More than a dozen Republican attorneys general in their respective states are threatening legal action against the Biden administration over the newly signed $1.9 trillion coronavirus economic relief package, calling the measure aimed at helping struggling Americans “unconstitutional. ”
The Republican officials sent a seven-page letter sent to Treasury Secretary Janet Yellen on Tuesday in which they argue that the relief package, specifically the $350 billion included within to help states and counties offset the cost of dealing with the pandemic, limits those governments’ ability to lower taxes for citizens should they want to.
“Absent a more sensible interpretation from your department, this provision would amount to an unprecedented and unconstitutional intrusion on the separate sovereignty of the States through federal usurpation of essentially one half of the State’s fiscal ledgers,” they wrote to Yellen, according to The Hill. “We ask that you confirm that the American Rescue Plan Act does not prohibit States from generally providing tax relief through the kinds of measures listed and discussed above and other, similar measures, but at most precludes express use of the funds provided under the Act for direct tax cuts rather than for the purposes specified by the Act.”
A White House official told The Washington Post on Tuesday that Congress did the right thing in stipulating certain conditions for localities that receive federal coronavirus relief money.
“So if a state does cut taxes without replacing that revenue in some other way, then the state must pay back to the federal government pandemic relief funds up to the amount of the lost revenue,” the official said, adding the bill “does not say that states cannot cut taxes at all” but instead “simply instructs them not to use that money to offset net revenues lost if the state chooses to cut taxes.”
GOP lawmakers on Capitol Hill have criticized the bill for its size and for what they called Democratic pet projects and funding for initiatives not related to the coronavirus.
Democrats have argued a sweeping and comprehensive package was needed to adequately address the economic devastation American workers have been hit with during the pandemic.
President Biden, first lady Jill Biden and Vice President Harris have been touring the country this week, touting the American Rescue Plan and discussing a potential future tax hike for millionaires to pay for the administration’s policy agenda.
“It’s one thing to pass a historic piece of legislation like the American Rescue Plan, and it’s quite another to implement it,” Biden said on Monday.