WEBVTT - Showdown Over Biden's Student-Loan Relief 0:00:03.120 --> 0:00:07.960 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:09.480 --> 0:00:12.560 A half a trillion dollars showdown at the Supreme Court, 0:00:12.840 --> 0:00:15.880 as the Justice has weighed the fate of President Joe 0:00:16.000 --> 0:00:20.600 Biden's student loan forgiveness plan. The conservative justice has seemed 0:00:20.680 --> 0:00:25.040 highly skeptical that Biden had the authority to broadly cancel 0:00:25.200 --> 0:00:28.720 federal student loans of up to forty three million Americans. 0:00:29.280 --> 0:00:32.720 To many, the enormous price tag was a concern and 0:00:32.880 --> 0:00:35.920 an indication that it was a job for Congress, not 0:00:36.000 --> 0:00:39.839 the president. Here are Chief Justice John Roberts and Justice 0:00:39.960 --> 0:00:44.760 Samuel Alito. We're talking about half a trillion dollars and 0:00:45.280 --> 0:00:49.680 forty three million Americans. How does that fit under the 0:00:49.800 --> 0:00:54.840 normal understanding of modifying seems to presume that when it 0:00:54.880 --> 0:00:59.840 comes to the administration of benefits programs, trillion dollars here, 0:01:00.040 --> 0:01:03.640 tillion dollars there doesn't really make that much difference. To Congress. 0:01:03.640 --> 0:01:09.080 That doesn't seem very sensible. But there was support for 0:01:09.120 --> 0:01:12.680 the program from the liberal justices. Here are Justice is 0:01:12.720 --> 0:01:16.360 Elena Kagan and Sonya so To. Mayor. Congress used its 0:01:16.400 --> 0:01:19.600 voice in enacting this piece of legislation. Oh, this business 0:01:19.640 --> 0:01:23.120 about executive power. I mean, we worry about executive power 0:01:23.480 --> 0:01:27.240 when Congress hasn't authorized the use of executive power. Here, 0:01:27.319 --> 0:01:30.520 Congress has authorized the use of executive power in an 0:01:30.600 --> 0:01:36.680 emergency situation. Those are exceptions that clearly are permitted under 0:01:36.720 --> 0:01:40.000 the AHA to cancel a debt. So why would I 0:01:40.080 --> 0:01:44.120 have a view that Congress didn't understand that in an 0:01:44.160 --> 0:01:49.160 improper emergency debt cancelation would be right? My guest is 0:01:49.160 --> 0:01:52.320 Harold Grant, a professor at the Chicago Kent College of Law. 0:01:53.240 --> 0:01:56.760 So how does it appear as if the Court's conservative 0:01:56.800 --> 0:02:01.320 majority is, to put it mildly, that Biden has the 0:02:01.360 --> 0:02:05.240 power to implement this plan under the Hero's Act. To 0:02:05.360 --> 0:02:08.239 put it mildly, yes, the majority of the Court is 0:02:08.320 --> 0:02:12.720 very skeptical that the statute empowers to Biden administration with 0:02:12.880 --> 0:02:16.840 the power to cancel all of the student loans. And 0:02:16.880 --> 0:02:19.960 the reason is that the statute does give the administration 0:02:20.040 --> 0:02:23.840 power to waiver modify unique provision under the Act in 0:02:23.880 --> 0:02:27.680 an emergency. And so much of the argument turns on 0:02:27.960 --> 0:02:31.359 what's the expanse of waiver and modification and did Congress 0:02:31.400 --> 0:02:35.680 ever intend waiver and modification to include cancelation of up 0:02:35.680 --> 0:02:39.480 to four hundred billion dollars of that was such a 0:02:39.520 --> 0:02:43.560 tremendous impact upon the economy. And to put it again, 0:02:43.600 --> 0:02:46.360 as you stated, to put it mildly, Chief Justice Robberts 0:02:46.440 --> 0:02:50.200 was emphatically clear that he'd never thought that Congress would 0:02:50.200 --> 0:02:54.600 have given so much expansive authority to the administration to 0:02:54.760 --> 0:02:57.640 take that kind of action with such a broad impact 0:02:57.680 --> 0:03:01.400 on the economy. In other words, this emergency power, according 0:03:01.440 --> 0:03:06.919 to the seeming majority of justices, maybe postponing debt may 0:03:06.960 --> 0:03:11.400 be limiting interest payments, but certainly didn't entail such broad 0:03:11.480 --> 0:03:15.320 cancelation authority. Does it seem like the only hope really 0:03:15.560 --> 0:03:19.120 for the student loan forgiveness program is if the justices 0:03:19.160 --> 0:03:23.880 don't find standing. There's grave questions about whether the plaintiffs 0:03:23.880 --> 0:03:28.320 in both combined cases have what's called standing to proceed. 