The Biden administration defended an Obama-era immigration program for “Dreamers” at a federal appeals court Wednesday, in a case that threatens to strip protections from hundreds of thousands of young immigrants.

The Justice Department’s Brian M. Boynton told the U.S. Court of Appeals for the 5th Circuit that a 2012 memo that created the Deferred Action for Childhood Arrivals program, also known as DACA, “is lawful in its entirety and should be upheld.”

The appeals court is reviewing a decision last year from Judge Andrew Hanen of the U.S. District Court for the Southern District of Texas that struck down the program, in a ruling that found the Department of Homeland Security lacked the authority to implement it.

That lower court ruling allows the federal government to continue processing renewals for existing DACA recipients, but closed the door to first-time applicants.

DACA since 2012 has provided deportation protections and work permits to certain undocumented immigrants who were brought to the U.S. as children. The program currently shields more than 600,000 young people from deportation and allows them to work or study in the country, according to government data.

Wednesday’s hearing is part of litigation brought by Texas and eight other Republican-led states challenging the legality of DACA. The appeals court is expected to issue a decision in the coming months.

Boynton told the 5th Circuit that Texas and the other states behind the lawsuit didn’t have the right to bring a legal challenge to the program. He argued the alleged harms they outlined, including health care and education costs for the states, are merely speculative.

Judd E. Stone II, solicitor general for Texas, countered that the state estimates hundreds of millions of dollars in costs because of DACA, which he said are “plainly are constitutionally sufficient” to allow the states to challenge the program.

The panel, which included two judges appointed by former President Donald Trump and one appointed by former President George W. Bush, appeared more open to Stone’s argument.

While presenting his arguments, Stone was asked just one question, about why one of the state’s arguments wasn’t raised earlier. Boynton, however, faced questions from the judges on how states could ever show they were harmed by an immigration program like this, if the harms claimed here were too speculative.

The judges also noted similarities with the appeals court’s earlier decision striking down the Obama administration’s attempt to expand DACA to protect the parents of American citizens as well. In that 2015 ruling, a different panel for the 5th Circuit concluded the states could bring that lawsuit because it would be financially injured by having to issue driver’s licenses to beneficiaries of the expanded program.

In this case, the question of DACA’s legality likely ultimately will be decided at the Supreme Court.

The Biden administration is working to redo the DACA program by issuing the policy through formal rule-making, rather than via agency memo as the Obama administration did. On Tuesday, the administration sent a finalized version of this rule to the White House budget office for review.

Wednesday’s arguments at the 5th Circuit come more than two years after the U.S. Supreme Court thwarted the Trump administration’s efforts to end DACA.

In that June 2020 ruling, the justices concluded the administration had tried to rescind the program arbitrarily and without consideration for the thousands of immigrants who rely on it. But the high court stopped short of ruling on the program’s legality.

Despite the frequent legal battles over the program, Congress has remained gridlocked and unable to pass legislation to establish permanent protections for Dreamers, despite widespread support among Americans.

Senate Democrats attempted to include protections for Dreamers and other immigrant populations in the party’s social and climate spending bill last year, but the effort was dropped amid internal disputes and parliamentary issues.

A bipartisan group of senators have resumed immigration negotiations this year, but talks have focused on border security, and negotiators have said they are unlikely to put forth a compromise proposal this summer.