Biden’s Student-Loan Action Is Obviously Unconstitutional. So Why Can’t Anyone Stop It?

T here is little doubt that President Biden’s unilateral decision to “cancel” (i.e., transfer to taxpayers) student-loan debts is unconstitutional. The legislative power (including the power to spend) is vested in Congress. The “major questions” doctrine underscored in last term’s decision in West Virginia v. EPA reinforces the idea that the power to cancel student loans for almost everyone cannot be found in an old law designed to provide focused relief for members of the military. Congress, the saying goes, does not hide elephants in mouseholes.

But it is possible that no one will be able to bring a lawsuit to enforce the critical statutory and constitutional principles it violates. If you think there’s something wrong with that, you’re right. So far, alas, though blame for this move belongs to Biden, conservatives have proven unable to stop it.

As soon as Sunday, October 23, the Biden administration will begin unilaterally canceling student-loan debts for tens of millions of borrowers. Six major lawsuits have been filed, but so far, no court has stopped this unprecedented and unconstitutional power grab. At the Wisconsin Institute for Law & Liberty (WILL), we petitioned the United States Supreme Court on Wednesday for an emergency order to halt the program before it goes into effect on Sunday. The Court denied our request on Thursday, and shortly thereafter, a federal judge in Missouri denied a similar request by six states. Other courts have also refused to grant relief.

Not one of these cases has reached the merits. Each has failed because none of us has yet cracked the code on legal standing.

Legal standing is the basic concept that limits the power of courts to consider only concrete issues among relevant parties. Courts are not venues for issuing advisory opinions or settling abstract policy debates better handled by legislatures. They resolve disputes — our Constitution describes them as “cases” or “controversies” — between people about how the law is to be applied to them.

Justice Antonin Scalia was a fierce defender of a strict rule of standing as a way to ensure the separation of powers. In 1986, a group called Defenders of Wildlife sued the Reagan administration after it loosened up enforcement of the Endangered Species Act. The group claimed that it had standing because its members were concerned about endangered species and enjoyed observing them. One plaintiff, Joyce Kelly, told the Court that she traveled to Egypt once and enjoyed observing “the traditional habitat of the endangered Nile crocodile there and intends to do so again.” She said this was enough for standing to sue.

It was not. Justice Scalia, writing for the Court in Lujan v. Defenders of Wildlife, explained that, to demonstrate standing, a plaintiff must allege an injury that is “concrete and particularized,” caused by the defendant, and capable of redress by the courts. In other words, the plaintiff must demonstrate that she was actually harmed by government action and that a court could do something about it.

Standing rules are important guardrails for our separation of powers. Justice Scalia was concerned that Ms. Kelly’s injuries were too diffuse and too widely shared to constitute the type of injury that might count as a case or controversy.

But problems remain. What about cases in which a governmental policy will violate the Constitution in a way that harms many people similarly? What if the president decides to suspend collection of the income tax or announce a 40 percent increase in Social Security benefits? Standard doctrine is that no one is harmed by a benefit conferred on another. But even in the topsy-turvy world of the federal government, where we indulge the fiction that “no one” really pays for the spending of a trillion dollars, taxpayers are “really” harmed by large expenditures. The fact that many suffer the same injury makes it no less concrete or particularized.

So it is with Biden’s loan forgiveness. No one is hurt by the reduction in someone else’s debt. But many of us are harmed by another trillion dollars in debt which, notwithstanding the alchemists who run our government, will have to be paid for sooner or later.

In response to the Biden program, various litigators have tried different workarounds to the standing problem. All are creative. Many have real merit. So far, none have worked. The government has either changed the program on the fly to defeat claims that certain states will now service a smaller amount of loans (those borrowers were tossed out of the program) or that some debtors will have to pay state taxes on debt forgiveness they don’t need (those borrowers can now “opt-out.”) The president really does not want to defend this program on its legal merits.

We took a more direct route. We used a doctrine called “taxpayer standing.” While this doctrine is rarely used, a case called Flast v. Cohen did allow taxpayers to sue when Congress appropriated money to finance textbooks for religious schools. Other cases have allowed taxpayer standing to challenge grants issued to religious organizations or for Nativity displays on public property.  So far, this doctrine has been limited to claims brought under the establishment clause. But the idea is that taxpayers should be able to challenge an abuse of the government’s spending power.

We can argue whether Flast itself constituted such a case. But it is not at all obvious that either the Constitution or a healthy respect for our separation of powers mean that the president can blatantly exceed his authority and unilaterally spend roughly 4 percent of annual Gross Domestic Product without legal challenge. Indeed, both concerns suggest the opposite. If the challenge is to a violation of the spending power (here, the expenditure of money without a congressional appropriation) and where the expenditure is large enough to be material to the government’s fiscal position, the fact that many taxpayers suffer the same injury should not defeat standing.

Our own case, Brown County Taxpayer Association v. Biden, was an effort to put what we concede is a novel question to the Court. It looks like we were unsuccessful. But when, after careful consideration, a legal doctrine seems unworkable, it probably is. It simply cannot be the answer that no one can sue to stop such a blatantly unconstitutional program. While we share the conservative aversion to judicial activism, the judicial abnegation of responsibility is equally troubling. Our federal courts should not be relegated to mere bystanders, observing constitutional infringements with no power to remedy them.

Rick Esenberg is president and general counsel, and Dan Lennington is deputy counsel, at the Wisconsin Institute for Law and Liberty (WILL).