0:03:28.520 --> 0:03:32.040 There are lots of questions raised about whether the states 0:03:32.240 --> 0:03:36.080 can demonstrate their sufficient injury to continue the case. And 0:03:36.120 --> 0:03:39.880 with respect to the students were not benefited by the 0:03:39.920 --> 0:03:44.840 loan cancelation, whether they have standing as being frustrated because 0:03:45.400 --> 0:03:49.760 Biden didn't include them in the package of loans that 0:03:49.800 --> 0:03:52.560 were to be canceled, so they may not have any 0:03:52.640 --> 0:03:56.080 kind of recognized injury to pursue these claims anyway. And 0:03:56.080 --> 0:03:58.720 of course their claim is odd. Their claim is it's 0:03:59.080 --> 0:04:01.200 we should have been included it, and so you should 0:04:01.480 --> 0:04:05.280 knock down the Biden plan. That's a very strange kind 0:04:05.320 --> 0:04:07.280 of standing. And I do think it's fair to say 0:04:07.280 --> 0:04:10.400 that if the court takes this case decides it on 0:04:10.440 --> 0:04:13.160 the merits, which would not for sure but likely go 0:04:13.280 --> 0:04:17.279 against the Abiden administration, they will be broadening standing, which 0:04:17.320 --> 0:04:19.640 is unusual because this court in the past is most 0:04:19.640 --> 0:04:23.160 recently narrowed standing in lots of different ways. So that's 0:04:23.200 --> 0:04:24.919 why I think this is a tough case. You have 0:04:25.000 --> 0:04:28.120 a case on standing being able to get into court, 0:04:28.160 --> 0:04:31.640 which is challenging, but on the merits, based on the 0:04:31.760 --> 0:04:34.279 oral argument, at least a good number of the court, 0:04:34.680 --> 0:04:39.000 we're saying that Biden administration overstepped its bounds in deciding 0:04:39.040 --> 0:04:42.520 to cancel these student debts, which could be twenty five 0:04:42.560 --> 0:04:45.520 to forty million people at a cost over thirty years 0:04:45.520 --> 0:04:48.040 of four hundred billion dollars to the economy, which again, 0:04:48.080 --> 0:04:51.680 this is a huge undertaking by the Abiden administration. So 0:04:51.920 --> 0:04:54.599 let's look at standing first, Because it seemed as if 0:04:54.680 --> 0:04:59.560 the liberal justices were more concerned about standing, except for 0:04:59.720 --> 0:05:04.279 just does any Coney Barrett, Here's justice any Coney Barrett 0:05:04.440 --> 0:05:09.000 questioning Missouri's standing. Why didn't the state just make Mohila 0:05:09.040 --> 0:05:11.479 come then, if Mohilla is really an arm of the state, 0:05:11.600 --> 0:05:13.080 and all of this would be a lot easier than 0:05:13.120 --> 0:05:15.560 The Solicitor General conceded that if Mohila was here, Mohila 0:05:15.600 --> 0:05:18.039 would have standing. If Mohilla is an arm of the state, 0:05:18.080 --> 0:05:20.200 why didn't you just strong arm Mohilla and say you've 0:05:20.240 --> 0:05:23.360 got to pursue this suit. Yeah, So there's two theories 0:05:23.360 --> 0:05:25.960 of standing with respect of the states. All the states 0:05:25.960 --> 0:05:29.400 said that they will have injuring fact because their tax 0:05:29.480 --> 0:05:34.919 revenues may go down because of the cancelation by the 0:05:34.960 --> 0:05:37.840 Biden administration of the student loans. That argument, I think 0:05:37.920 --> 0:05:41.440 is very weak, because, if anything, their tax proceeds may 0:05:41.440 --> 0:05:45.279 go up because of the student debt forgiveness, because people 0:05:45.279 --> 0:05:47.159 will have more money to spend and more money to 0:05:47.279 --> 0:05:50.320 invest in, more confidence in the economy about the respect 0:05:50.320 --> 0:05:53.000 of state, So the states can't show a connection between 0:05:53.360 --> 0:05:56.640 cancelation of student debt and any kind of harm to 0:05:56.680 --> 0:06:00.200 their tax claffers. Both the size of both the Biden 0:06:00.200 --> 0:06:05.400 administration and the plaintiffs argued that a entity that processes loans, 0:06:05.680 --> 0:06:08.240 they might suffer because of the fact that there will 0:06:08.279 --> 0:06:11.159 be fewer people that turn to them for processing loans 0:06:11.160 --> 0:06:13.920 because their loans will