Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

Statutory power cannot be treated as a single line item that nullifies all other practical aspects as to what the agency is charged to do before exercising that power, or what other liabilities had to be discharged before acting on that power.

Well said.

Todays WSJ:

The King and the Supreme Court

The Supreme Court hears one of the most consequential separation-of-powers cases in American history on Tuesday when it considers President Biden's unilateral student loan write-off. The question is nothing less than whether the President can steal Congress's power of the purse and act like a King.

Mr. Biden's claim of unilateral power to cancel $400 billion in debt is truly breathtaking, and he knew it. A month before taking office, Mr. Biden said it was "pretty questionable," whether he had the power to cancel student debt. Then House Speaker Nancy Pelosi insisted in July 2021 that "it would take an act of Congress, not an executive order, to cancel student loan debt." Now the Administration is arguing otherwise in court.

---

In a naked ploy to buy votes from young people, Mr. Biden last summer invoked the Covid emergency to cancel student debt for 95% of borrowers. The Administration invoked the 2003 Higher Education Relief Opportunities for Students (Heroes) Act as its authority. The law says the Education Secretary can waive or modify any statutory or regulatory provision related to federal student aid when "necessary in connection with a war or other military operation or national emergency."

But the law was intended to help students in the military and explicitly limited relief to those borrowers "affected" by an emergency or war. Before the pandemic, the provision was rarely used and only to make discrete changes. The Trump and Biden Administrations stretched the law to extend a student-loan payment pause that Congress had enacted in March 2020. Now the Biden Administration says the law sweeps so broadly that it can forgive debt for nearly all borrowers.

It doesn't. As states argue in Biden v. Nebraska, the Administration hasn't shown that all borrowers who will receive relief have been adversely affected by the pandemic. Some studies have found borrowers are financially better off than before Covid. The White House even declared last September that "household finances are stronger than pre-pandemic."

The Administration isn't merely waiving or modifying discrete provisions. It's rewriting the federal student loan program wholesale. As the High Court emphasized in its landmark West Virginia v. EPA decision last year, executive actions involving questions of major political and economic significance require "clear congressional authorization."

The Administration knows its defense is weak, which is why it has fallen back on the argument that the suing states aren't harmed so they lack legal standing to sue. This is also wrong. Missouri is suing on behalf of its student-loan servicer, the Higher Education Loan Authority of the State of Missouri (Mohela). Mohela uses loan-servicing revenue, which will be reduced by the loan cancellation, to provide financial aid to students and make mandatory payments to the state treasury.

Nebraska and Arkansas state agencies are invested in privately originated Federal Family Education Loans (FFEL). The Administration made only Direct Loans originated by the government eligible for forgiveness, which encouraged borrowers to consolidate their debt. As a result, the two states say their agencies will generate less income.

Immediately after the states sued, the Administration tried to moot their challenge by excluding future consolidated loans from forgiveness. But as the states note, the government "raises a mootness issue -- not a standing question -- and the Government has not met its heavy burden to show that it will not reopen the consolidation pathway."

The High Court underscored in West Virginia that "'voluntary cessation does not moot a case' unless it is 'absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.'" Mr. Biden is almost certain to expand eligibility for loan forgiveness in the future unless the Court clearly says he can't.

Borrowers challenging the loan write-off in D epartment of Education v. Brown have a weaker case on standing. They say the Administration violated their procedural rights by circumventing the rule-making process. The plaintiffs say they may have qualified for more debt relief had the Administration conducted notice and comment. Even though they haven't suffered a concrete injury and thus may lack standing, they make an important point about how the Administration bypassed Congress and the law on rule-making.

---

It's hard to overstate the stakes in this case. If a President can get away with this power-play, it's hard to see what limit would be left on executive rule. Find a statute that offers power in an "emergency," declare such an emergency, and then do whatever you want or spend whatever you want. The Founders would be appalled.

The Justices have already rebuked Mr. Biden for exceeding his power on a vaccine mandate and rental eviction moratorium. The Justices have another chance to make clear to Mr. Biden, in forceful terms, that he isn't King John before the Magna Carta, and that the courts won't tolerate his continuing disdain for the constitutional limits on his power.

The King, Student-Loan Forgiveness, and the Supreme Court; The Justices hear an historic case on the limits of presidential power.