I am having trouble understanding how a pastor has the power to forgive or not forgive our sins. Where is the Office of the Keys found in the Bible? Did Christ give the Church this power and, if so, where is this found in the Scriptures?
The answer to your question is clearly explained in Martin Luther’s Small Catechism.
Luther defines the issue of confession and absolution as the exclusive authority Christ has given His church on earth to forgive the sins of those who recognize and confess their sins, who are truly sorry for them, and who rely on Christ’s promise of forgiveness for those who believe in Him as their Savior.
The section of Scripture cited to support this authority given by Christ to the church is John 20:22- 23. Here, having been raised from the dead, Jesus speaks these words to His disciples, whom He commissioned to carry His message of forgiveness to the world: “Receive the Holy Spirit. If you forgive anyone their sins, they are forgiven; if you do not forgive them, they are not forgiven.”
Although the power to forgive sins (or not forgive them) always belongs to and remains with the church, Luther explains that when pastors called and ordained by the church to preach the Gospel and administer the sacraments on behalf of the church declare to penitent sinners that their sins are forgiven, they do this by the command of Christ, who granted this power to the church.
The pastors do this not by their own authority but rather by the command and authority of Christ on the basis of their call from the church to carry out this function. Consequently, their word of forgiveness is as valid as if Christ Himself, who has given the church that authority, were assuring the penitent sinners of their forgiveness.
Obviously, as Christ’s command indicates, when this declaration of forgiveness is pronounced, the pastor is not pronouncing forgiveness for those who fail or refuse to recognize their sins and acknowledge their need for forgiveness. It should not be forgotten that the section of the Small Catechism that deals with this matter bears the heading “The Office of the Keys and Confession (emphasis added). As Luther points out, confession involves two things—namely, acknowledging our sins as well as receiving “absolution or forgiveness from the pastor as from God Himself.”