be forgiven under the Biden plan, 0:06:14.080 --> 0:06:16.760 And that's true, that would be injury. In fact, most 0:06:16.800 --> 0:06:20.320 of those loan processors are private. There is one processor 0:06:20.400 --> 0:06:24.560 in Missouri which is a kind of state corporation that's 0:06:24.640 --> 0:06:27.440 separate from the state but yet is public, and so 0:06:27.480 --> 0:06:30.400 that's called Mahilla. And so it was a question as 0:06:30.520 --> 0:06:33.520 even though they haven't come in into this case, they 0:06:33.560 --> 0:06:37.800 have ensued whether Missouri as a state has enough overlap 0:06:38.040 --> 0:06:41.120 with Mohilla, so that day in essence can say that 0:06:41.160 --> 0:06:44.960 either they will be affected if Mohilla suffers, or where 0:06:45.000 --> 0:06:48.240 they can raise Mahillo's claims on behalf of Mahla because 0:06:48.400 --> 0:06:50.880 they're both part of the state of Missouri. So that 0:06:51.000 --> 0:06:54.560 was the nexus of the standing argument that was presented. 0:06:54.600 --> 0:06:58.919 And it's a very complicated question because under Missouri Lawhilla 0:06:59.160 --> 0:07:01.480 can sue and be sued in its own name, and 0:07:01.520 --> 0:07:05.160 its debts will not be subject to being paid by 0:07:05.200 --> 0:07:07.880 the state of Missouri. So there are a state created institution, 0:07:07.960 --> 0:07:11.040 but they're separate from the coffers of the state, and 0:07:11.120 --> 0:07:13.800 they chose not to sue in this case. So that's 0:07:13.800 --> 0:07:17.080 the question is whether that injury, which everybody recognizes sufficient 0:07:17.120 --> 0:07:20.000 for injury in fact, whether Missouri as a state can 0:07:20.000 --> 0:07:22.640 stand in the shoes of that injury and advocate it 0:07:22.640 --> 0:07:24.960 in order to get into court to challenge the student 0:07:25.000 --> 0:07:28.200 debt program. Let's talk about the merits. What do you 0:07:28.200 --> 0:07:31.440 think was the main concern of the justices? Was it 0:07:32.000 --> 0:07:35.400 a problem with separation of powers? Was it something else? 0:07:35.800 --> 0:07:39.120 The problem that the justices sought articulated over and over 0:07:39.480 --> 0:07:42.760 is this is a massive program. And did Congress when 0:07:42.760 --> 0:07:46.600 it enacted the Heroes Act and gave the administration the 0:07:46.640 --> 0:07:51.280 power and emergency to make modifications to the student loan programs, 0:07:51.520 --> 0:07:55.200 did they ever envision something on this scale, a scale 0:07:55.280 --> 0:07:58.040 that would encompass twenty five to forty million people in 0:07:58.040 --> 0:08:01.600 this country, a scale that could cause cancelation of debts 0:08:01.680 --> 0:08:04.400 to the amount of four hundred billion dollars over thirty years. 0:08:04.440 --> 0:08:06.200 And I think they just thought that this was such 0:08:06.280 --> 0:08:10.480 a massive scale that the Biden administration wasn't just sort 0:08:10.480 --> 0:08:13.680 of modifying the program in a national emergency, but by 0:08:13.760 --> 0:08:16.880 canceling debt, it was actually changing the nature of the 0:08:16.960 --> 0:08:20.600 student loan program. And the question is whether Congress really 0:08:20.840 --> 0:08:25.640 anticipated or envisioned an administration having that much power, even 0:08:25.680 --> 0:08:28.280 though they said that you should have extraordinary powers in 0:08:28.320 --> 0:08:30.880 the face of an emergency. So most of the argument 0:08:30.880 --> 0:08:34.720 with respect of the merits just delved into what degree 0:08:35.040 --> 0:08:39.439 of modification power the administration could use in an emergency. 0:08:39.760 --> 0:08:43.360 Everybody agreed that COVID would be a relevant emergency, but 0:08:43.520 --> 0:08:47.960 did that emergency justify a complete transformation of the student 0:08:48.000 --> 0:08:51.000 loan program? That was the nub of the merits argument. 