Court Puts Hold on Biden’s Race-Based Loan Forgiveness Program

(Wisconsin Institute for Law & Liberty) U.S. District Judge William Griesbach issued a temporary restraining order halting payments in a federal farmer loan forgiveness program that allocates benefits on the basis of racial categories.

The Wisconsin Institute for Law & Liberty (WILL) represents twelve farmers and ranchers from Wisconsin, Minnesota, South Dakota, Ohio, Missouri, Iowa, Arkansas, Oregon, and Kentucky. Each plaintiff would be eligible for the federal loan forgiveness program, but for their race.

WILL President and General Counsel, Rick Esenberg, said, “The Court recognized that the federal government’s plan to condition and allocate benefits on the basis of race raises grave constitutional concerns and threatens our clients with irreparable harm. The Biden administration is radically undermining bedrock principles of equality under the law. We look forward to continuing this litigation but urge the administration to change course now.”

In April 2021, WILL filed a lawsuit in federal court challenging the unconstitutional race discrimination in the American Rescue Plan Act’s provision to offer loan forgiveness based on racial categories.

The law provides billions of dollars of debt relief to “socially disadvantaged” farmers and ranchers. But the definition of “socially disadvantaged” includes explicit racial classifications: farmers and ranchers must be Black or African American, American Indian or Alaskan native, Hispanic or Latino, or Asian American or Pacific Islander.

Other farmers—white farmers, for example—are ineligible.

This is illegal and unconstitutional. The United States Constitution “forbids” discrimination by the federal government “against any citizen because of his race.”

For the federal government to distribute “benefits on the basis of individual racial classifications,” the government must prove that its discriminatory benefit is narrowly tailored and serves a compelling government interest.

In late May, the USDA announced that it would begin forgiving loans in June, and would do so quickly, so WILL moved for a preliminary injunction and an immediate, temporary restraining order until the Court could rule on the preliminary injunction. The Court granted a temporary restraining order, prohibiting USDA from forgiving any loans on the basis of race until the Court rules on the preliminary injunction.

USDA’s response on the preliminary injunction motion is due on June 18, and the Court could rule on it the following week.

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