August 2022 – From the Peanut Gallery

Thoughts About Student Loan Forgiveness

Last week President Biden announced his long-awaited decision on using “executive authority” to forgive student loan debt held by the federal government. Ultimately there was little surprise as the announcement indicated that $10,000 per borrower earning less than $125,000 annually would be forgiven, a position essentially consistent with his campaign promise and widely telegraphed in the media in the lead up to the announcement. One wrinkle that I did not see predicted in advance is that borrowers who had received Pell grants would see loan forgiveness of $20,000.

The purpose of this post is to discuss some concerns about this decision and the arguments made for and against loan forgiveness. I am not going to address every argument for and against that I have seen in the media.

The first concern is whether the president indeed has the authority to forgive student loans in this way.((See Forbes‘ discussion of this question from January 2021.)) The issue was discussed on a PolitiFact posting last summer in some detail. You have to really dig deep into the coverage of the announcement to find a current story that addresses this important question. In the beginning of his term the president asked the secretary of education to prepare a memo on this question. For over a year this memo had never been released.((However, a redacted draft version was published by Insider last November.)) Suddenly a memo, written to the secretary of education by the department’s general counsel on August 23, 2022, argues (contrary to the conclusions of a similar inquiry undertaken at the end of the Trump administration((The Forbes article contains a hyperlink to this older memo, but clicking it results in a “404 – Page not found” error on the Department of Education website.))) that the secretary has legal authority to cancel student debt on a categorical basis under the Higher Education Relief Opportunities for Students (“HEROES”) Act of 2003 during a war or national emergency, which according the the memo includes the COVID-19 pandemic. This opinion is shared by the Office of Legal Counsel in the Department of Justice. 46 Op. O.L.C. __ (Aug. 24, 2022).)

Doubts or outright denials of the president’s authority to declare widespread forgiveness have been expressed not just by Republicans; last summer House Speaker Nancy Pelosi said the following in a press conference:

People think that the President of the United States – is this more on the subject than you ever want to know? Well, you’ll let me know. People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress. And I don’t even like to call it forgiveness because that implies a transgression. It’s not to be forgiven, just freeing people from those obligations.
. . . .
But the difference between the President – the President can’t do it. So that’s not even a discussion. Not everybody realizes that. But the President can only postpone, delay, but not forgive.
Transcript of Pelosi Weekly Press Conference Today [July 28, 2021]

A second concern is that the announced forgiveness is a one-off event, not a coherent program. Indeed, the Star-Ledger highlighted just this concern in last Friday’s edition by publishing on the front page an Associated Press story pointing out that it does not fix the underlying problem, the rising cost of college (more about this in a bit). (Although not available on NJ.com, the story can be found on the AP’s own website). Still, it will lead to expectations on the part of future borrowers that it will be repeated.

There are those who want to find an equivalence between this extraordinary student loan forgiveness and the forgiveness of loans under the Paycheck Protection Plan (PPP) at the beginning of the COVID pandemic. The White House twitter account identifies six Republican members of Congress as having had PPP loans forgiven. But, PPP loans were intended to be forgiven from the get-go, so long as the proceeds were used for specified purposes, primarily to continue to provide salaries, wages and benefits to the borrower’s employees. Remember March 2020, when governors all over the country declared emergencies and shut down the economy? The PPP loan program gave employers the ability to continue to pay employees, even if the stay at home orders prevented them from working. The purpose was to keep the economy from cratering. Oh, it was also authorized by Congress.

Then there’s the argument that this program is unfair to those who paid back their loans. While the new generation getting something an older generation didn’t may appear a bit unfair, but is it unfair that we enjoy indoor plumbing when our ancestors had to use an outhouse in the middle of winter?

I am more interested in the response of proponents of student loan forgiveness on this point, which is to cite the staggering increase in the cost of higher education. The White House’s announcement tells us “Since 1980, the total cost of both four-year public and four-year private college has nearly tripled, even after accounting for inflation.” Star-Ledger columnist Drew Shenemen says: “In 1970, prime boomer college age, the average yearly tuition for a four-year public university was $358. Tuition at private schools was a bit over a grand. In 2020, one year of tuition at a public university was over $10,000 nationally and $13,000 in New Jersey. Private tuition hit $38,000 nationally and $37,000 in Jersey.” This brings me to the point I made during last August’s great (in the sense of “long” or “arduous,” I suspect, rather than “wonderful”) trek into economic principles: broad-based demand-side subsidies tend to cause the price of the subsidized commodity to increase. As relevant here, the cost of higher education has increased at many times the rate of inflation generally. A significant cause of this increase is the existence of financial aid. Imagine a carrot on a stick attached to a horse, but out of reach. Any effort to address the affordability of higher education solely or primarily by giving money to its consumers to pay whatever the sellers (that is, colleges and universities) choose to charge, is rather like expecting the horse to be able to run fast enough to get the carrot.