0:08:51.280 --> 0:08:54.719 I mean, is this all about the major questions doctrine 0:08:55.240 --> 0:08:59.520 that the Court has used before to stop Biden administration 0:09:00.080 --> 0:09:04.439 initiatives during the pandemic, like the moratorium on randal evictions 0:09:04.480 --> 0:09:07.360 that was struck down. The Court did invoke the major 0:09:07.400 --> 0:09:10.280 questions doctrine as a way to suggest that if we're 0:09:10.280 --> 0:09:13.800 not sure about the scope of Congress's intended delegation, then 0:09:13.840 --> 0:09:16.120 we should put our finger on the scale of saying 0:09:16.120 --> 0:09:19.240 we don't allow an agency to take such kind of 0:09:19.440 --> 0:09:23.480 wide and expansive action unless we're very confident that the 0:09:23.520 --> 0:09:26.560 Congress wanted them to go that far. And the language 0:09:26.679 --> 0:09:30.400 under the Heroes Act, under which the Biden administration predicated 0:09:30.440 --> 0:09:33.600 this change, allows the sector of Education to make a 0:09:33.640 --> 0:09:38.360 waiver and a modification to the program. So clearly Congress said, 0:09:38.640 --> 0:09:40.920 we think you should take action in an emergency. And 0:09:40.960 --> 0:09:43.840 the question is, by using the language waiver and modification, 0:09:44.360 --> 0:09:48.200 does that include cancelation as well? And if you have 0:09:48.440 --> 0:09:51.280 the sort of priors, if you will or you have 0:09:51.440 --> 0:09:56.840 the expectation that agencies should not take expansive interpretations of 0:09:56.920 --> 0:10:00.520 authority granted by Congress, then you come down the side 0:10:00.600 --> 0:10:04.120 that a cancelation does not equal a waiver or a modification. 0:10:04.320 --> 0:10:05.720 But if, on the other hand, if you come down 0:10:05.800 --> 0:10:08.720 the side that Congress was acting in an extraordinary way 0:10:08.840 --> 0:10:12.000 saying you the administration should take extraordinary measures in the 0:10:12.000 --> 0:10:14.960 face of an emergency, then a waiver and a modification 0:10:15.040 --> 0:10:18.120 can include a cancelation. And then what the Biden administration 0:10:18.160 --> 0:10:21.920 would be upheld. Even Justice Kavanaugh said that you know, 0:10:22.080 --> 0:10:25.360 Congress acted here, thought about the problem, and it wanted 0:10:25.400 --> 0:10:30.079 to give the Education Department extraordinary powers to protect Americans 0:10:30.320 --> 0:10:32.680 in the face of any kind of emergency, whether it's 0:10:32.760 --> 0:10:36.200 like nine to eleven, which precipitated passage of the Hero's Act, 0:10:36.559 --> 0:10:39.800 or if it's like COVID. So there is a question, 0:10:39.840 --> 0:10:43.800 even with respect to the so called conservative justices, how 0:10:43.840 --> 0:10:46.679 they may come down if they reach the mirrors on 0:10:46.720 --> 0:10:50.200 this delegation issue. Justice Kavanaugh also said that some of 0:10:50.240 --> 0:10:53.760 the biggest mistakes in the Court's history were deferring to 0:10:53.840 --> 0:10:57.680 assertions of executive or emergency power. He did say that 0:10:57.760 --> 0:11:01.319 he was referring to the seizure of the mills in 0:11:01.360 --> 0:11:04.959 the Korean War by President Truman. Maybe he was referring 0:11:05.000 --> 0:11:07.560 to President Trump and the border wall from when he 0:11:07.600 --> 0:11:09.880 invoked the emergency for that, I don't know, but he 0:11:09.960 --> 0:11:13.240 was also probably talking about what we did after nine 0:11:13.280 --> 0:11:17.040 to eleven in terms of guantanamobey as well. The other 0:11:17.160 --> 0:11:19.240 justices didn't seem to pick up on this. I mean, 0:11:19.240 --> 0:11:22.440 I think that what Justice Kevin I said is very important. 0:11:22.720 --> 0:11:25.760 That you have to be very careful about allowing an 0:11:25.760 --> 0:11:29.959 emergency declaration to paper over the kind of legal issues 0:11:30.160 --> 0:11:33.760 that may arise, and that certainly was manifested in Youngstown 0:11:33.840 --> 0:11:36.600 steal as well as in some other cases. But most 0:11:36.600 --> 0:11:38.520 of the rest of the Court seemed focused on whether 0:11:38.520 --> 0:11:41.240 this was an excessive delegation. In other words, whether the 0:11:41.400 --> 0:11:44.880 Education Department went outside the borders of what Congress would 0:11:44.880 --> 0:11:48.080 have anticipated, as opposed to debating whether this is a 0:11:48.120 --> 0:11:52.280 proper invocation of an emergency or not. I mean, the 0:11:52.280 --> 0:11:57.280 difficulty is clearly many Americans felt the sting of COVID 0:11:57.600 --> 0:12:00.600 and the fact