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PostPosted: Sun Jul 16, 2006 3:25 pm 
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126 S.Ct. 699, 163 L.Ed.2d 557, 74 USLW 4037, 108 Soc.Sec.Rep.Serv. 1, 05 Cal. Daily Op. Serv. 10,271, 2005 Daily Journal D.A.R. 14,005, 19 Fla. L. Weekly Fed. S 23

Supreme Court of the United States
James LOCKHART, Petitioner,
v.
UNITED STATES et al.
No. 04-881.
Argued Nov. 2, 2005.
Decided Dec. 7, 2005.

Background: Social Security recipient challenged government's withholding of benefits in order to offset his debt on federally reinsured student loans. The United States District Court for the Western District of Washington, John C. Coughenour, Chief Judge, dismissed complaint and recipient appealed. The United States Court of Appeals for the Ninth Circuit, Noonan, Circuit Judge, 376 F.3d 1027, affirmed. Certiorari was granted.

Holding: The Supreme Court, Justice O'Connor, held that United States may offset Social Security benefits to collect student loan debt that has been outstanding for over 10 years; abrogating Lee v. Paige, 376 F.3d 1179.

Affirmed.

Justice Scalia concurred and filed opinion.


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PostPosted: Sun Jul 16, 2006 3:29 pm 
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United States may offset Social Security benefits to collect student loan debt that has been outstanding for over 10 years; abrogating Lee v. Paige, 376 F.3d 1179. Higher Education Act of 1965, § 484A(a)(2)(D), 20 U.S.C.A. § 1091a(a)(2)(D); 31 U.S.C.A. § 3716(c)(3)(A)(i), (e)(1); Social Security Act, § 207, 42 U.S.C.A. § 407.

In 2002, the Government began withholding a portion of petitioner's Social Security payments to offset his debt on federally reinsured student loans that were more than 10 years overdue. Petitioner sued, arguing that the offset was barred by the 10-year statute of limitations of the Debt Collection Act of 1982, 31 U.S.C. § 3716(e)(1). The Social Security Act generally exempts benefits from attachment or other legal process, 42 U.S.C. § 407(a), and provides that "[n]o other provision of law ... may be construed to ... modify ... this section except to the extent that it does so by express reference," § 407(b). The Higher Education Technical Amendments of 1991 eliminated time limitations on suits to collect student loans, 20 U.S.C. § 1091a(a)(2)(D). In 1996, the Debt Collection Improvement Act subjected Social Security benefits to offset, "[n]otwithstanding [§ 407]," 31 U.S.C. § 3716(c)(3)(A)(i). The District Court dismissed petitioner's complaint, and the Ninth Circuit affirmed.
Held: The United States may offset Social Security benefits to collect a student loan debt that has been outstanding for over 10 years. Pp. 701-702.
(a) The Debt Collection Improvement Act makes Social Security benefits subject to offset, providing the sort of express *700 reference that § 407(b) says is necessary to supersede the anti-attachment provision. P. 701.
(b) The Higher Education Technical Amendments remove the 10-year limit that would otherwise bar offsetting petitioner's Social Security benefits to pay off his student loan debt. Debt collection by Social Security offset was not authorized until five years after this abrogation of time limits, but the plain meaning of the Higher Education Technical Amendments must be given effect even though Congress may not have foreseen all of its consequences, Union Bank v. Wolas, 502 U.S. 151, 158, 112 S.Ct. 527, 116 L.Ed.2d 514. Though the Higher Education Technical Amendments, unlike the Debt Collection Improvement Act, do not explicitly mention § 407, an express reference is only required to authorize attachment in the first place. Pp. 701-702.
(c) Though the Debt Collection Improvement Act retained the Debt Collection Act's general 10-year bar on offset authority, the Higher Education Technical Amendments retain their effect as a limited exception to the Debt Collection Act time bar in the student loan context. The Court declines to read any meaning into a failed 2004 congressional effort to amend the latter Act to explicitly authorize offset of debts over 10 years old. See, e.g., United States v. Craft, 535 U.S. 274, 287, 122 S.Ct. 1414, 152 L.Ed.2d 437. P. 702.

Justice O'CONNOR delivered the opinion of the Court.
[1] We consider whether the United States may offset Social Security benefits to collect a student loan debt that has been outstanding for over 10 years.

I
A
Petitioner James Lockhart failed to repay federally reinsured student loans that he had incurred between 1984 and 1989 under the Guaranteed Student Loan Program. These loans were eventually reassigned to the Department of Education, which certified the debt to the Department of the Treasury through the Treasury Offset Program. In 2002, the Government began withholding a portion of petitioner's Social Security payments to offset his *701 debt, some of which was more than 10 years delinquent.
Petitioner sued in Federal District Court, alleging that under the Debt Collection Act's 10-year statute of limitations, the offset was time barred. The District Court dismissed the complaint, and the Court of Appeals for the Ninth Circuit affirmed. 376 F.3d 1027 (2004). We granted certiorari, 544 U.S. ----, 125 S.Ct. 1928, 161 L.Ed.2d 772 (2005), to resolve the conflict between the Ninth Circuit and the Eighth Circuit, see Lee v. Paige, 376 F.3d 1179 (C.A.8 2004), and now affirm.

