Twenty-one Republican attorneys general pressed the Biden administration Tuesday to clarify a provision in the $1.9 trillion economic aid package that the president signed into law last week, warning that its restrictions on state efforts to cut taxes could be “the greatest attempted invasion of state sovereignty by Congress in the history of our Republic.”

The seven-page letter was signed by a host of Republican officials, including the attorneys general of Texas, Arizona, Georgia and Utah. They take issue with a restriction that lawmakers included in a $350 billion relief effort for state, local and tribal governments that prevents them from using the federal funds “to either directly or indirectly offset a reduction in the net tax revenue” as a result of tax cuts. These governments have suffered revenue hits and laid off more than 1 million public employees during the coronavirus pandemic.

The law requires repayment to the federal government of any money that violates those conditions.

In their letter, the Republican officials asked Janet Yellen, the Treasury secretary, to clarify how expansively her department would interpret that portion of the law. Does it simply prohibit states from using the federal dollars to offset new tax cuts, or instead prohibit them from cutting taxes for any reason, even if those cuts were in the works before the law passed? The officials said the broader restriction would be damaging and most likely unconstitutional.

“This language could be read to deny states the ability to cut taxes in any manner whatsoever — even if they would have provided such tax relief with or without the prospect of COVID-19 relief funds,” the attorneys general wrote. “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” — their ability to collect revenues.

Oklahoma, for example, has already passed an income-tax cut through its House of Representatives, including an expansion of the state’s earned-income tax credit that is meant to help low-income workers, Mike Hunter, the state’s attorney general, said in a statement Tuesday. “But,” he warned, “the federal stimulus bill might prohibit Oklahoma from providing this economic relief without losing its share of federal funding.”

A White House spokesman declined on Tuesday evening to comment on the letter. A Treasury Department spokesman did not immediately return a request for comment.

Republican lawmakers in Washington and around the country previously raised concerns over the provision.

“We were planning on giving — reducing the sales tax on used cars, that is low-income and middle-income,” Gov. Asa Hutchinson of Arkansas said on the CBS program “Face the Nation” on Sunday. “And now we’re worried about whether that’s going to be prohibited under this bill. The language seems to indicate it is.”

Twenty-one Republican attorneys general pressed the Biden administration Tuesday to clarify a provision in the $1.9 trillion economic aid package that the president signed into law last week, warning that its restrictions on state efforts to cut taxes could be “the greatest attempted invasion of state sovereignty by Congress in the history of our Republic.

Twenty-one Republican attorneys general pressed the Biden administration Tuesday to clarify a provision in the $1.9 trillion economic aid package that the president signed into law last week, warning that its restrictions on state efforts to cut taxes could be “the greatest attempted invasion of state sovereignty by Congress in the history of our Republic.” The seven-page letter was signed by a host of Republican officials, including the attorneys general of Texas, Arizona, Georgia and Utah. They take issue with a restriction that lawmakers included in a $350 billion relief effort for state, local and tribal governments that prevents them from using the federal funds “to either directly or indirectly offset a reduction in the net tax revenue” as a result of tax cuts. These governments have suffered revenue hits and laid off more than 1 million public employees during the coronavirus pandemic. The law requires repayment to the federal government of any money that violates those conditions. In their letter, the Republican officials asked Janet Yellen, the Treasury secretary, to clarify how expansively her department would interpret that portion of the law. Does it simply prohibit states from using the federal dollars to offset new tax cuts, or instead prohibit them from cutting taxes for any reason, even if those cuts were in the works before the law passed? The officials said the broader restriction would be damaging and most likely unconstitutional. “This language could be read to deny states the ability to cut taxes in any manner whatsoever — even if they would have provided such tax relief with or without the prospect of COVID-19 relief funds,” the attorneys general wrote. “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” — their ability to collect revenues. Oklahoma, for example, has already passed an income-tax cut through its House of Representatives, including an expansion of the state’s earned-income tax credit that is meant to help low-income workers, Mike Hunter, the state’s attorney general, said in a statement Tuesday. “But,” he warned, “the federal stimulus bill might prohibit Oklahoma from providing this economic relief without losing its share of federal funding.” A White House spokesman declined on Tuesday evening to comment on the letter. A Treasury Department spokesman did not immediately return a request for comment. Republican lawmakers in Washington and around the country previously raised concerns over the provision. “We were planning on giving — reducing the sales tax on used cars, that is low-income and middle-income,” Gov. Asa Hutchinson of Arkansas said on the CBS program “Face the Nation” on Sunday. “And now we’re worried about whether that’s going to be prohibited under this bill. The language seems to indicate it is.”