of having to bear these student loans 0:12:01.040 --> 0:12:04.960 during a time of economic privation was extremely tough. But 0:12:05.360 --> 0:12:09.120 does that say just forbearance and wait three years before 0:12:09.160 --> 0:12:10.760 you pay off the loan, or does that say you 0:12:10.800 --> 0:12:14.080 could actually cancel the student loans themselves. And that's a 0:12:14.080 --> 0:12:16.760 big difference. And I think the Court was troubled by 0:12:16.760 --> 0:12:20.280 the fact that Congress had an explicitly given the power 0:12:20.600 --> 0:12:24.200 to the Education Department to cancel loans as opposed to 0:12:24.240 --> 0:12:27.160 just issue forbearance. I think they all would agree that 0:12:27.240 --> 0:12:30.600 the Education Secretary had the power to say, Okay, let's 0:12:30.600 --> 0:12:32.880 wait three years before we collect your loans. We won't 0:12:32.920 --> 0:12:35.640 charge you interest. Let's wait five years. That would have 0:12:35.679 --> 0:12:38.760 been okay, But the question of cancelation, maybe that was 0:12:38.800 --> 0:12:41.520 too far in the minds of at least a number 0:12:41.520 --> 0:12:46.240 of the justices. Several of the conservative justices, including the 0:12:46.320 --> 0:12:50.560 Chief talking about what he called the fairness argument, which 0:12:50.679 --> 0:12:55.480 echoes a common criticism from opponents of the student loan program, 0:12:55.520 --> 0:12:59.280 who argues it punishes Americans who couldn't afford college or 0:12:59.400 --> 0:13:03.400 worked hard to pay off their loans. Here's Justice Neil 0:13:03.480 --> 0:13:06.520 Gorsage on that point. What I think they argue that 0:13:06.679 --> 0:13:10.240 is missing is cost to other persons in terms of fairness, 0:13:10.320 --> 0:13:15.079 for example, people who've paid their loans, people who don't 0:13:15.840 --> 0:13:19.760 have planned their lives around not seeking loans, and people 0:13:19.760 --> 0:13:22.080 who are not eligible for loans in the first place. 0:13:22.520 --> 0:13:25.320 And that half a trillion dollars is being diverted to 0:13:25.400 --> 0:13:28.679 one group of favored persons over others. So this is 0:13:29.040 --> 0:13:32.520 a conservative trope to use that language, but it does 0:13:32.760 --> 0:13:36.680 factor here in a particular way. If the Court were 0:13:36.800 --> 0:13:40.640 to take up the merits of the Biden administration decision 0:13:40.720 --> 0:13:45.439 and decide that the Biden administration had the power to cancel, 0:13:45.760 --> 0:13:48.080 then the question would be whether it's decision to cancel 0:13:48.120 --> 0:13:50.640 the debt was, in the words of the Administry of 0:13:50.640 --> 0:13:53.800 Procedure act arbitrary and capricious. And what the Justice is 0:13:53.880 --> 0:13:59.240 noted was that in these declarations of policy announcing the 0:13:59.280 --> 0:14:04.240 cancelation of the debts, there was no recognition or acknowledgement 0:14:04.760 --> 0:14:09.679 of the potential unfairness to those who had gone to 0:14:10.080 --> 0:14:13.120 a less costly school because of the face of the debt, 0:14:13.360 --> 0:14:15.559 or those who had struggled to pay off the debt, 0:14:15.920 --> 0:14:19.520 and that there was at least no recognition of those 0:14:19.600 --> 0:14:23.880 interests in the calculus that was used by the least 0:14:23.960 --> 0:14:28.040 articulated by the Education Department announcing the cancelation. So that 0:14:28.200 --> 0:14:32.480 issue would arise only if the court decided that the 0:14:32.600 --> 0:14:35.880 Education Department had the power to issue a cancelation, and 0:14:35.920 --> 0:14:38.400 then they would just decide whether that was fair. And 0:14:38.480 --> 0:14:42.360 they might say that because the Biden administration didn't articulate 0:14:42.360 --> 0:14:46.120 the concerns that could be raised by people who weren't benefited, 0:14:46.240 --> 0:14:49.400 such as the two plaintiffs in the second companion case, 0:14:49.640 --> 0:14:53.160 that the whole cancelation should be dismissed for being arbitrary 0:14:53.160 --> 0:14:56.720 and capricious. If they do that, that would leave open 0:14:57.560 --> 0:15:02.280 the path for the Education Department go back and announce 0:15:02.320 --> 0:15:07.360 again anew the cancelation, only