And one final reference to COVID. As noted above, in March 2020 our economy was largely, and very suddenly, shut down. Lots of programs, in addition to PPP loans, were enacted as temporary, emergency measures to prevent economic disaster: $600 bonus unemployment benefits, eviction moratoria, mandated sick leave, to name a few. These were somewhat blunt and put in place hurriedly. For the most part they were not means-tested, there simply wasn’t time to fashion the programs in the same detail as one would normally expect. Once of these measures was a pause in the requirement to make payment toward student loans and the accrual of interest on these loans. The bluntness of this response, a pause regardless of how much, if any, income the borrower lost as a result of the pandemic, was excusable due to the urgency of the problem. Two and a half years later, that excuse no longer suffices. To the extent that student loan forgiveness is a response to COVID (and that is the legal basis being asserted), a closer fit should be required.

Jay Bohn

August 29, 2022

Freedom of Religion, As Long As You Agree With Me

My earlier posts involving First Amendment rights have dealt with the lukewarm support that is shown for the free speech rights of speakers with whom one disagrees.¹ In this post I am going to branch out a bit to the free exercise of religion (although free speech also applies to this example).

In an article published this past Monday, NJ.com reports that some residents of the Ocean Grove section of Neptune Township are concerned that the new beach pier that the religious organization that owns the land in the community is planning to construct to replace the prior pier that was destroyed by Superstorm Sandy, gasp, “too closely resembles a cross.”²

The article quotes a local resident, Doug Grote (described therein as a “retired” Methodist minister), whose follow-up guest column was published on NJ.com on Tuesday, as saying that the cross-shaped pier feels like “Christian bullying,” and reports that he has sought unidentified “intervention” by local and state officials.

As the article notes, Ocean Grove was initially founded as a religious retreat. The land is owned by the “The Ocean Grove Camp Meeting Association of The United Methodist Church” (OGCMA).((The OGCMA was formerly named “The Ocean Grove Camp Meeting Association of the Methodist Episcopal Church.”))

Ocean Grove is no longer a separate municipality. Although a Borough of Ocean Grove was established from part of Neptune Township following a referendum in 1920, it was dissolved following a court decision in 1921.((The Story of New Jersey’s Civil Boundaries 1606-1968.)) Therefore, Mr. Grote’s references to the “citizenry” of Ocean Grove is inaccurate at best.

The OGCMA continued to exercise certain governmental powers until the legislation providing for such powers was declared unconstitutional in 1979.((State v. Celmer, 80 N.J. 405. The article inaccurately characterizes the decision as “declar[ing OGCMA’s] charter unconstitutional.” The decision did not dissolve the OGCMA, but ruled that its “Board [of Trustees] cannot exercise essential governmental functions, make law or force compliance with its rules through the establishment of a municipal court and police department.”))

The OGCMA remains the owner of the land upon which it intends to construct the pier. According to the article, the pier has received the governmental approvals required for its construction, for which the OGCMA is paying with $750,000 of its own funds and another $550,000 especially raised for the purpose.

But apparently private ownership and religious expression are not enough for some. The article quotes a member of the local zoning board as saying that the cross-shaped pier necessarily represents Christian nationalism.

Although the cross is certainly a–if not the–preeminent symbol of Christianity, it is a basic shape (two line segments intersecting at more or less right angles) that long pre-dates its association with Christianity and continues to be seen in many places today (e.g., street intersections, the plus “+” sign, and a lower-case “t”) without any religious connotation. Indeed, the article quotes OGCMA’s president as responding to a question of whether the cross-shape is intentionally religious by saying merely that the shape is “highly functional.”((I do think this response is a bit too cute, but nonetheless accurate. The addition of the perpendicular arm of the cross to the pier increases its surface area without the need to extend the pier (which, I suspect, is probably not permitted) and thus increases its utility.))

Mr. Grote’s position is even more critical:

To me, any political power that would appear to bully its captive, vulnerable, secular citizenry into accepting a sectarian cross as the center of its cultural life is a likely human rights violator. With the pier’s construction set to begin soon, I fear that my faith’s lovely cross may soon become as toxic as a Trojan horse for Ocean Grove, Asbury Park, and all of New Jersey.