B
The Debt Collection Act of 1982, as amended, provides that, after pursuing the debt collection channels set out in 31 U.S.C. § 3711(a), an agency head can collect an outstanding debt "by administrative offset." § 3716(a). The availability of offsets against Social Security benefits is limited, as the Social Security Act, 49 Stat. 620, as amended, makes Social Security benefits, in general, not "subject to execution, levy, attachment, garnishment, or other legal process." 42 U.S.C. § 407(a). The Social Security Act purports to protect this anti-attachment rule with an express-reference provision: "No other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section." § 407(b).
Moreover, the Debt Collection Act's offset provisions generally do not authorize the collection of claims which, like petitioner's debts at issue here, are over 10 years old. 31 U.S.C. § 3716(e)(1). In 1991, however, the Higher Education Technical Amendments, 105 Stat. 123, sweepingly eliminated time limitations as to certain loans: "Notwithstanding any other provision of statute ... no limitation shall terminate the period within which suit may be filed, a judgment may be enforced, or an offset, garnishment, or other action initiated or taken," 20 U.S.C. § 1091a(a)(2), for the repayment of various student loans, including the loans at issue here, § 1091a(a)(2)(D).
The Higher Education Technical Amendments, by their terms, did not make Social Security benefits subject to offset; these were still protected by the Social Security Act's anti-attachment rule. Only in 1996 did the Debt Collection Improvement Act--in amending and recodifying the Debt Collection Act--provide that, "[n]otwithstanding any other provision of law (including [§ 407] ...)," with a limited exception not relevant here, "all payment due an individual under ... the Social Security Act ... shall be subject to offset under this section." 31 U.S.C. § 3716(c)(3)(A)(i).

II
The Government does not contend that the "notwithstanding" clauses in both the Higher Education Technical Amendments and the Debt Collection Improvement Act trump the Social Security Act's express-reference provision. Cf. Marcello v. Bonds, 349 U.S. 302, 310, 75 S.Ct. 757, 99 L.Ed. 1107 (1955) ("Exemptions from the terms of the ... Act are not lightly to be presumed in view of the statement ... that modifications must be express [.] But ... [u]nless we are to require the Congress to employ magical passwords in order to effectuate an exemption from the ... Act, we must hold that the present statute expressly supersedes the ... provisions of that Act" (citation omitted)); Great Northern R. Co. v. United States, 208 U.S. 452, 465, 28 S.Ct. 313, 52 L.Ed. 567 (1908).
*702 We need not decide the effect of express-reference provisions such as § 407(b) to resolve this case. Because the Debt Collection Improvement Act clearly makes Social Security benefits subject to offset, it provides exactly the sort of express reference that the Social Security Act says is necessary to supersede the anti-attachment provision.
[2] It is clear that the Higher Education Technical Amendments remove the 10-year limit that would otherwise bar offsetting petitioner's Social Security benefits to pay off his student loan debt. Petitioner argues that Congress could not have intended in 1991 to repeal the Debt Collection Act's statute of limitations as to offsets against Social Security benefits--since debt collection by Social Security offset was not authorized until five years later. Therefore, petitioner continues, the Higher Education Technical Amendments' abrogation of time limits in 1991 only applies to then-valid means of debt collection. We disagree. "The fact that Congress may not have foreseen all of the consequences of a statutory enactment is not a sufficient reason for refusing to give effect to its plain meaning." Union Bank v. Wolas, 502 U.S. 151, 158, 112 S.Ct. 527, 116 L.Ed.2d 514 (1991).
Petitioner points out that the Higher Education Technical Amendments, unlike the Debt Collection Improvement Act, do not explicitly mention § 407. But § 407(b) only requires an express reference to authorize attachment in the first place--which the Debt Collection Improvement Act has already provided.

III
Nor does the Debt Collection Improvement Act's 1996 recodification of the Debt Collection Act help petitioner. The Debt Collection Improvement Act, in addition to adding offset authority against Social Security benefits, retained the Debt Collection Act's general 10-year bar on offset authority. But the mere retention of this previously enacted time bar does not make the time bar apply in all contexts--a result that would extend far beyond Social Security benefits, since it would imply that the Higher Education Technical Amendments' abrogation of time limits was now a dead letter as to any kind of administrative offset. Rather, the Higher Education Technical Amendments retain their effect as a limited exception to the Debt Collection Act time bar in the student loan context.
[3] Finally, we decline to read any meaning into the failed 2004 effort to amend the Debt Collection Act to explicitly authorize offset of debts over 10 years old. See H.R. 5025, 108th Cong., 2d Sess., § 642 (Sept. 8, 2004); S. 2806, 108th Cong., 2d Sess., § 642 (Sept. 15, 2004). "[F]ailed legislative proposals are 'a particularly dangerous ground on which to rest an interpretation of a prior statute.' " United States v. Craft, 535 U.S. 274, 287, 122 S.Ct. 1414, 152 L.Ed.2d 437 (2002) (quoting Pension Benefit Guaranty Corporation v. LTV Corp., 496 U.S. 633, 650, 110 S.Ct. 2668, 110 L.Ed.2d 579 (1990)). In any event, it is unclear what meaning we could read into this effort even if we were inclined to do so, as the failed amendment-- which was not limited to offsets against Social Security benefits--would have had a different effect than the interpretation we advance today.
Therefore, we affirm the judgment of the Ninth Circuit.
It is so ordered.