this time addressing the concerns 0:15:07.480 --> 0:15:11.040 of those who weren't benefited, and just to find the 0:15:11.120 --> 0:15:14.280 line drawing that the Education Department had to do in 0:15:14.360 --> 0:15:18.120 deciding who should get their loans canceled and who like 0:15:18.280 --> 0:15:20.400 me who paid off their loans years and years ago, 0:15:20.600 --> 0:15:23.800 would not get any kind of reimbursement. Hours and hours 0:15:23.800 --> 0:15:26.880 of oral arguments becoming even harder to tell what's going 0:15:26.920 --> 0:15:30.840 on with these cases. But do you see even the 0:15:30.880 --> 0:15:35.160 possibility of five justices forget the standing issue, who would 0:15:35.200 --> 0:15:39.440 vote to uphold the student loan forgiveness program. I think 0:15:39.440 --> 0:15:42.480 that the court might be fractured. It's possible that there 0:15:42.480 --> 0:15:46.280 would be some justices saying this is an excessive delegation 0:15:46.480 --> 0:15:49.240 or the major question SOCTA and would apply, and therefore 0:15:49.480 --> 0:15:53.520 the bide administration policy must be rescinded. There's some who'd say, well, 0:15:53.920 --> 0:15:57.800 there was a targeted emergency type of delegation to the 0:15:57.920 --> 0:16:01.920 Education Department. We should allow the Education Department to proceed, 0:16:02.280 --> 0:16:04.920 but it has to do so in a measured, thoughtful way. 0:16:05.320 --> 0:16:08.440 And because they didn't give concern to the people who 0:16:08.440 --> 0:16:11.560 would feel frustrated and left out of this cancelation program, 0:16:11.840 --> 0:16:14.040 that the administration has to go back and do it again. 0:16:14.240 --> 0:16:17.200 That kind of fracture we saw in the Docker case 0:16:17.480 --> 0:16:20.200 a couple of terms ago. The Docker case, what the 0:16:20.240 --> 0:16:22.080 court said was Okay, you have the power to do this, 0:16:22.440 --> 0:16:26.080 but you didn't really have a complete enough explanation about 0:16:26.120 --> 0:16:30.920 all the factors. And so the Chief Justice was invoking 0:16:31.040 --> 0:16:33.040 that case in that approach to say, Okay, if you 0:16:33.120 --> 0:16:35.480 had the power, the least you had to consider the 0:16:35.520 --> 0:16:38.400 fairness and the impact on thitter parties, and they would 0:16:38.400 --> 0:16:41.160 send it back. And so there may be that kind 0:16:41.320 --> 0:16:43.320 of alliance, and I do think there'll be a couple 0:16:43.360 --> 0:16:47.000 of justices and maybe even as you mentioned Justice Barrett, 0:16:47.040 --> 0:16:51.040 who decides there's certainly no standing in this case. If 0:16:51.040 --> 0:16:55.040 the Justice's rule against the student loan program, well, that 0:16:55.240 --> 0:16:59.840 amplify frustrations that many Americans have with the Supreme Court 0:17:00.080 --> 0:17:05.639 that continues to interfere in these major political decisions and 0:17:06.400 --> 0:17:09.560 seems to be out of step with the majority of Americans. 0:17:10.280 --> 0:17:14.600 I think there'll be a continued wave of frustration, perhaps 0:17:14.640 --> 0:17:18.640 anger at the Supreme Court for its willingness to curtail 0:17:18.680 --> 0:17:22.040 the operations of the executive branch. And indeed there may 0:17:22.040 --> 0:17:25.160 be some political fallout, and this may give President Biden 0:17:25.560 --> 0:17:28.439 more of another kind of argument to use in his 0:17:28.560 --> 0:17:32.720 reelection campaign, showing people that, hey, what administration does is 0:17:32.720 --> 0:17:36.040 really important people's lives, and so therefore you should give 0:17:36.040 --> 0:17:40.000 me another four years. That may happen as well. Let's 0:17:40.040 --> 0:17:43.639 talk for a moment again about the Major Questions doctrine. 0:17:43.880 --> 0:17:47.480 It was the Roberts Court that established that doctrine. The 0:17:47.560 --> 0:17:51.920 Roberts Court established it. There was reference to earlier cases 0:17:52.080 --> 0:17:55.840 in which the Roberts Courts had articulated the Major Questions doctrine. 