So, let’s do what democracy does best: Let’s let the politicians, the journalists, faith leaders, and advocacy groups ask the OGCMA to hold on to its $550,000 for a while until matters are investigated, all of its citizenry are consulted, and approve the cross-shaped pier, or not, just like democracy ought to work.

So, OGCMA’s right to religious expression on its own property must be subordinated to the sensibilities of those who do not share its religious views?

Jay Bohn

August 25, 2022

Post script

Mr. Grote’s guest column was published in today’s Star-Ledger, along with a follow-up on the original article that is also available on NJ.com.

The follow-up article continues to sow confusion about the OGCMA’s role by saying: “Under a complex charter, the association has authority over the land, beach and boardwalk in Ocean Grove, which is a small seaside section of Neptune Township in Monmouth County.” This statement implies that the land, beach and boardwalk are not the private property of the OGCMA and that somehow the association continues to exercise governmental authority rather than having the same rights as any property owner.

The follow-up also quotes another local resident as seeking political intervention: “It is time for our leaders, who are actually elected, to get involved to ensure that the protections afforded to us under the 1st Amendment to the U.S Constitution are not violated.” (You see, my First Amendment rights are more important than yours.)

J.B.B.
August 28, 2022

Free Speech is a Bitch; Free Speech, but Not for All Ideas. [↩]
The same article appears on page 1 of Tuesday’s edition of the Star-Ledger under the title “Pier plan in religious town crosses into controversy. [↩]

If You Thought the War on Drugs Was Bad, Try Cheating the Tax Man

In an opinion piece published on NJ.com on July 24, 2022 (Former AG: Local prosecutors need to step up and shut down New Jersey’s Illegal cannabis market), former New Jersey attorney general Chris Porrino urges rigorous enforcement action against unlicensed cannabis merchants whose “activity is unsupervised, unregulated, untaxed and potentially unsafe.” While criminal laws should be uniformly enforced (if only because the failure to do so breeds contempt for all law), is this not another war on drugs, this time for the benefit of tax collectors and those lucky (or connected) enough to get a license?

Jay Bohn

August 22, 2022

Ruminations on Political Parties

My recent post on the nascent political party Forward got me to thinking of the nature of political parties in our country. Although the existence of political parties could hardly have been a surprise to the framers, the Constitution does not expressly provide for them; they are extra-constitutional.((A digression on nomenclature. Without claiming to have coined the term, I have decided that extra-constitutional best describes a political institution for which the Constitution does not provide but which is not inconsistent with it. Other terms I considered were nonconstitutional and aconstitutional. I would use meta-constitutional to describe the nature of constitutions.

The term constitutional can be used in two similar, but distinct, senses. First, and most commonly, as the opposite of unconstitutional which connotes “contrary to;” and secondly as “based upon.”))

Fundamentally then, a political party is a more or less organized group of people seeking the election of candidates to public office under the party’s name. As such, political parties require no more legal recognition than any other private group. But in most states, some political parties are accorded a degree of recognition, most significantly in the form of a place on the general election ballot for the party’s nominees for public office.

In New Jersey such recognized political parties select their nominees by means of a partisan primary election. The members of the party (that is, those voters who have chosen to “affiliate” with the party by asking for that party’s ballot at the primary) choose the candidates who will run under the party name in the general election. (An alternative system, and what I believe Forward is advocating, is the use of primary elections to winnow the candidate field but not to award the party label to the winners, a non-partisan primary.) In addition to the party nominees the general election ballot will include independent candidates.

There is no inherent reason why a political party has to choose its candidates in this fashion; the party could hold a convention or authorize some committee to make the choice in the allegorical “smoke-filled room.”

Some years ago the idea was going around that the nominating process resulted in candidates who were considered to be on the “extreme” (that means bad) side of the party–I guess they were too partisan, so these people advocated open primaries, that is, a primary where anyone could choose to participate, whether affiliated with, or completely opposed to, the party’s principles. This was called an “open” primary. The constitutionality of such an open primary is tricky. In California Democratic Party v. Jones, 530 U.S. 567 (2000), a 7-2 majority held that California blanket primary system was an unconstitutional infringement on the rights of political parties’ to associate, while in Washington State Grange v. Washington State Republican Party, 552 U.S. 442 (2008), a somewhat different 7-2 majority upheld a “modified blanket primary” system.

Jay Bohn

August 18, 2022

Abortion Kills More Black than White Babies

Many supporters of a legal right to abortion argue that there is a racial aspect, but two of these arguments are in direct contradiction to each other.