Lockhart v. U.S.
126 S.Ct. 699
U.S.,2005.
Dec 07, 2005


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PostPosted: Sun Jul 16, 2006 3:47 pm 
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Exerpt
Guillermety v. Secretary of Educ. of U.S.
241 F.Supp.2d 727
E.D.Mich.,2002.
Sep 27, 2002
==========
2. 20 U.S.C. § 1091a Does Not Eliminate the Statute of Limitations Contained in 31 U.S.C. § 3716(e)(1) With Respect to the Administrative Offset of Social Security Benefits
The Government does not dispute that Plaintiff Edgmon's Perkins loan was assigned to the Department of Education in 1990. As such, the Treasury's offset of Edgmon's Social Security benefits in September, 1991, clearly was more than ten years from the date the loan became a claim of the United States. Consequently, the Court must now analyze Plaintiffs' complaint to determine whether there is a strong likelihood that Plaintiff Edgmon will succeed on the merits.
Plaintiffs' complaint presents an issue of first impression--the Court must decide whether the Secretary of Treasury may offset a recipient's Social Security benefits in order to collect student loans owed to the United States for more than 10 years. In doing so, the Court must reconcile an apparent conflict between three statutes: (1) 42 U.S.C. § 407; (2) 31 U.S.C. § 3716; and (3) 20 U.S.C. § 1091a.
*750 42 U.S.C. § 407 provides a general prohibition against the attachment of Social Security benefits. Subsection (a) declares:
The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the monies paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
42 U.S.C. § 407(a). Subsection (b) goes on to restrict Congress' power to limit or modify this prohibition, requiring "express reference" to section 407. Specifically, subsection (b) states: "No other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supercede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section." 42 U.S.C. § 407(b).
Section 407 has, in fact, been expressly limited by Congress. In 1996, Congress amended 31 U.S.C. § 3716, the non-tax administrative offset provision for claims of the United States Government, expressly permitting the offset of Social Security benefits. The amendment states, in relevant part:
Notwithstanding any other provision of law (including sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1))), ... all payments due to an individual under--
(I) the Social Security Act,
(II) part B of the Black Lung Benefits Act, or
(III) any law administered by the Railroad Retirement Board (other than payments that such Board determines to be tier 2 benefits)
shall be subject to offset under this section.
31 U.S.C. § 3716(c)(A)(i). Congress, however, retained the section's statute of limitation, which prohibits the offset of claims outstanding for more than ten years. 31 U.S.C. § 3716(e)(1) ("This section does not apply-- (1) to a claim under this subchapter that has been outstanding for more than 10 years.") (previously codified at 31 U.S.C. § 3716(c)(1)).
The Government contends, however, that this provision was implicitly overridden, with respect to student loans, by Congress' earlier 1991 amendment to the Higher Education Act ("HEA"), 20 U.S.C. § 1091a, which eliminated all statutes of limitation with respect to student loan collections. Section 1091a states, in relevant part:
(1) It is the purpose of this subsection to ensure that obligations to repay loans and grant overpayments are enforced without regard to any Federal or State statutory, regulatory, or administrative limitation on the period within which debts may be enforced.
(2) Notwithstanding any other provision of statute, regulation, or administrative limitation, no limitation shall terminate the period within which suit may be filed, a judgment may be enforced, or an offset, garnishment, or other action initiated or taken by--
(D) the Secretary, the Attorney General, or the administrative head of another Federal Agency as the case may be, ... for the repayment of the amount due from a borrower on a loan made under this subchapter and part C of subchapter I of chapter 34 of Title 42 that has been assigned to the Secretary under this subchapter and part C of subchapter I of chapter 34 of title 42.
*751 20 U.S.C. §§ 1091a(a)(1), 1091a(a)(2)(D). The Government argues that express reference to 42 U.S.C. § 407 was not necessary because the HEA did not limit or modify the Social Security Act's anti-alienation provision. Instead, the Government contends that the HEA merely overrode the ten year limitation found in 31 U.S.C. § 3716(e)(1) (formerly codified at section 3716(c)(1)), thereby extending the Treasury's authority to offset Social Security benefits in order to collect student loans outstanding for more than 10 years. The Court, however, based on the record currently before it, disagrees.
First, the statutory language of, and the legislative intent behind, the Social Security anti-alienation provision, 42 U.S.C. § 407, militates against the Government's interpretation. Section 407(a) imposes a "broad bar against the use of any legal process to reach all social security benefits." Philpott v. s* County Welfare Bd., 409 U.S. 413, 417, 93 S.Ct. 590, 34 L.Ed.2d 608 (1973). Although, as noted by the Sixth Circuit, the committee reports discussing Title II of the Social Security Act of 1935 did not mention the anti-assignment provision, the reports do reaffirm the purpose of Title II, which was "to provide a minimum level of security against the economic uncertainties of old age." In re Buren, 725 F.2d 1080, 1084 (6th Cir.1984) (citing H.R.Rep. No. 615, 74th Cong., 1st Sess (1935); S.Rep. No. 628, 74th Cong., 1st Sess. (1935)). Congress' desire, implicit in the text of section 407(a), to protect social security recipients, who depend on their benefits to meet their most basic needs, is supported by the legislative history behind 42 U.S.C. § 1383(d)(1), [FN23] which incorporated section 407 to prohibit the attachment of Supplemental Social Security Income (SSI) for the aged, blind and disabled. The committee report explained:


