The first lawsuit has been filed against this illegal student loan move, which is now estimated to cost between $420 billion and $1 trillion after the administration said it would be $240 billion.
Amid the government’s prosperity-killing progressive wave, there’s a piece of good news regarding a major stubbing of the foot by Team Biden that has infuriated voters: The first lawsuit has been filed against President Biden’s illegal student loan cancellation.
This is an issue that refuses to go away. It’s a gigantic mistake of unconstitutional executive overreach — making the middle class pay for rich people; making people who paid off their loans finance those who did not.
By the way, the CBO just scored it at a $420 billion price tag, which will provide plenty of spare cash for the loan delinquents to bid up prices and raise inflation. Did I mention that the Bidens originally scored this at $240 billion? Oops.
Just a couple hundred-billion dollars in phony accounting to try to make people believe the Bidens are worried about budget deficits and inflation. The progressive liberals never worry about inflation, though, and always love to spend more government money. Wait a minute, did I say government money? I meant taxpayer money. Think of that.
The Committee for a Responsible Federal Budget scored this loan cancellation fiasco at more than $500 billion, and the Penn Wharton economic model said it could be as high as $1 trillion. Like I say, people are furious at this.
Robert Cahaly of the highly respected Trafalgar Group poll says that he hasn’t seen any issue in a long time that motivates people as much as opposition to Mr. Biden’s student loan forgiveness, saying that “nothing touches it.” So, politically and financially, the Bidens have kind of been caught with their pants down.
Now, going back to the very good news: The first lawsuit has been filed against this illegal student loan move.
A chap named Frank Garrison, alongside the Pacific Legal Foundation, filed a case in the U.S. District Court for the Southern District of Indiana. Mr. Garrison will be worse off because of the cancellation: He will face an immediate tax liability because of the automatic cancellation of a portion of his debt.
In addition to Indiana, there are four other states that will tax loan forgiveness: Wisconsin, Minnesota, Arkansas, and North Carolina. As of now, Mr. Garrison is an enrollee in the public service loan forgiveness program that Congress created. The state of Indiana would ordinarily let him off because of his public service, but the Biden executive order automatically creates a taxable event where federal policy overrides the state’s.
Moreover, because of the structure of this so-called emergency order, Mr. Garrison gets only a one-time benefit, not a future flow of benefits that would have helped him under prior (and current) law.
So, he’s been injured. His financial future has been damaged, and that’s what gives him standing to file this lawsuit.
Because of the unpopularity of Mr. Biden’s student loan cancellation, you can bet the courts are going to move this lawsuit — and, by the way, Mr. Biden’s executive order was blatantly unconstitutional in the first place.
Why? Because this gigantic $420 billion — maybe $500 billion, maybe $1 trillion — certainly qualifies as a vast economic and politically significant executive action, but the recent Supreme Court decision in West Virginia v. EPA ruled that vast, economically significant executive actions must — must — have clear congressional authorization. Mr. Biden didn’t get this.
He’s calling this a Covid national emergency and under that old law, which was designed originally for military veterans, he has no authority to kill off a trillion dollars’ worth of student loans while the rest of the country fumes.
Now that I think about it, didn’t Mr. Biden just say Covid is over? The pandemic is over? So what happened to the national emergency? Heck, give us the trillion dollars back, and give this Garrison chap a medal. Then, hold your breath while we wait for the cavalry to come.
Larry Kudlow was the Director of the National Economic Council under President Trump from 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. and his radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.
From Larry Kudlow’s broadcast on Fox Business News.