Two politics reporters at FiveThirtyEight.com argue that the anti-abortion movement is concerned that not enough white babies are being born in the United States. They claim that “the anti-abortion movement, at its core, has always been about upholding white supremacy.” How The Fight To Ban Abortion Is Rooted In The ‘Great Replacement’ Theory

Others assert that restrictions on abortion will have a greater impact upon racial minorities, see e.g., from NPR Abortion is also about racial justice, experts and advocates say; and from The Atlantic Abortion’s Racial Gap.

Abortion rates do indeed vary by race and ethnicity:

I don’t get it. If the primary concern of abortion opponents is to preserve a white majority, they should favor abortion as it kills more Black and Hispanic babies.

Jay Bohn

August 15, 2022.

Way Too Early for Conclusions on Mar-a-Lago Search

A few days ago the FBI conducted a search of Donald Trump’s Florida home. Predictably the former president and others were appalled at this unprecedented action. Trump is quoted as say that the search was persecution by “Radical Left Democrats who desperately don’t want me to run for President in 2024.” House Republican leader Kevin McCarthy tweeted:

I’ve seen enough.
The Department of Justice has reached an intolerable state of weaponized politicization.
When Republicans take back the House, we will conduct immediate oversight on this department, follow the facts, and leave no stone unturned.
Attorney General Garland, preserve your documents and clear your calendar.
(1) Kevin McCarthy on Twitter: “Attorney General Garland: preserve your documents and clear your calendar. https://t.co/dStAjnwbAT” / Twitter

If Trump and McCarthy are correct, the raid was an abuse of power for political purposes, but it is far too early to come to that conclusion. Former New Jersey governor Chris Christie (who is also a former U.S. Attorney and knows a thing or three about criminal investigations of prominent political figures) points out that this was not just a decision by the FBI, but the Justice Department had to convince a federal judge that there was probable cause for the search. As Christie says, we “really don’t know what we don’t know,” so we need some patience.

For my part, I really doubt that this action was raw politics. There are just too many people involved with too much to lose and little to gain. While some people would no doubt be intimidated by an FBI search and “get the message,” who would think Donald Trump is one of them? Like Governor Christie, I look forward to the release of relevant information in due course.

Jay Bohn

August 11, 2022

Your Bias is Showing

The title of a story posted on NJ.com yesterday, Murphy signs costly auto insurance law that will affect 1.1M N.J. drivers, illustrates two of my gripes about commercial journalism these days, especially the on-line kind.

I believe that news articles should be primarily about providing the reader with facts. Other pieces, clearly labeled as “opinion” or “editorial”((I would prefer that the label “analysis” be reserved for much more in-depth reviews of an issue.)) can reflect the author’s point of view. I have found that adjectives and adverbs usually indicate the “article” is not primarily a factual presentation. In the story in question the title does not give the reader a clue about the nature of the auto insurance law, merely that it is, or will be, “costly.” Costly is bad, so the legislation must be as well. It turns out that the legislation raises the minimum liability limit for automobile insurance policies, which will naturally lead to an increase in the premiums. Whether this is good or bad is not my point, but that the title reflects the author’s value judgment.((Previous coverage of the issues suggested that proponents of the change were or were seeking to benefit personal injury attorneys.))

My other complaint is that the title, which is what appears on the site’s homepage, does not adequately convey what the article is about but instead serves as a piece of “click-bait” to excite the reader’s curiosity to go to the article (thus generating ad revenue). I know that’s what commercial journalism is about these days, but it is still annoying that my time is monetized in this way.

Jay Bohn

August 8, 2022

New Party’s Path “Forward” Requires Electoral Changes

On July 27, 2022, David Jolly (former Republican congressman from Florida), Christine Todd Whitman (former Republican governor of New Jersey), and Andrew Yang (former Democratic presidential and mayoral candidate) published an opinion piece announcing the merger of their respective political organizations into a new political party to be called “Forward.” Most third parties have failed. Here’s why ours won’t. (republished in the Perspective section of the Star-Ledger on July 31, 2022)

The new party’s goal is to “stake out” the “sensible center of our political system.” Not surprisingly its website is presently light on specific substantive policies (as is forcefully observed by Paul Waldman’s opinion Why the third-party talk from Forward goes nowhere), but does push several changes to the way our elections work (ranked-choice voting, nonpartisan primaries, and independent redistricting commissions) that would be necessary if the new party were to have any hope of electoral success.