FN23. 42 U.S.C. § 1383(d)(1) states: "The provisions of section 407 of this title ... shall apply with respect to this part to
the same extent as they apply in the case of subchapter II of this chapter."


Your committee wishes to emphasize its strong belief that if the benefits which would be provided under this program are to meet the most basic needs of the poor, the benefits must be protected from seizure in legal processes against the beneficiary. Therefore, any amounts paid or payable under this program would not be subject to levy, garnishment, or other legal process, except the collection of delinquent Federal taxes. Also, entitlement to these benefits would not be transferable or assignable.
In re Buren, 725 F.2d at 1084 (quoting H.R.Rep. No. 92-231, 92d Cong., 1st Sess. 156 (1971), reprinted in [1972] U.S.C.C.A.N. 4989, 5142). These provisions illustrate a "strong Congressional opposition to the diversion of social security funds." Id.
Congress' intention to protect Social Security benefits from attachment was reinforced by the 1983 amendment to section 407, which added subsection (b): "No other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supercede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section." 42 U.S.C. § 407(b) (emphasis added). This amendment enhanced congressional protection of Social Security benefits by prohibiting modification or limitation of section 407's broad bar to only those instances in which Congress explicitly referenced the anti-alienation provision.
The amendment ensured, therefore, that any modification of the broad protections afforded Social Security benefits in *752 section 407 could only be accomplished after Congress specifically considered the effect a change would have on social security recipients, given congressional recognition that the benefits are necessary, in many instances, to meet the basic needs of the poor. Requiring "express reference" to section 407 ensured that Social Security benefits could not be unintentionally limited or modified by past or future legislation. Instead, recognizing the potential harm that may result from the attachment of Social Security benefits, section 407(b) ensured that Congress would specifically identify its intent with "express reference" to the anti-assignment statute, providing both the Government and the social security recipient with notice that benefits may be attached and the specific scope of the permissible attachment.
This interpretation is supported by the legislative history behind the 1983 amendment to section 407. Subsection (b) was enacted in response to numerous bankruptcy court decisions which permitted the attachment of Social Security benefits by a bankruptcy trustee, based on the supposed repeal by implication of section 407 by the Bankruptcy Reform Act of 1978. The House Conference Report noted:
Present Law
Since 1935, the Social Security Act has prohibited the transfer or assignment of any future social security or SSI benefits payable and further states that no money payable or rights existing under the Act shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
Based on the legislative history of the Bankruptcy Reform Act of 1978, some bankruptcy courts have considered social security and SSI benefits listed by the debtor to be income for purposes of a Chapter XIII bankruptcy and have ordered SSA in several hundred cases to send all or part of a debtor's benefit check to the trustee in bankruptcy.
House Bill
Specifically provides that social security and SSI benefits may not be assigned notwithstanding any other provisions of law, including P.L. 95-598, the "Bankruptcy Reform Act of 1978". Effective on enactment.
Pub.L. No. 98-21, § 335(a), reprinted in 1983 U.S.C.C.A.N. 443; In re Buren, 725, F.2d 1080, 1087 (6th Cir.1984). Thus, Congress rejected repeal of section 407 by implication, restricting the scope of any limitation or modification of the broad bar contained in section 407(a) to those instances in which Congress explicitly indicated its intent to permit attachment.
The Government's interpretation--that the 1991 amendment to section 1091a implicitly eliminated the statute of limitation contained in 31 U.S.C. § 3716(e)(1) with respect to student loan collections, when Congress amended, in 1996, section 3716 permitting the limited administrative offset of Social Security benefits--is the type of unintentional expansion of an express modification which Congress attempted to eliminate when enacting 42 U.S.C. § 407(b). According to the Government's theory, once Congress expressly permits the attachment of Social Security benefits in a particular context, no matter how broad or how limited the abrogation may be, any legislation, past or future, which indirectly alters Congress' explicit limitation, should be given affect because it need not "expressly reference" section 407. Thus, according to the Government, if Congress focused its attention on section 407, and enacted a statute which provided for a narrow exception to section 407's broad bar, past or future legislation could *753 broaden Congress' express intention, even though expanding the government's ability to attach Social Security benefits was not contemplated or intended when the earlier or subsequent legislation was enacted/amended. This interpretation cannot be reconciled with the text of, and legislative intent behind, subsections (a) and (b) of 42 U.S.C. § 407.