Republican attorneys general press Biden over restrictions on state aid in stimulus plan

President-elect Joe Biden will propose injecting $1.9 trillion into the US economy when he takes office next week, as evidence mounts that the recovery from the sharp downturn caused by Covid-19 is flagging.

With his fellow Democrats narrowly controlling both houses of Congress, Biden has a shot at passing what would be the United States' third massive pandemic aid package.

Dubbed the American Rescue Plan, the proposal released Thursday includes a host of measures aimed at revitalizing the world's largest economy.

Biden aims to raise the federal minimum wage to $15 an hour, help struggling state and local governments, safely reopen schools, roll out a massive Covid-19 vaccination campaign and raise the size of stimulus checks Congress approved last month.

"The return on these investment in jobs, racial equity will prevent long-term economic damage, and the benefits will far surpass the cost," Biden said during a speech in Wilmington, Delaware. "In this moment of crisis... we cannot afford inaction."

Top Senate Democrat Chuck Schumer and House Speaker Nancy Pelosi embraced Biden's plan, vowing to put it before lawmakers.

"We will get right to work to turn President-elect Biden's vision into legislation that will pass both chambers and be signed into law," they said in a joint statement.

But this is just the first step, and the officials said Biden intends to present a second "recovery" plan to lawmakers soon after his inauguration on Wednesday aimed at spurring hiring and fighting climate change.

"We'll use taxpayers' dollars to rebuild America. We'll buy American products, supporting millions of American manufacturing jobs, enhancing our competitive strength in an increasingly competitive world," Biden said.

The government on Thursday reported a spike in new jobless claim filings in the first week of 2021 to nearly a million, its highest level since August, while official data last week showed the economy shed jobs in December.

Biden, 78, will take office after a tumultuous transition that saw a violent mob invade the US Capitol, egged on by outgoing President Donald Trump, as lawmakers were meeting to certify the Democrat's election victory.

His stimulus proposal builds on two massive relief packages Congress approved in 2020, both increasing and extending through September unemployment benefits that have helped tens of millions of people pay their bills after losing their jobs during the pandemic.

It additionally calls for devising a way to maintain those programs if unemployment stays high, and also continues expanded government food assistance as the country struggles with some of its highest hunger levels in modern times.

But controversy could await the plan's provision of $350 billion in funding to state and local governments, which Republican lawmakers blocked throughout last year.&nbsp;

Also potentially challenging is the president-elect's move to increase the size of stimulus checks Americans received in the December package to $2,000, which would fulfill a campaign promise.

But with only the slimmest of majorities in Congress -- including an evenly split Senate where Vice President-elect Kamala Harris could have a tie-breaking vote -- Democrats will have to woo some Republicans if anyone in their party breaks ranks.

One Democratic senator has already expressed hesitation over increasing the payments, but earlier this week Republican Senator Marco Rubio told Biden he would back the additional aid.

The proposal also calls for $160 billion to fight Covid-19, including through a national vaccination campaign, and $170 billion for schools, with the goal of getting most institutions with students in kindergarten through eighth grade open in the first 100 days of his administration.

Prior to the release of the specifics, Michael Feroli of JP Morgan predicted Congress could pare Biden's plan down to the $900 billion range, matching the measure approved last month.

Even the smaller amount would boost GDP growth this year to 5.3 percent and in 2022 to 2.6 percent, he said, a "remarkable expected turnaround" aided also by negligible inflation and the Federal Reserve's maintenance of low borrowing rates.

Other aspects of Biden's plan include expanding tax credits aimed at fighting poverty and helping working parents afford childcare, plus extending a moratorium on evictions.

