SCOTUS signals doubts on student loan forgiveness

Feb 28, 2023

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BREAKING — JULIE SU will be President JOE BIDEN’s pick for his next Labor secretary, our colleagues Burgess Everett and Nick Wu scooped. The current deputy secretary had been seen as the frontrunner to replace MARTY WALSH, with backing from progressives and Asian Americans. But her “confirmation fight could be a tough one in the Senate; she was confirmed 50-47 to her slot in 2021.”

Justice Ketanji Brown Jackson, left, is escorted by Chief Justice of the United States John Roberts following her formal investiture ceremony at the Supreme Court in Washington, Friday, Sept. 30, 2022. (AP Photo/J. Scott Applewhite)

Chief Justice John Roberts sounded skeptical of the Biden administration’s contention that its massive cancellation of debt would amount to a modification of loan programs. | J. Scott Applewhite/AP Photo

SCOTUS WATCH — In hearings today, the Supreme Court’s conservative majority broadcast some major questions about the Biden administration’s legal authority to waive billions of dollars in student loan debt. Though the second of two cases (brought by student borrowers) is still ongoing, the court already wrapped up arguments in the first, brought by six Republican-led states.

Appropriately enough, the “major questions doctrine” is the judicial test that the justices could use to invalidate the policy, as they have for other executive branch policies that they said lacked sufficient authorization from Congress. Either way, the ruling could have major ramifications for millions of Americans’ finances. Latest recap from Reuters

With conservatives skeptical of the student loan relief move, experts have said the Biden administration’s best hope might be persuading the high court that the plaintiffs lack standing to sue in the cases. And the three liberal justices trained some of their questions in that direction. Here are some of the most notable moments so far from debt cancellation’s day in court:

— The standing: Justice KETANJI BROWN JACKSON said she was “concerned that we’re going to have a problem in terms of the federal government’s ability to operate” if the court opened the door to more lawsuits like this. Justice AMY CONEY BARRETT asked a narrower question, wondering why the Higher Education Loan Authority of the State of Missouri, rather than the state of Missouri itself, hadn’t brought the case. (MOHELA “would have had clearer standing to sue,” notes NYT’s Stacy Cowley.)

— The policy: Chief Justice JOHN ROBERTS sounded skeptical of the Biden administration’s contention that its massive cancellation of debt would amount to a modification of loan programs. “It might be good English to say that the French Revolution modified the status of the French nobility, but only because there’s a figure of speech called understatement and a literary device known as sarcasm,” the chief quipped. Justice CLARENCE THOMAS also questioned whether the erasure of debt amounts to a de facto grant — and might therefore infringe on Congress’ authority to appropriate funds.

— The impact: Justices across the spectrum raised questions about the real-world impact of allowing the policy to go through. Justice NEIL GORSUCH said the Biden administration’s analysis failed to take into account the unfairness to people who had already paid off their loans or never had them. On the flip side, Justice SONIA SOTOMAYOR said she worried about borrowers being forced to default if the loan relief didn’t arrive — and indicated that the policy would be better left to the Education secretary than to judges.

FLORIDA MAN GOES NATIONAL — Florida Gov. RON DeSANTIS is finally hitting the road in key presidential primary states, likely heading to Iowa, Nevada and New Hampshire in the coming weeks, NYT’s Maggie Haberman scooped. He’s considering a South Carolina stop too. Having not officially jumped into the presidential race yet, DeSantis is making stops for speaking engagements in conjunction with his new book out today, “The Courage to Be Free” ($28) — though it’s not an official book tour — and his record in Florida. The governor will also be at the Ronald Reagan Presidential Library on Sunday and is planning stops in New York and other states.

Meanwhile, “The Courage to Be Free” is already No. 1 on Amazon, per the WSJ.