Section 407(b) confines congressional limitation of section 407(a) to the specific scope contemplated by Congress when enacting the modification. Otherwise, broad and sweeping legislation, such as the Bankruptcy Reform Act of 1978, or, in this case, the broad elimination of the statute of limitations with respect to student loan collections contained in the Higher Education Act, could greatly alter the specific limitation intended by Congress, without any reference or consideration to the effect that the change would have on social security recipients, many of whom depend on their benefits to survive. This is particularly relevant in this case: when Congress amended section 1091a in 1991, the government was precluded from administratively offsetting Social Security benefits to collect claims of the United States in all circumstances. Clearly then, when Congress eliminated all statutes of limitation with respect to student loan collections in 1991, it could not have contemplated or intended that this sweeping legislation would permit the government to offset Social Security benefits in the future. Moreover, there is simply no reference in the legislative history behind the 1996 amendment to the Debt Collection Act which would indicate that Congress contemplated, when it retained the 10 year statute of limitation in subsection (e)(1) (formerly codified at section (c)(1)), that it was aware that this would be implicitly overridden, with respect to student loans, by sweeping legislation contained in the Higher Education Act, enacted approximately 5 years earlier.
This interpretation is supported by a long-standing canon of statutory construction: "Where there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of enactment." Morton v. Mancari, 417 U.S. 535, 550-51, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974); see also United States v. Romani, 523 U.S. 517, 530-31, 118 S.Ct. 1478, 140 L.Ed.2d 710 (1998); Radzanower v. Touche Ross & Co., 426 U.S. 148, 153, 96 S.Ct. 1989, 48 L.Ed.2d 540 (1976); United States v. Ware, 161 F.3d 414, 423 (6th Cir.1998) ("There is an additional canon of statutory construction which dictates that the specific statute controls over the more general provision."). The Supreme Court has explained:
The "classic judicial task of reconciling many laws enacted over time, and getting them to 'make sense' in combination, necessarily assumes that the implications of a statute may be altered by the implications of a later statute." This is particularly so where the scope of the earlier statute is broad but the subsequent statutes more specifically addresses the topic at hand. As we recognized recently in United States v. Estate of Romani, "a specific policy embodied in a later federal statute should control our construction of the [earlier] statute, even though it ha[s] not been expressly amended."
Food and Drug Administration v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 143, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (citations omitted). The rationale for this principle is clear: a more specific statute, enacted after a more general one, represents Congress' detailed judgment on the subject, reflecting Congress' specific *754 intent when "the mind of the legislature [was] turned to the details of the subject." Radzanower, 426 U.S. at 153, 96 S.Ct. 1989; Romani, 523 U.S. at 532, 118 S.Ct. 1478.
The 1991 amendment to the Higher Education Act, 20 U.S.C. § 1091a, completely eliminated, in broad and general terms, all statutes of limitation with respect to the collection of student loans. The amendment broadly stated: "It is the purpose of this subsection to ensure that obligations to repay loans and grant overpayments are enforced without regard to any Federal or State statutory, regulatory, or administrative limitation on the period within which debts may be enforced." 20 U.S.C. § 1091a(a)(1). This included actions by the Secretary for "repayment of the amount due from a borrower on a loan made under this subchapter." 20 U.S.C. § 1091a(a)(2)(D).
Congress, at this time, had yet to limit or modify section 407 with respect to the attachment of Social Security benefits. Thus, this legislation was not only sweeping in character, but, at the time it was enacted, Congress could not have contemplated that the elimination of all statutes of limitation with respect to the collection of student loans would have any impact on the government's ability to administratively offset Social Security benefits. Simply stated, when the amendment was passed, it was impossible for the government, both before and after the amendment, to offset a recipient's Social Security benefits to collect student loan obligations.
Furthermore, the legislative history surrounding the 1991 amendment to the HEA reveals that Congress was focused on eliminating a narrow problem that had recently emerged--the ability of the government to offset federal income tax refunds to collect defaulted student loans pursuant to 31 U.S.C. § 3720A. As noted by Representative Ford of Michigan, the amendment:
overcomes a recent circuit court decision [FN24] that puts in jeopardy the ability of the Department of Education to collect defaulted student loans through offsets of income tax refunds and other means. In particular, the bill would eliminate the statute of limitations with respect to the recovery of defaulted student loans though offsets of Federal income tax refunds, litigation, and garnishment, where otherwise permitted by Federal law. This provision would ensure with respect to just defaulted national direct student loans that $180 million already collected through tax refund offsets would not have to be returned to defaulters, and that an additional $64.2 million per year can be collected by the Department. Substantial additional collections of defaulted guaranteed student loans are also safeguarded by this provision.


