Category Archives: Executive Authority

Tariff Challenges at the High Court

12 Friday Sep 2025

Posted by in Executive Authority, Tariffs

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The world doesn’t ordinarily revolve around tariffs, but so much has happened to make tariffs into an economic and political linchpin of the moment. Donald Trump put them in the spotlight, of course, and while he’s still seeing roses, things won’t turn out entirely the way he hopes. At the tariff levels he’s instituted, this shouldn’t be too surprising.

While tariff revenue is helping to shave the federal budget deficit, the tax falls largely on the backs of American consumers and businesses with all the attending distortions that entails. Sadly, the extra revenue also seems to have offered a handy excuse to put spending cuts on the back burner. Tariffs and tariff uncertainty have businesses attempting to compromise between reduced margins and price hikes. Thinning margins due to tariffs have played a role in the weak employment numbers we’ve seen over the past few months. And tariffs, at least until now, have quite rightly reinforced the Federal Reserve’s cautious stance toward easing policy. However, the weak labor market has likely convinced the Fed to cut its short-term interest rate target, despite inflation stubbornly remaining well above the Fed’s 2% objective. That upward price pressure will remain.

Now, the legal battle over Trump’s tariff authority is about to reach a climax. That’s what I’ll focus on here. The Supreme Court has agreed to fast track the challenge to the President’s discretion to impose retaliatory tariffs unilaterally. There are two cases at hand: V.O.S. Selections, Inc. v. Trump, and Learning Resources, Inc., et al. v. Donald Trump et al. In both cases, small business plaintiffs contend that Trump’s invocation of the International Emergency Economic Powers Act (IEEPA) is unwarranted, and that “most” of the tariff actions taken by Trump have usurped Congress’ power of the purse under Article I of the Constitution. Here’s Ilya Somin, who is a Volokh Conspiracy regular and one of the attorneys representing the plaintiffs:

“… IEEPA doesn’t even mention tariffs and has never previously been used to impose them, that there is no ‘unusual and extraordinary threat’ of the kind required to invoke IEEPA, the major questions doctrine, the constitutional nondelegation doctrine, and more.“

This isn’t the first time a U.S. president has imposed tariffs unilaterally, but it is easily the most drastic such action. Historically, nearly all tariffs were levied by acts of Congress. Prior to Trump II, perhaps the broadest tariff imposed by a President was Richard Nixon’s brief 10% surcharge on all imports, but that was lifted quickly. Presidents Johnson and Obama imposed some selective tariffs. All of these episodes seem piddling compared to Trump’s tariffs, which are both sweeping and in many cases painfully selective.

Eric Boehm notes that when it comes to major constitutional questions, the Court has taken the position that

“… executive power should be construed narrowly, not broadly …. Rather than tying itself into knots to affirm nearly unlimited executive powers over commerce, the Supreme Court should tell the Trump administration to get permission from Congress before imposing new tariffs.“

I believe that will be the general shape of the outcome here. Maybe there’s a way for the Court to allow the tariffs to stand until Congress decides to “man up”, acting one way or the other. SCOTUS would probably like to do just that! Or maybe the Court could stay the lower court’s injunction until the case is heard by the Court in full on the regular docket, or until Congress acts.

There’s a decent chance, however, that Trump’s tariffs will be struck down, leaving it up to tariff supporters in Congress to lay down statutory rules rather than put up with the impulsive craziness we’ve witnessed thus far. If the Court lets the tariffs stand, it leaves the door open for new tests on the limits of executive discretion. Here is Greg Ip at the link:

“There would also be no end to uncertainty. ‘Unlike most other tariff authorities, these tariffs are not enshrined in statute, there’s no process to change them, and they can change very rapidly, in a day, without much notice, as we’ve seen,’ said Greta Peisch, a trade attorney at Wiley Rein and former general counsel for the U.S. trade representative.“

We’ve already seen strong hints that the Administration would like to force businesses to eat the cost of the tariffs rather than pass them along to consumers in higher prices. There hasn’t been any formal action of this kind by the Administration, at least not yet. Still, one can hardly blame businesses who might perceive an implicit threat if they fail to comply. That kind of bullying represents an a massive abuse of power. The Court could do everyone a big favor by clarifying that the authority to impose tariffs rests with Congress.