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ALL POLITICS

KNIVES OUT FOR MATT SCHLAPP — It’s not just the sexual misconduct allegation. As the Conservative Political Action Conference kicks off this week, WaPo’s Beth Reinhard and Isaac Arnsdorf have a new story out detailing concerns about the group’s leader and the work culture he’s created at CPAC. In response, the organization says the Post is trying to silence a conservative. Among the story’s findings:

The majority of CPAC’s staff has turned over in the past two years.
“Some expressed concern that Schlapp has given an inexperienced contractor too much influence. One former employee notified the U.S. Equal Employment Opportunity Commission last month of plans to sue over claims that she was fired in retaliation for complaining about a co-worker’s sexist and racist comments.”
In past jobs, Schlapp has faced complaints that he made offensive remarks, including an anti-gay comment that preceded his departure from Koch Industries.
Some CPAC board members are worried that the sexual misconduct allegation threatens the organization’s reputation, though many are standing by Schlapp.
Sales of tickets to the conference are down, “prompting price cuts, giveaways and a special rate offered to congressional staff.”
The man alleging sexual misconduct has texts, calls, videos and family/friend recollections that “broadly match” his description of Schlapp’s behavior.

CASH DASH — Rep. ELISSA SLOTKIN (D-Mich.) pulled in $1.2 million in the first day after she announced her Senate campaign, per Punchbowl’s Max Cohen.

MICHIGAN GOP IN TURMOIL — The ascendance of KRISTINA KARAMO as Michigan GOP chair has the party riven by infighting and worried that they’ll struggle to win elections, The Dispatch’s David Drucker reports. It’s not just talk: The “sprawling Republican establishment of operatives, donors, elected officials, and allied industry groups is breaking ranks with the state party … [and] instead directing money, manpower, and other crucial resources to a collection of conservative outside groups.”

WHETHER PERMITTING — A new group, Building a Better America, aims to raise $10 million to pressure Congress to pass energy permitting reform legislation, Zack Colman scoops. BILL KOETZLE is leading the effort, which also includes allies of former VP MIKE PENCE (MARC SHORT, TIM CHAPMAN, KATIE MILLER), DeSantis (PHIL COX) and Sen. JOE MANCHIN (D-W.Va.) (JONATHAN KOTT). The 501(c)(4) plans to focus on swing-state Dems, especially vulnerable senators, to marshal support for changes that would benefit both fossil fuels and renewable energy. It’s “pitching its plan as a bipartisan play to both lower energy prices and quickly build clean power projects to meet Biden’s climate goals.”

BAILING OUT — Wisconsin liberals had a strong showing in this month’s primary for a crucial state Supreme Court seat. But conservatives could see a turnout benefit in April from a proposed constitutional amendment to undercut bail for violent criminals that’ll be on the ballot simultaneously, NBC’s Adam Edelman reports. Cash bail could become a significant issue in the campaign, though the amendment has the backing of both candidates for the high court. The measure would give judges more leniency to get tougher when they set bail.

ELECTION DAY — “As Lightfoot Tries for Second Term, Jabs Go From Friendly to Harsh,” by NYT’s Julie Bosman in Chicago: “The blunt, tough-talking persona that earned [Mayor LORI] LIGHTFOOT early affection and respect turned into something else: the image of a mayor with an exhausting capacity for feuds and insults, whether aimed at her own staff, city employees or fellow elected officials.”

IMMIGRATION DISSENT — “Latino Republicans push back on party’s immigration agenda,” by AP’s Adriana Gomez Licon: “The party’s future may well depend on broadening its appeal beyond an aging, predominantly white base of support. And while some conservative Latinos support hard-line immigration policies, there’s a risk that the GOP could repel other persuadable Latinos by moving too far to the right on the issue.”

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POLICY CORNER

DIPPING INTO CHIPS — As the Commerce Department today rolls out the application for billions of dollars in semiconductor chip manufacturing, the Pentagon stands to benefit from close involvement, WSJ’s Yuka Hayashi scoops. Commerce Secretary GINA RAIMONDO, who’s on a media tour today, says DOD will have access to the facilities that receive the federal funds, since lots of military equipment requires the semiconductors.

SPY GAMES — “Top Biden officials warn about pending lapse of spy law,” by WaPo’s Ellen Nakashima: “Politicians from the left and right are taking aim at Section 702 — a law whose expiration the administration contends would dramatically harm intelligence collection on China, Russia, North Korea and Iran.”

THE ELECTRIC SLIDE — Yet another labor challenge facing the implementation of the Inflation Reduction Act: The country doesn’t have enough electricians to facilitate the clean energy transition as it ramps up, WSJ’s Amrith Ramkumar reports. “Electricians say they are booked several months out and struggling to find enough workers to keep up with demand. Many are raising wages and prices and worried that they won’t be able to keep up as government climate incentives kick in.”