0:17:56.119 --> 0:17:59.320 Justice Scalia was one of the first two articulated and 0:18:00.000 --> 0:18:02.280 a sort of a single point. And then since that 0:18:02.359 --> 0:18:07.640 time more courses systematically referenced it, and now it's known 0:18:07.640 --> 0:18:09.879 and basically you can look at the Major Questions in 0:18:09.920 --> 0:18:12.960 a variety of ways. At its most appealing, which many 0:18:12.960 --> 0:18:15.080 people don't agree with it, but at its most appealing, 0:18:15.480 --> 0:18:17.359 the major question. Doctor and says, Look, if we're not 0:18:17.480 --> 0:18:22.600 sure that Congress gave the agency this authority and the 0:18:22.640 --> 0:18:27.240 agency's action would chart a whole new path in terms 0:18:27.320 --> 0:18:31.600 of social and economic policy, we should read the delegation narrowly. 0:18:32.000 --> 0:18:35.679 But I think, as the so called liberal justices noted 0:18:35.800 --> 0:18:39.840 in this case, we know what the Congress did. Congress 0:18:39.920 --> 0:18:42.479 wanted to give the head of the Department of Education 0:18:42.560 --> 0:18:46.360 the authority to deal with an emergency, and so it's 0:18:46.440 --> 0:18:49.200 not like charting a new path. It's not like being 0:18:49.680 --> 0:18:52.679 an activist. They're just trying to interpret the powers that 0:18:52.840 --> 0:18:58.280 Congress gave him, and in this case, to cancel at 0:18:58.359 --> 0:19:01.160 least part of the student loan debt that twenty five 0:19:01.240 --> 0:19:04.919 or forty million people in the United States has. There's 0:19:04.920 --> 0:19:09.520 an interesting argument under the Major Questions doctrine. During the discussion, 0:19:09.680 --> 0:19:13.200 the point was raised about whether it is less risky 0:19:13.280 --> 0:19:15.800 for Congress to give a great deal of power to 0:19:15.840 --> 0:19:20.320 administrative agencies in administering benefits programs as opposed to in 0:19:20.359 --> 0:19:24.960 regulating The thought underlying that discussion was, if you're just 0:19:25.000 --> 0:19:28.879 talking about merits, you're not giving the ability administration to 0:19:28.920 --> 0:19:33.320 regulate new areas, to compromise new kinds of economies at all. 0:19:33.400 --> 0:19:36.880 All you're suggesting is whether to tinker with a program 0:19:36.920 --> 0:19:41.120 that Congress clearly established, and even if it's canceled, then 0:19:41.119 --> 0:19:45.639 you're not necessarily again changing the economies of industries. And 0:19:45.720 --> 0:19:50.080 so from that perspective, a number of justices echoed that thought, 0:19:50.160 --> 0:19:54.800 as did this listener general that a delegation of the 0:19:54.880 --> 0:19:58.080 power to limit a marriage program. It could be Social Security, 0:19:58.200 --> 0:20:01.000 or it could be here education loan is a lot 0:20:01.119 --> 0:20:05.119 less dangerous, and therefore the major questions doctor should not 0:20:05.160 --> 0:20:08.000 apply as fully as opposed to when we're talking about 0:20:08.040 --> 0:20:11.800 regulating new authorities such as carbon emissions. Well, we'll have 0:20:11.840 --> 0:20:15.640 to keep guessing about what happens until perhaps as late 0:20:15.680 --> 0:20:18.440 as June when they come down with their final decisions 0:20:18.480 --> 0:20:21.879 of the term. Thanks so much, Hal, that's professor Harold 0:20:21.920 --> 0:20:26.680 Krent of the Chicago Kent College of Law. The Supreme 0:20:26.720 --> 0:20:30.919 Court will once again weigh the Consumer Financial Protection Bureau's fate, 0:20:31.359 --> 0:20:36.159 focusing on whether the agency's independent funding violates the Constitution. 0:20:36.760 --> 0:20:39.159 This week, the High Court elected to hear the Biden 0:20:39.160 --> 0:20:43.160 administration's appeal of an October decision from the US Court 0:20:43.200 --> 0:20:46.400 of Appeals for the Fifth Circuit that found the agency's 0:20:46.480 --> 0:20:51.560 independent funding through the Federal Reserve was unconstitutional. A ruling 0:20:51.640 --> 0:20:54.840 upholding the Fifth Circuits finding would wreak havoc on the 0:20:54.880 --> 0:20:59.240 agency's operations. At the very least, the CFPB would find 0:20:59.280 --> 0:21:03.359 paying bills difficult, and its prior rules, enforcement actions, and 0:21:03.400 --> 0:21:08.200 settlements could become potentially invalid. Joining me is Alan Denson 0:21:08.280 --> 0:21:11.240 a partner. It's struck and struck in Levan. The Fifth 0:21:11.280 --> 0:21:16.199 Circuit