Harms Dismissed In “Standing Dead Zone” of Executive Action

26 Friday Aug 2022

Posted by in Checks and Balances, Executive Authority, Student Loans

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I hate to contribute to the deluge of ink spilled over Joe Biden’s latest executive action, which forgives massive amounts of federal student loan debt, but there’s an angle that hasn’t received adequate treatment. Of course, Biden’s action is an abridgment of taxpayer rights, a violation of the separation of powers, and an affront to borrowers who already paid off their student loans, but it will be nearly impossible for any challenger(s) to show that they have standing in court. Writing in the Virginia Law Review earlier this year, Jack V. Hoover says this kind of action lies within what he calls a “standing dead zone” created by the courts.

I’ll start with a few preliminaries. Note that student loan forgiveness was NOT legislated, unlike the Paycheck Protection Program, which the Administration keeps referencing in defense of the action. And I’d be remiss if I failed to mention that Biden’s action looks like a pathetic attempt to salvage votes ahead of what some democrats fear could be a disastrous midterm election. In addition, the action is regressive, with benefits weighted heavily toward high-income debtors with graduate degrees. The cost (write down, loss) to the federal government was originally said to be near $300 billion, depending on uptake, but independent estimates now put the full cost at $600 billion. This wipes out the hoped-for deficit reduction in the ridiculous but much ballyhooed “Inflation Reduction Act”, and yes, student loan forgiveness may well be inflationary. At a minimum, it makes the Fed’s job of restraining inflation by tamping down demand that much harder. Loan forgiveness will not solve the underlying problem of runaway cost escalation in higher education. In fact, it will exacerbate the problem by encouraging non-payment and additional borrowing, while tuition to colleges and universities will escalate all the more. So this is really bad policy all the way around!

Biden’s action is clearly a huge stretch on statutory grounds. In particular, the Administration invoked the HEROES Act, which authorizes the Secretary of Education to waive loan requirements during periods of national emergency. In this case, the Administration appeals to hardships caused by the pandemic for individuals with student debt. Of course, just two weeks ago, the CDC rolled back their emergency pandemic guidelines on social distancing and quarantines, so the “emergency” seems to be over, officially. Also, the Administration recently ended the “return to Mexico” policy at the border on the pretext that it had only been necessary because of the pandemic! Pardon my incredulity, but playing the “pandemic card” at this point is both dishonest and hypocritical.

“Standing” in the legal sense can’t be found in the text of the Constitution. It was itself created by the courts. Even so, why do taxpayers, Congress, or past borrowers lack standing to challenge the action on student loans through the judicial system? How can that be when the harms are so obvious? Well, courts tend to avoid interfering with the executive branch, and they’d rather leave such disputes up to the political system to hash out. That doesn’t seem like a terribly effective way to practice the game of “checks and balances”. Nevertheless, for many years the courts have relied on a strict test for establishing plaintiff standing promulgated in the Supreme Court decision in Lujan v. Defenders of Wildlife. In that majority opinion, Justice Antonin Scalia laid out a three-part test, which Hoover describes thusly:

“… (1) injury in fact that is actual, concrete, and particularized; (2) a causal connection between the injury and the conduct complained of; and (3) a likelihood that exercise of judicial power will redress the injury.28 The Court furthermore differentiated between cases in which government regulation targets the plaintiff and cases where the plaintiff complains about ‘unlawful regulation (or lack of regulation) of someone else,’ in which case “much more is needed” for standing to exist.29 The Court has regularly reaffirmed this formulation of its standing requirements.3”

Hoover discusses the executive’s authority to cancel debt under the Higher Education Act (HEA) of 1965. In terms of the impregnability of Biden’s action to legal challenge, Hoover implies that the president might just as well have fallen back on HEA as HEROES. However, the Department of Education (DOE) opined last year that it lacked the power to forgive debt. Here’s what the DOE said in 2021:

“… the Secretary does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or materially modify the repayment amounts or terms thereof, whether due to the COVID-19 pandemic or for any other reason.”

Hoover seems to be saying that it is all but impossible to challenge Biden’s bald assertion of extra-legal power in forgiving student loans. Hoover goes on to discuss all classes of potential litigants who might challenge student loan forgiveness: taxpayers, former borrowers, Congress, state governments, and loan servicers. He is skeptical of all those, citing various reasons for their lack of standing, but I’ll focus on only the first three classes.

Taxpayers: The logic of denying taxpayers standing is at least two-fold. First, taxpayers cannot show direct harm from the action, though they are likely to pay a higher inflation tax over time as a consequence. Second, Congress appropriated funds for student loans, but it did so as an entitlement, and it did not restrict loan amounts nor the executive’s ability to waive “the government’s claim that borrowers must return the funds to the Treasury”. Hoover believes that the courts would defer to the political branches of government in settling such issues. The whole thing sounds rather thin to my ears, but precedent will probably hold sway unless the Supreme Court revisits its position on standing.