The plan offers flexible credits and grants for the small businesses that are major employers but have struggled to survive as states imposed restrictions to stop the virus.

President-elect Joe Biden will propose injecting $1.9 trillion into the US economy when he takes office next week, as evidence mounts that the recovery from the sharp downturn caused by Covid-19 is flagging.

President-elect Joe Biden will propose injecting $1.9 trillion into the US economy when he takes office next week, as evidence mounts that the recovery from the sharp downturn caused by Covid-19 is flagging. With his fellow Democrats narrowly controlling both houses of Congress, Biden has a shot at passing what would be the United States' third massive pandemic aid package. Dubbed the American Rescue Plan, the proposal released Thursday includes a host of measures aimed at revitalizing the world's largest economy. Biden aims to raise the federal minimum wage to $15 an hour, help struggling state and local governments, safely reopen schools, roll out a massive Covid-19 vaccination campaign and raise the size of stimulus checks Congress approved last month. "The return on these investment in jobs, racial equity will prevent long-term economic damage, and the benefits will far surpass the cost," Biden said during a speech in Wilmington, Delaware. "In this moment of crisis... we cannot afford inaction." Top Senate Democrat Chuck Schumer and House Speaker Nancy Pelosi embraced Biden's plan, vowing to put it before lawmakers. "We will get right to work to turn President-elect Biden's vision into legislation that will pass both chambers and be signed into law," they said in a joint statement. But this is just the first step, and the officials said Biden intends to present a second "recovery" plan to lawmakers soon after his inauguration on Wednesday aimed at spurring hiring and fighting climate change. "We'll use taxpayers' dollars to rebuild America. We'll buy American products, supporting millions of American manufacturing jobs, enhancing our competitive strength in an increasingly competitive world," Biden said. The government on Thursday reported a spike in new jobless claim filings in the first week of 2021 to nearly a million, its highest level since August, while official data last week showed the economy shed jobs in December. Biden, 78, will take office after a tumultuous transition that saw a violent mob invade the US Capitol, egged on by outgoing President Donald Trump, as lawmakers were meeting to certify the Democrat's election victory. His stimulus proposal builds on two massive relief packages Congress approved in 2020, both increasing and extending through September unemployment benefits that have helped tens of millions of people pay their bills after losing their jobs during the pandemic. It additionally calls for devising a way to maintain those programs if unemployment stays high, and also continues expanded government food assistance as the country struggles with some of its highest hunger levels in modern times. But controversy could await the plan's provision of $350 billion in funding to state and local governments, which Republican lawmakers blocked throughout last year. Also potentially challenging is the president-elect's move to increase the size of stimulus checks Americans received in the December package to $2,000, which would fulfill a campaign promise. But with only the slimmest of majorities in Congress -- including an evenly split Senate where Vice President-elect Kamala Harris could have a tie-breaking vote -- Democrats will have to woo some Republicans if anyone in their party breaks ranks. One Democratic senator has already expressed hesitation over increasing the payments, but earlier this week Republican Senator Marco Rubio told Biden he would back the additional aid. The proposal also calls for $160 billion to fight Covid-19, including through a national vaccination campaign, and $170 billion for schools, with the goal of getting most institutions with students in kindergarten through eighth grade open in the first 100 days of his administration. Prior to the release of the specifics, Michael Feroli of JP Morgan predicted Congress could pare Biden's plan down to the $900 billion range, matching the measure approved last month. Even the smaller amount would boost GDP growth this year to 5.3 percent and in 2022 to 2.6 percent, he said, a "remarkable expected turnaround" aided also by negligible inflation and the Federal Reserve's maintenance of low borrowing rates. Other aspects of Biden's plan include expanding tax credits aimed at fighting poverty and helping working parents afford childcare, plus extending a moratorium on evictions. The plan offers flexible credits and grants for the small businesses that are major employers but have struggled to survive as states imposed restrictions to stop the virus.

Biden unveils $1.9 trillion economic plan as US recovery buckles

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Republican attorneys general press Biden over restrictions on state aid in stimulus plan

Biden unveils $1.9 trillion economic plan as US recovery buckles