Court of Appeals throughout never enforced pay day lending 0:21:16.320 --> 0:21:20.320 rule explain why it did that, what its reasoning was. 0:21:20.760 --> 0:21:23.280 Put it into one sentence. It has to do with 0:21:23.359 --> 0:21:26.560 the unification of the purse and the sword, and that 0:21:26.640 --> 0:21:31.879 actually comes from directly from the opinion itself. And what 0:21:32.119 --> 0:21:39.080 that phrase covers is this idea that Congress, through appropriations 0:21:39.160 --> 0:21:43.760 and the executive should not be under one hell, so 0:21:43.920 --> 0:21:47.800 an executive agency should not be able to fund itself, 0:21:48.520 --> 0:21:54.119 and that is what the FSA was able to successfully 0:21:54.280 --> 0:21:58.879 argue and convents. The fifth circuit of is that it's 0:21:58.920 --> 0:22:02.239 improper for an agency to be able to set its 0:22:02.320 --> 0:22:06.120 budget and determine what it's funding. Is that power belongs 0:22:06.160 --> 0:22:09.600 to the Congress under Article one of the Constitution, and 0:22:09.920 --> 0:22:14.159 that violates separation of powers principle. That's the reasoning and 0:22:14.760 --> 0:22:17.280 rationale of that. That's circum in a nutshell. Is that 0:22:17.320 --> 0:22:21.280 a novel legal argument. It is no court has ever 0:22:22.160 --> 0:22:27.679 reached that position before, and it's the bureaus structure is 0:22:27.760 --> 0:22:34.240 also not necessarily novel in comparison to other agencies. In fact, 0:22:34.400 --> 0:22:39.679 there are other financial regulators who are similarly structured like 0:22:39.760 --> 0:22:44.000 the bureau who are not funded through appropriation who have 0:22:44.080 --> 0:22:46.960 a single director. Great example of that would be the 0:22:47.000 --> 0:22:50.439 occ for example, which is a sister regulator of the 0:22:50.480 --> 0:22:56.080 CSPB on the FEC countful. The Bureau is certainly not 0:22:57.040 --> 0:23:02.440 unique in that it is dependently funded and has the 0:23:02.440 --> 0:23:06.479 sole director structure, which is a big thing that Circuit 0:23:06.560 --> 0:23:09.120 seems to take issue with. I think what does make 0:23:09.160 --> 0:23:13.280 them unique is that they're able to request a budget 0:23:13.480 --> 0:23:17.520 of an up to amount. That's unique, But that not 0:23:17.920 --> 0:23:21.720 the reason why the Fifth Circuit says it reached a decision. 0:23:22.040 --> 0:23:24.720 It really has to do with this fundamental structure that 0:23:25.160 --> 0:23:28.280 the Circuit beliefs, or the panel beliefs that an agency 0:23:28.920 --> 0:23:32.919 should not be independent outside of congressional appropriation. So the 0:23:33.040 --> 0:23:37.399 Fifth Circuit thinks that the funding scheme for the CFPB 0:23:37.760 --> 0:23:42.080 is unconstitutional. That's right. Are there any other circuit courts 0:23:42.080 --> 0:23:46.400 who've ruled on this and come to different conclusions? Yeah, 0:23:46.520 --> 0:23:50.040 the DC Circuit early in the Bureau's history, ruled on it, 0:23:50.480 --> 0:23:55.399 and the Ninth Circuit I believe, has also ruled on 0:23:55.440 --> 0:23:58.760 that argument. So there is a flood. What does it 0:23:58.800 --> 0:24:01.320 tell you that the Supreme Court declined to put this 0:24:01.400 --> 0:24:06.520 case on an expedited schedule, as the administration asked, I 0:24:06.640 --> 0:24:10.560 think that it means this THESPB is going to face 0:24:11.040 --> 0:24:14.520 continued uncertainty. I think that that's a bad sign for 0:24:14.600 --> 0:24:20.399 the agency, and I do think that they're going to 0:24:20.480 --> 0:24:23.960 give this ruling a really close look. I mean, the 0:24:24.040 --> 0:24:28.560 Court in its current form has done taking a hard 0:24:28.600 --> 0:24:35.480 look at the administrative enforcement regime on multiple front in 0:24:35.520 --> 0:24:39.760 recent terms, whether it be the Federal Trade Commission, whether 0:24:39.800 --> 0:24:44.679 it be the EPA. Through this Major Questions doctrine that 0:24:44.760 --> 0:24:49.600 was decided last year, they're really a fresh look being 0:24:49.600 --> 0:24:53.200 taken at some of the things that those of us 0:24:53.280 --> 0:24:57.520 in government enforcement work have taken for granted for decades. 0:24:58.720 --> 0:25:01.760