Congress: The standing of Congress is another matter. If, in the view of the legislature, an executive agency has exceeded its statutory authority, the matter might reflect as much on Congress as elsewhere, in failing to provide adequate limitations, guideposts, or oversight. However, in this case:,

“Congress duly appropriated funds for student loans,83 and the Executive is responsible for the funding’s disbursement. This means that any claim of standing due to institutional injury from compromising Congress’s control of the federal purse would fail.”

Here again, it will be left to settle by the political branches of government. To avoid such conflicts, it is up to the legislature to write laws that bind the discretion of the executive to varying degrees. Unrestrained entitlements are a damn good way to cede control of the “keys to the Treasury”.

Other borrowers who’ve managed their student loan debt responsibly will also lack standing, according to Hoover. Like taxpayers, they cannot show any direct harm or injury. In addition, standing is difficult to establish when an action or inaction by an executive agency pertains to someone else.

It’s my hope that a court challenge will be brought all the way to the Supreme Court, and at some level a court will define a new standard or test under which plaintiffs can attempt to establish standing against executive or agency actions. This is sorely needed as a check on the explosive growth of the administrative state. Furthermore, the “standing dead zone” allows all sorts of politically-motivated mischief by the executive branch, and the Biden Administration seems more than willing to push executive authority to extremes. However, I’m not too optimistic about the possibility of a new test for standing. Before all is said and done, Biden is likely to expand student loan forgiveness well beyond $20,000 per borrower. Federal finance is looking more precarious with Biden’s every step, and many of those steps cannot be walked back by Congress, no matter who holds the majority.

Joe’s “Boom”: Mendacity or Memory Loss?

06 Tuesday Oct 2020

Posted by in economic growth, Executive Authority

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Joe Biden has claimed that he and Barack Obama had left Donald Trump with a “booming” economy to start his term in office. Of course, if he had anything to do with economic performance during the Obama Administration, it may have been his oversight of the mismanaged and ineffective “shovel-ready” stimulus program of 2009, For his sake, one might hope (and suspect) his oversight was nominal. In any case, his characterization of the Obama economy is not really accurate, as this editorial at Issues and Insights demonstrates. I could argue with a few of their points, but the thrust of it is correct. The economy weakened in 2015 and 2016, and expectations were for continued slow growth or possibly a recession in 2017 or after. At that point, many economists thought the aging expansion might be on its last legs. But economic growth exceeded expectations after Trump took office. As for job growth, economists predicted relatively sluggish growth in 2017-2019, but actual job growth exceeded those projections by more than three times.

Finally, Biden’s assertion that “Trump caused the recession” was laughable, especially when the punchline is his willingness to “shut down the economy“! He insists “I would listen to the scientists”, presumably the same knuckleheads who don’t understand the public health tradeoffs between the pandemic itself and lockdown risks (and who don’t understand the Constitution). Biden might not understand that the President lacks constitutional powers to demand a nationwide shutdown. Trump was quite sensibly persuaded to leave non-pharmaceutical interventions in the hands of the private sector as well as state and local governments, with guidance from federal health authorities. That some state and local leaders instituted draconian policies, which were largely ineffective and often damaging. was and is a terrible misfortune. The more sensible approach is to  protect the most vulnerable and allow others to gauge their own risks, as we always have in earlier pandemics.

An Immigration Reform Dream: What’s Trump’s Price?

08 Friday Sep 2017

Posted by in Executive Authority, Immigration

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Two major issues weigh on critics and supporters of President Trump’s rescission of DACA, President Obama’s 2012 executive order establishing the Deferred Action on Childhood Arrivals program. First is the treatment of individuals who entered the U.S. illegally prior to mid-2007 at less than 16 years of age (and who were 30 or younger in 2012). Under Trump’s new order, these individuals would be subject to deportation in March 2018 or later, depending on their remaining DACA eligibility and the status of any renewal application already filed by then.

As an isolated question, draconian treatment of so-called “Dreamers” (taken from the “Dream Act”, which never made it through Congress) is difficult to justify. These individuals did not arrive here by choice or through any fault of their own, and the vast majority are now productive members of society. The problem, however, is the usual argument against amnesty: it creates an incentive for would-be immigrants to circumvent the legal immigration process in the hope of later forgiveness. If children of illegals are subject to lenient treatment once in the U.S., it probably magnifies that incentive. While some take a hard line with respect to deporting today’s Dreamers, many critics of DACA are strongly sympathetic to their plight.