FN24. Grider v. Cavazos, 911 F.2d 1158 (5th Cir.1990).


137 Cong.Rec. H1808, H1810 (Mar. 19, 1991) (statement of Rep. Ford); see id. at H1812 (statement of Rep. Barrett) ("Second, I'm proud to see that we are restoring the highly successful tax offset mechanism to collect on defaulted student loans.").
Thus, two critical points emerge from this analysis: (1) while the 1991 amendment to the HEA, 20 U.S.C. § 1091a, was broad and general in its textual language, it was narrowly focused on a particular problem-the ability of the federal government to collect delinquent student loans through the offset of federal tax refunds; [FN25] *755 and (2) Congress, at the time of the amendment, did not, and could not anticipate that this would have any effect on the statute of limitations with respect to the offset of Social Security benefits-the administrative offset of Social Security benefits was strictly prohibited by 42 U.S.C. § 407(a).


FN25. At oral argument, counsel for the Government analogized to the similarities in language between section 3716 and section 3720A, which permits the administrative offset of federal tax refunds (for example, both refer generally, at times, to past-due, legally enforceable debt), and Congress' clear intent to eliminate the ten year statute of limitation with respect to the offset of federal tax refunds. However, critical differences exist between the offset of federal tax refunds, and the offset of Social Security benefits. Social Security benefits, unlike one-time federal tax refunds, are designed to provide recipients with funds
to meet their most basic needs--e.g., food, shelter, medicine. More importantly, recognizing the unique nature of these benefits, Congress has tied its own hands with regard to the attachment of Social Security benefits, explicitly precluding the attachment of social security benefits to only those instances in which Congress has explicitly modified or limited 42 U.S.C. § 407. Congressional willingness to allow for the indefinite administrative offset of federal tax refunds cannot be translated into an equal willingness to allow for the indefinite administrative offset of social security benefits, given Congress' longstanding protection of Social Security benefits in 42 U.S.C. § 407, and its continued recognition that Social Security benefits represent a preferred asset, utilized by individuals who are dependent upon them for all or a substantial portion of their income.


