-9/11 law gives the education secretary authority to waive rules related to student financial aid programs in times of war or national emergency. Biden claims the Covid-19 national emergency put borrowers in a worse financial situation, and forgiving some of their debt will help avoid their fall into an even more adverse financial position. 

Esenberg argues, however, that the bill was meant to assist the military and first responders. Asserting that student-loan borrowers are not disadvantaged, he says they are not entitled to the aid.

“The President has transformed a law designed to benefit military personnel and first responders who have been disadvantaged by their response to a discrete national emergency into a warrant to transfer hundreds of billions, or perhaps over a trillion, dollars in debt onto taxpayers,” Esenberg wrote. “But these student-loan borrowers have not been disadvantaged by their service to the country, or for that matter, anything at all.” 

By using a 9/11 bill to forgive student debt, the group says Biden has created a massive new spending program equal to last year's Bipartisan Infrastructure Act. The group claims the authority Biden uses is “transformational” to the idea of separation of powers and the rule of law. 

“Almost anything can be a national emergency,” Esenberg wrote. “If a President can do this, then he will have been transformed into an officer who not only executes the law but also makes it.” 

Throughout his application, Esenberg refers to the 2003 law as the Heroes Act, an imprecise acronym made all the more confusing because it is the acronym given to the unrelated relief bill that Democrats put forward in response to the coronavirus pandemic.

The Brown County taxpayers are just one group in a string that are challenging Biden’s plan in the courts. Just last week in St. Louis, a federal judge heard arguments from several Republican-led states that seek to enjoin the program. 

Experts speculated that Biden’s loan forgiveness program would see a challenge based on the major question doctrine almost immediately after he announced it. 

So far, though, the Brown County taxpayers have struggled to mount their case. They turned to the high court Wednesday after a federal judge denied their bid for an injunction, and the Seventh Circuit affirmed. 

The group says it is not “insensitive” to standing concerns and isn’t using courts to litigate policy questions. Instead, the group claims the debt assumed by Biden’s program will impact taxpayers and therefore they will be harmed by the plan. 

“We are witnessing a gargantuan increase in the national debt accomplished by a complete disregard for limitations on the constitutional spending authority,” Esenberg wrote. “Applicant and those similarly situated are being asked to assume perhaps over one trillion dollars in debt. The issue is not simply that the government has acted unconstitutionally in a way that harms others but not the Applicant itself. To the contrary, because the unlawful step alleged here tramples the constitutional spending power, it harms Applicant’s members as taxpayers.” 

In doing this, the group acknowledges that it is asking the court to use a seldom use framework but says the Biden administration has foiled other standing arguments with changes to its plan. 

“Applicant is aware, moreover, that it is asking this Court to apply a doctrinal framework that, while adopted long ago and still good law, is seldom applied,” Esenberg wrote. “But all other creative attempts to establish standing have been frustrated by Respondents’ unilateral changes in the program.” 

Should the justices turn down the taxpayers because of “prudential concerns about standing,” the brief continues, “the President’s power will be unchecked and almost absolute.” 

“The President will be able to spend any amount of money to benefit favored groups, and because the only harm will be to those who foot the bill, his disregard of our Constitution’s careful vesting of the spending power in the Congress and Congress alone will become a dead letter,” Esenberg wrote. “Although voters might choose to punish such unilateral action, the unconstitutional giveaways will themselves distort the political process. This outcome can’t be the law.” 

Justice Amy Coney Barrett is assigned to emergency applications related to Seventh Circuit cases. It is not clear when or if the court will respond to the application.

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