A group of Republican attorneys general has threatened legal action against President Joe Biden’s administration over the American Rescue Plan, a historic $1.9 trillion stimulus package that was last week signed into law to address the economic impact of the Covid-19 pandemic. They argue the stimulus package is unconstitutional and example of government overreach. They take particular issue with the $350 billion in the measure that went to states and counties to help them offset the costs of handling the pandemic.
“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 in a letter addressed to Treasury Secretary Janet Yellen.
“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,” they continue.
The group asks Yellen to 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.” They warn that in the absence of confirmation, they will “take appropriate additional action to ensure that our States have the clarity and assurance necessary to provide for our citizens’ welfare through enacting and implementing sensible tax policies, including tax relief.”
The letter was signed by 21 attorneys general from such states as Arizona, Alabama, Kentucky, Missouri, Virginia, and Wyoming.
Yellen has been a champion of the American Rescue Plan and has defended sending $1,400 stimulus payments to Americans who are struggling, particularly those who are not receiving other targeted forms of assistance.
“That really helps to make sure that pockets of misery that we know exist out there that aren’t touched by more targeted things, that help is provided there as well,” Yellen said in an interview last month. “I believe we’re going to be better off for it, and that it’s the right thing to do.”
Republicans have argued that the bill, which provides qualifying Americans with $1,400 stimulus checks, extends unemployment benefits, and provides aid to state and local governments, is too costly at $1.9 trillion. The Biden administration has argued that such a large package is necessary to give the economy the boost that it needs; economic forecasters concur with the White House‘s assessment. President Joe Biden signed the legislation into law last week.