Ranked-choice voting (sometimes called the single transferrable vote or instant runoff system) was recently used in the New York City mayor’s race and the primary for the election in Alaska to replace the late Representative Don King. The voter does not simply choose one candidate and reject the rest, the candidates are ranked from 1 to (whatever). All first-choice ballots are counted, the candidate with the fewest votes eliminated and those votes redistributed in accordance with the voter’s second choice, and so on until one candidate has a majority. Ranked choice voting is important to a new party because it avoids the perception that a vote for the party’s candidate is wasted or that the party will serve simply as a spoiler. Because ranked-choice voting allows the voter to express her true preferences without fear of her vote being wasted, I favor it.

Non-partisan primaries,((The initial op-ed announcing the new party used the term “open primary.” As I understand an “open primary,” any voter, whether registered with the party or not, gets to vote in its primary. Proponents of open primaries argue that they would discourage extremism (at the cost of preventing the party from articulating its own message), but it is also likely that it could be used to engender the nomination of unelectable candidates, much as some Democrats are reportedly doing by providing financial support to extreme Republican primary candidates.)) as explained by Forward, would have all candidates run against each other in the primary election with some smaller number advancing to the general election. This smaller number((Forward is not crystal clear on what this number would be. The examples where the system has been implemented have only the top two advance while Forward’s “solution” called for the implementation of a final five non-partisan primary system in as many jurisdictions as possible. )) could include several or no candidates from any particular political party.

As with all good-government groups, Forward opposes gerrymandering and believes that independent non-partisan or bipartisan redistricting commissions will ensure fairness. As I have previously explained, “the remedy for political gerrymandering is not simply to ban or limit the practice, but to articulate and adopt a comprehensive and coherent set of principles for how districts (if there are to be districts) should be drawn.” Until these principles are established, the delegation of the power to draw lines to independent commissions is putting the cart before the horse.

In an Evenly Divided Senate, It Takes 50 to Tango

Anyone paying attention to national politics is aware that the 2020 election resulted in a Senate divided 50/50 between Democrats and Republicans.((All right, this is technically not true as Senator Bernie Sanders of Vermont is not officially a Democrat, although he caucuses with them, chairs the Senate budget Committee, and sought the Democratic presidential nomination in 2016 and 2020. Senator Angus King of Maine is another “independent” who caucuses with the Democrats. Close enough for government work.)) Vice President Kamala Harris can vote to break a tie, giving the Democratic Party an effective 51-50 majority.((The Constitutional text providing for the vice president’s tie breaking vote does not provide for her casting vote by an affirmative provision, but by denying her a vote except in case of a tie. “The Vice President of the United States shall be President of the Senate, but shall have no Vote, unless they be equally divided.” Article I, section 3, clause 4.))

This majority is effective only so long as all 50 Democrats vote the party line. Again, anyone paying attention knows that West Virginia Senator Joe Manchin and Arizona Senator Kyrsten Sinema have refused to toe the party line on a number of votes.

It was recently announced that Senator Manchin had been negotiating with the Senate Majority Leader, Senator Charles Shumer of New York, on what is billed as an environmental (read spending) and tax package. With 50 votes (plus the vice president’s tiebreaker) the bill can be (assuming the Senate parliamentarian’s blessing) be passed through the “reconciliation” procedure.

However, that deal contains a tax provision reportedly opposed by Senator Sinema.

It also lacks a tax provision that could result on opposition in the House of Representatives and, more critically, the Senate — the repeal or significant modification of the limitation of the deduction for State and local taxes (sometimes called “SALT”) to $10,0000. As I noted in Some Weaknesses in NJ.com’s Arguments Against the SALT Deduction Limit, the Star-Ledger‘s website, NJ.com, has published quite a few “articles” criticizing that change and advocating for its repeal or evasion.((Many of these editorials masking as news articles have been written by NJ Advance Media’s Washington correspondent, Jonathan D. Salant.)) It seems that several members of New Jersey’s congressional delegation threatened to vote against President Biden’s “Build Back Better” legislation if it did not eliminate (or at least vastly increase) the SALT deduction limit.

Even if two or three House members vote against the “climate” bill, it would probably pass the House, but the Senate is another story. And at least one Democratic senator, New Jersey’s Robert Menendez, quoted as channeling Joe Manchin, has indicated he could be a “no” vote.

The Star Ledger Editorial Board opposes this posturing:

[U]sing the SALT issue to threaten the Build Back plan was wrong, using it to hold up the epic infrastructure bill was a reckless bluff, and using it to stop the Inflation Reduction Act would be political malpractice.
NJ lawmakers can help get Biden into the red zone | Editorial

While I profess no insight into what Senator Sinema will do, I would be shocked if Senator Menendez or New Jersey’s congressional delegation let SALT trump Biden’s environmental pepper.

Jay Bohn

August 1, 2022