MEDIAWATCH

MORE WAPO TURMOIL — JONATHAN CAPEHART quit the WaPo editorial board in December, Axios’ Sara Fischer reports today. Now the editorial board has no people of color after his departure. Fischer cites a dispute over this editorial — which called for Georgia to go early in the 2024 presidential primary order — as the impetus for Capehart leaving. It’s not clear what the disagreement centered on. He’d been an editorial board member since 2007, and is still a columnist and associate editor for the Post.

AMERICA AND THE WORLD

HUAWEI OR THE HIGHWAY — “Huawei Export Licenses Could be Revoked by U.S.,” by WSJ’s Ian Talley and Asa Fitch: “The administration previously indicated that it was considering not granting any new export licenses to companies such as Qualcomm Inc. and Intel Corp. … The new action would take that a step further by revoking existing licenses.”

WAR IN UKRAINE

MANCHIN’S VIEW — The West Virginian is holding firm in support of U.S. aid to Ukraine: “I have never seen in conflicts more than this one the definition of a just war,” he tells Semafor’s Steve Clemons, “and this so far without really risking and shedding American blood.”

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PLAYBOOKERS

OUT AND ABOUT — Independent Women’s Forum launched its fifth policy center, the Center for Energy & Conservation, to be led by Mandy Gunasekara (more from Bloomberg Law). At a private launch event yesterday at the Capitol Hill Club, speakers included Alaska Gov. Mike Dunleavy and Reps. Harriet Hageman (R-Wyo.) and Alex Mooney (R-W.Va.). Also SPOTTED: Carrie Lukas, Amber Schwartz, Ginny Gentles, Ashley MacLeay, Gabriella Hoffman, Carla Sands, DJ Norquist, Mike McKenna, Carrie Sheffield, Luke Bolar, Alexa Walker, Travis Fischer, Donna Jackson and Justin Schwab.

— SPOTTED at a Congressional Black Caucus Foundation reception last night honoring House Minority Leader Hakeem Jeffries at the National Building Museum: Reps. Terri Sewell (D-Ala.), Greg Meeks (D-N.Y.), Steven Horsford (D-Nev.), Steny Hoyer (D-Md.), Nanette Barragán (D-Calif.) and Suzan DelBene (D-Wash.), Tasha Cole, Marcus Mason, Tasia Jackson, Chaka Burgess, Stephanie Peters and Lyndon Boozer. Pic

— Sen. Mitt Romney (R-Utah) hosted a book party in the Lyndon Johnson Room for Capitol Counsel partner Martin Gold’s latest book, “Crosscurrents: U.S. Relations with Nationalist China, 1943-1960” ($125). SPOTTED: Elaine Chao, John Raffaelli, Allison Koppel, Margaret Cekuta, Celeste Gold and Rory Heslington.

MEDIA MOVE — Ledyard King is now NJ Daily managing editor at the National Journal. He previously was an assistant Washington editor for USA Today.

TRANSITIONS — Landon Heid is now a tech policy professional staff member for the House Select Committee on China. He most recently was a tech policy officer for technology competition in the State Department’s Office of China Coordination. … Kate Yeager is now a project manager at the International Brotherhood of Teamsters. She previously was a senior associate at the American Economic Liberties Project. … Era Anagnosti is now a partner with DLA Piper’s SEC and capital markets practice. She previously was a partner at White & Chase and is an SEC alum. …

… Jordan Lieberman is now CEO at digital media company Powers Interactive. He most recently was SVP at FourthWall Media. … Kent Talbert is now investigative counsel for the House Education and the Workforce Committee. He is a former senior adviser to the deputy Education secretary in the Trump administration. … John Cox is now a partner at Newport LLC. He is a former managing director and partner at Boston Consulting Group and is a Bush HUD alum.

WEEKEND WEDDING — Matt Sommer, Republican staff director for the Senate Aging Committee, and Lauren Gillespie, director of operations for the Senate Foreign Relations Committee, got married Friday at the Line Hotel. They met in 2017 at a mutual friend’s party. Pic … Another pic

WELCOME TO THE WORLD — Lincoln Foran, economic policy adviser for Senate Finance ranking member Mike Crapo (R-Idaho), and Cristina Liebolt Foran, assistant general counsel at TeraWulf Inc., welcomed Susanna Foran on Feb. 17. Pic … Another pic

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Correction: Yesterday’s Playbook PM misspelled Sophia Cai’s name.

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