In 1996, however, Congress focused its attention, for the first time, squarely on the issue of the extent to which the government could offset social security funds under the Debt Collection Act, 31 U.S.C. § 3716. As noted supra, the 1996 amendment to section 3716 expressly limited 42 U.S.C. § 407(a), stating in relevant part:
Notwithstanding any other provision of law (including sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1))), ... all payments due to an individual under--
(I) the Social Security Act,
(II) part B of the Black Lung Benefits Act, or
(III) any law administered by the Railroad Retirement Board (other than payments that such Board determines to be tier 2 benefits)
shall be subject to offset under this section.
31 U.S.C. § 3716(c)(A)(i). However, Congress made a specific policy decision to retain the section's statute of limitation, which prohibited the offset of claims outstanding for more than ten years. 31 U.S.C. § 3716(e)(1) (formerly codified at subsection (c)(1)); see also 31 C.F.R. § 285.4(c) ("Covered benefit payments, i.e., payments made to individuals under the Social Security Act ... are among the type of payments which may be offset to collect debts owed to the United States. Offset of covered benefit payments are subject to the limitations contained in this section.").
This amendment was carefully considered by Congress. In fact, it appears that Congress was aware that the amendment would allow the Treasury to administratively offset Social Security benefits to collect, among other claims, delinquent student loans. A letter entered into the Congressional Record, prepared by the Congressional Budget Office, included the following discussion:
Changes in Direct Spending. The seven-year totals in estimated savings in direct spending include about $ 475 million for new and enhanced offset authorities, including the authority to offset a portion of Social Security Administration ... payments for recipients who are delinquent on a debt owed to the federal government and who are scheduled to *756 receive more than $10,000 in federal benefit payments over a 12-month period. For example, assume an individual currently is delinquent on a education loan and is also expected to receive $ 12,000 in Social Security and other federal payments over the next 12 months. Under the proposed language, Treasury could offset as much as $ 166 of each monthly Social Security payment and transfer this money to Education in partial satisfaction of the recipient's delinquent loan.
142 Cong. Rec. S1816, 1825 (Mar. 12, 1996). No mention, however, is made in the amendment's entire legislative history which would indicate that Congress was aware that, even though it was expressly retaining the 10 year statute of limitations previously contained in subsection(c)(1), the amendment would allow the government to offset Social Security benefits to collect outstanding student loans for an indefinite time period after they became claims of the United States.
Instead, the legislative history militates otherwise--Congress was keenly aware of the potential harm that social security recipients might face if their benefits were offset by the government. The House Conference Report stated, in relevant part:
The conferees strongly support repayment of delinquent government debt by all those who can afford to do so. However, the conferees recognize that those who receive federal benefits, particularly Social Security benefits, may be dependent upon them for a substantial part of their income. In order to avoid unreasonable hardship, the conferees insist that any federal debt collection effort give full consideration to the financial situation of the individual who may repay the debt.
By definition, recipients of Social Security benefits are elderly or totally disabled workers and their dependents, or the surviving dependents of deceased workers. The conferees intend that in cases where such benefits are involved, it is particularly important for the Treasury Department as well as all other Executive Branch organizations involved in developing regulations to implement this provision, to create regulatory safeguards which separate those debtors who cannot repay from those who refuse to repay. In particular, those who have become delinquent because of personal hardship, such as debilitating disability, or death of the breadwinner, and who may therefore be unable, rather than unwilling, to repay, must be protected if administrative offset of those benefits would cause undue financial hardship. Such safeguards are critical when benefits such as Social Security are the sole or major source of income for the debtor.
The conferees want to ensure that the Department of the Treasury regulations governing new debt collection procedures will be cautiously and thoughtfully implemented, providing full safeguards for beneficiaries. Recognizing the dependence of those receiving federal benefits on those benefits, the conferees direct that the Treasury Department limit automatic withholdings of benefits above the $9,000 annual exemption to a reasonable percentage of those benefits, not to exceed 15 percent. Of course, debtors wishing to repay more would be free to do so by remittance or other voluntary means.
H.R. Conf. Rep. No. 104-537, 104th Cong., 2d Sess., 142 Cong. Rec. H3842, H4042-43 (Apr. 25, 1996).
Thus, even though Congress was willing to permit government offset of social security *757 benefits, it expressed reservation in doing so, wisely recognizing the potential harm that might result to recipients who depended on these payments. Congress dictated that regulations should be "cautiously and thoughtfully implemented," given the critical nature of the benefits. Moreover, it expressly retained the ten year statute of limitations previously codified at 31 U.S.C. § 3716(c)(1), preventing the offset of Social Security and other benefits for claims which had been long outstanding. The unbridled ability to offset social security benefits was not intended by Congress. [FN26]


FN26. In fact, the Treasury regulations dealing with the special rules applicable to the offset of Social Security benefits counsels otherwise. The regulations state:


Covered benefit payments, i.e., payments made to individuals under the Social Security Act (other than Supplemental Security Income (SSI) payments, part B of the Black Lung Benefits Act, or any law administered by the Railroad Retirement Board (RRB) (other than tier 2 benefits) are among the type of payments which may be offset to collect debts owed to the United States). Offset of covered benefit payments are subject to the limitations contained in this section.


31 C.F.R. § 285.4(c) (emphasis added). No mention is made of 20 U.S.C. § 1091a, or any other sweeping statutory exception to this limitation.


