By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court will hear a case on Monday that tests the boundaries of presidential powers, confronting the question of whether President Barack Obama exceeded his authority with unilateral action to spare millions of people in the country illegally from deportation.

The case, one of the most consequential of the court's current term that ends in June, pits Obama against 26 states led by Texas that filed suit to block his 2014 immigration plan.

The high court is evenly divided with four liberal justices and four conservatives following the February death of conservative Antonin Scalia. That raises the possibility of a 4-4 split that would leave in place a 2015 lower-court ruling that threw out the president's executive action that bypassed the Republican-led Congress.

The arguments in the case come at a time when immigration is a divisive issue in the U.S. presidential campaign, with top Republican contenders advocating deporting all of the estimated 11 million people in the country illegally.

Obama took the action after Republicans in the House of Representatives killed bipartisan legislation, billed as the biggest overhaul of U.S. immigration laws in decades and providing a path to citizenship for illegal immigrants, that was passed by the Senate in 2013.

Obama's plan was tailored to let roughly 4 million people - those who have lived illegally in the United States at least since 2010, have no criminal record and have children who are U.S. citizens or lawful permanent residents - get into a program that shields them from deportation and supplies work permits.

Obama's program was called Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA).

Shortly before the plan was to go into effect last year, a federal judge in Texas blocked it after the Republican-governed states filed suit against the Democratic president's executive action. The New Orleans-based 5th U.S. Circuit Court of Appeals upheld that decision in November.

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The Supreme Court's ruling is due by the end of June.

Obama's action arose from frustration within the White House and the immigrant community about a lack of action in politically polarized Washington to address the status of people, mostly Hispanics, living in the United States illegally.

Obama has drawn Republican ire with his use of executive action to get around Congress on immigration policy and other matters including gun control and healthcare. On the immigration action, the states contend Obama exceeded the powers granted to him by the Constitution by intruding upon the authority of Congress.





(Reporting by Lawrence Hurley; Editing by Will Dunham)