The second issue defines another basis for opposition to DACA: the questionable legality of Obama’s original order. Obama issued another executive order in 2014 that essentially expanded DACA. That later order, already rescinded by Trump in June, was likely to be overturned by the Supreme Court. This article quotes from the majority opinion of the U.S. Fifth Circuit Court of Appeals:

“The administration’s interpretation of the Immigration and Naturalization Act, [5th Circuit Judge] Smith wrote, would effectively vest the Secretary of Homeland Security with the power ‘to grant lawful presence and work authorization to any illegal alien in the United States—an untenable position in light of the INA’s intricate system of immigration classifications and employment eligibility.’ In other words, Smith wrote, ‘the INA flatly does not permit the reclassification of millions of illegal aliens as lawfully present and thereby make them newly eligible for a host of federal and state benefits, including work authorization.’“

The key here is the clause “making them newly eligible for a host of federal and state benefits” without proper legislative authorization. In other words, Obama exceeded his authority. The original DACA order suffers from the same defect as the extension, and it was likely to be challenged as well. However, Ilya Somin has defended DACA as a matter of “prosecutorial discretion”, which was Obama’s original rationale for not enforcing immigration law for Dreamers. (But there is suspicion that the likelihood of adding to Democrat voter rolls appealed to Obama.) Enforcement against the children of illegal immigrants, Somin contends, is simply bad policy of the sort routinely avoided by prosecutors. In 2013, Zachary Price addressed this defense of DACA, including the application of earlier statutes specifically allowing discretion in immigration enforcement (also see this post by Michael Ramsey):

“The immigration [DACA] policy, in contrast, provides a more definite and specific guarantee of non-enforcement to a broad category of undocumented immigrants who fall squarely within the scope of removal statutes. … It’s worth noting (as some folks have helpfully pointed out to me) that the Obama Administration has maintained vigorous enforcement with respect to other groups of undocumented immigrants. But DACA goes beyond simply turning a blind eye to their unlawful presence in the country. It effectively grants a form of lawful status not contemplated by the applicable statutes through an exercise of prosecutorial discretion.

It’s true that there is a history to the practice of deferred action. Although this form of relief originated in executive practice, it’s now mentioned in several statutes, so to some degree at least Congress may have ratified it. … Yet the practice (as I understand it) originated as a form of case-by-case humanitarian relief. While immigration officials have used it categorically a few times in the past (for instance, to grant relief to immigrant students affected by Hurricane Katrina), I’m not aware of it ever being used for as broad and significant a group of immigrants as in the DACA program. So I think it’s hard to claim that there’s been even an implicit ratification of the practice sufficient to support the DACA program.“

Legislative action — a new attempt at some kind of Dream Act — could resolve the dilemma faced by Dreamers and their defenders while avoiding the legal objections to unrestrained executive authority. It’s likely that Trump is willing to exchange a continuation of the DACA regime, or even complete amnesty for Dreamers, to achieve other priorities, such as funding for his ballyhooed border wall. One could accuse Trump of using the Dreamers as pawns — why else would he have agreed to a grace period of six months? And why did he say, subsequently, that he would “revisit DACA” if Congress failed to act? That might give him some leverage with those who oppose DACA on the legal grounds discussed above, but it might undermine his ability to cut a deal for the wall or any other priority with Democrats.

David Harsanyi writes in The Federalist that “Rescinding DACA Is the Right Thing To Do“:

“If there’s one thing that exemplified Obama’s administration, it was its embrace of executive unilateralism. No administration in memory was stopped more often by courts on this front—often by unanimous Supreme Court decisions. … The Constitution makes no allowance for the president to write law ‘if Congress doesn’t act.’“

Somin notes that rescinding DACA, and even passing a law in this case, will do nothing to prevent this and future presidents from exercising excessive authority. That’s certainly true, but rectifying a case in which that authority was exceeded, along with recognition of the constitutional limits on executive authority, is worthwhile.

Congress should pass legislation offering relief to the Dreamers. In a best case scenario, new legislation would provide them with a clear path to citizenship, and it would also reform existing immigration law to allow for greater flows of immigrants through the legal process. Those provisions might come at the cost of building a wall, as well as funds for tougher immigration enforcement. And Trump has made merit-based criteria for issuing green cards and accepting immigrants a priority. That’s fine as long as: 1) “merit” is defined partly by economic needs, such as low-skilled farm labor; and 2) there is some sort of navigable process for refugees.

While the prospect of allowing Dreamers to be used as political pawns might be repugnant, the end result could be worthwhile. And we shouldn’t forget that some of those Dreamers, as children, were probably used as pawns by the very parents who brought them here.