It is clear, therefore, that the mind of the legislature was squarely fixed on the scope of the government's ability to offset Social Security benefits when it amended 31 U.S.C. § 3716 in 1996. This was the first time Congress specifically addressed the issue in specific detail, balancing the important governmental goal of collecting delinquent government debt with the tremendous harm that might result from the reduction of Social Security benefits which recipients depend upon to meet their most basic needs. In doing so, Congress authorized the offset of Social Security benefits while, at the same time, cautioning that regulations must be cautiously implemented and specifically retaining the ten year statute of limitations.
Therefore, as noted supra, the long-standing canon of statutory construction-- "Where there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of enactment"--militates in favor of the Plaintiffs' statutory interpretation. The 1996 amendment represented Congress' detailed judgment in the area of the Government's ability to offset Social Security benefits, enacted when the mind of the legislature was clearly turned to the subject. The earlier 1991 amendment to 20 U.S.C. § 1091a should not nullify Congress' later detailed amendment on the subject. Section 1091a is a general statute, enacted five years earlier, in a different statutory scheme--the Higher Education Act. It broadly eliminated all statute of limitations with respect to student loan collections. However, at the time it was enacted, Congress could not have anticipated that it would have any effect on the offset of Social Security benefits--it was strictly prohibited at that time by 42 U.S.C. § 407.
Applying this longstanding rule of statutory construction, the Court, based on the record currently before it, concludes that the broad and general provision of section 1091a cannot implicitly override the specific and detailed provisions contained in section 3716, where Congress was clearly focused on the extent to which the government could offset Social Security benefits to collect claims of the United States, including claims for defaulted student loans. This conclusion is supported, as noted supra, by the statutory language and legislative intent behind the Social *758 Security anti-attachment provision, which attempted to eliminate the type of unintentional expansion of an express congressional limitation of 42 U.S.C. § 407 that the Defendants seek in this case.
Therefore, based on the record currently before the Court, the Court finds that Plaintiff Edgmon has shown a strong likelihood of success on the merits. Edgmon's loan was assigned to the Department of Education in March, 1990, more than ten years before the offsets began. As such, the government was prohibited from offsetting Edgmon's Social Security benefits pursuant to 31 U.S.C. § 3716(e)(1).
D. Irreparable Harm to Plaintiff Edgmon Outweighs Harm to Government
The Government argues that Plaintiff Edgmon will not suffer irreparable harm because his annual income, although only slightly above the poverty level, will not fall below the $9,000 minimum level set forth by Congress in 31 U.S.C. § 3716(c)(3)(A)(ii). The Government also argues that "it is well settled that 'the temporary loss of income, ultimately to be recovered, does not usually constitute irreparable injury,' " citing Sampson v. Murray, 415 U.S. 61, 94 S.Ct. 937, 39 L.Ed.2d 166 (1974).
As an initial matter, Sampson does not stand for the proposition that a temporary loss of income is never sufficient to establish irreparable injury. Instead, Sampson held that a loss of income "usually" does not constitute irreparable injury. The Court noted:
"The key word in this consideration is irreparable. Mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay, are not enough. The possibility that adequate compensatory or other corrective relief will be available at a later date, in ordinary course of litigation, weighs heavily against a claim of irreparable harm."
Id. at 90, 94 S.Ct. 937 (quoting Virginia Petroleum Jobbers Ass'n v. FPC, 259 F.2d 921 (D.C.Cir.1958)) (emphasis in original). In fact, several courts have found that a reduction in benefits which were necessary to purchase a recipient's basic necessities was sufficient to establish irreparable harm. Chu Drua Cha v. Noot, 696 F.2d 594, 599 (8th Cir.1982) ("For people at the economic margin of existence, the loss of $172 a month and perhaps some medical care cannot be made up by the later entry of a money judgment."); see also In re Orthopedic Bone Screw Products Liability Litigation, 202 F.R.D. 154, 161-62 (E.D.Pa.2001); Brown v. Giuliani, 158 F.R.D. 251, 264-65 (E.D.N.Y.1994).
This case does not present the usual situation. Plaintiff Edgmon, a sixty-five year-old man confined to a wheelchair, depends on fixed Social Security benefits as his sole source of income. His annual pre-offset benefits of approximately $10,200 per year ($849 per month) is barely sufficient to enable Plaintiff to purchase his basic necessities--food, electricity, propane for heat, insurance, taxes, and clothing. (Edgmon Affidavit ¶ 6, 8.) In fact, Plaintiff has been forced to rely on whatever is left over after paying his monthly expenses to purchase groceries. (Id.)
The government's offset of $99 per month, reduces Mr. Edgmon's annual Social Security benefits by 12%, to exactly $9,000 annually, which is only slightly above the poverty level. A $99 monthly reduction may not be significant to the Government, or for that matter, to a large segment of the American population-- however, a 12% reduction in Mr. Edgmon's monthly benefits could be detrimental to his basic survival. The Court cannot accept *759 the Government's contention that irreparable harm cannot exist because Mr. Edgmon receives the $9,000 minimum enumerated in section 3716. Mr. Edgmon's fulls benefits are barely sufficient to meet his most basic needs, any further reduction in his benefits would most likely result in irreparable harm to Mr. Edgmon.
Furthermore, contrary to the Government's contention that the weighing of harm between one plaintiff and the government is "lopsided," the Court finds that the harm to Mr. Edgmon is not outweighed by the harm to the United States. Mr. Edgmon faces the loss of income necessary to meet his most basic needs. The Government, on the contrary, will merely suffer the temporary loss of an offset for a few months--oral argument for Plaintiffs' motion for summary judgment is scheduled for May 7, 2002. This loss will have no meaningful effect on the Treasury. Moreover, interest will continue to accrue on Mr. Edgmon's outstanding loan during this brief time period. [FN27]


FN27. The public interest does not favor either party. Certainly, there is a strong public interest in government's collection of delinquent debt, including defaulted student loans. However, as expressed by 42 U.S.C. § 407, there is an equally strong public interest in protecting Social Security benefits from unauthorized attachment.


Consequently, the Court concludes that a preliminary injunction is warranted with respect to Plaintiff Edgmon. He has demonstrated a strong likelihood of success as well as irreparable harm. Accordingly, the Court GRANTS Plaintiff Edgmon's motion for a preliminary injunction. Accordingly, until further Order of the Court, the Secretary of Treasury of the United States is hereby RESTRAINED and ENJOINED from undertaking any administrative offset of Plaintiff Glenn D. Edgmon's Social Security benefits to collect his outstanding Federal Perkins Loan.
====
Guillermety v. Secretary of Educ. of U.S.
241 F.Supp.2d 727
E.D.Mich.,2002.
Sep 27, 2002


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