Breaking: Ohio Challenges Constitutionality of American Rescue Plan Act (Updated)

"The Tax Mandate thus gives the States a choice: they can have either the badly needed federal funds or their sovereign authority to set state tax policy. But they cannot have both. In our current economic crisis, that is no choice at all. It is a metaphorical 'gun to the head.'"

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Yesterday, I noted that 21 State Attorneys General threatened to challenge the American Rescue Plan Act. They alleged that a conditional spending provision was inconsistent with South Dakota v. Dole. Missing from that list was Ohio. Now we know why.

Today, the Ohio Attorney General filed suit against Secretary Yellen and the Treasury Department. The Buckeye State seeks a preliminary injunction.

Here is the introduction:

The Tax Mandate bars States that take money under the Act from using that funding to "directly or indirectly" offset revenue loss from tax reductions. Id. (emphasis added). But since "[m]oney is fungible," Holder v. Humanitarian Law Project, 561 U.S. 1, 37 (2010), any money that a State receives through the Act will necessarily offset, either directly or indirectly, every tax reduc-tion that the State might pursue. The Tax Mandate thus gives the States a choice: they can have either the badly needed federal funds or their sovereign authority to set state tax policy. But they cannot have both. In our current economic crisis, that is no choice at all. It is a metaphorical "gun to the head." Nat'l Fed'n of Indep. Bus. v. Sebelius ("NFIB"), 567 U.S. 519, 581 (2012) (op. of Roberts, C.J.).

This coercive offer of federal funds violates the Constitution. The Spending Clause empowers Congress to "provide for"—that is, to spend money in support of—the "general Welfare." Art. I., §8. c.1. But while "Congress has substantial powers to govern the Nation directly, including in areas of intimate concern to the States, the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress' instructions." New York v. United States, 505 U.S. 144, 162 (1992). And Congress may not circumvent that limitation by using its spending power to "indirectly coerce[] a State to adopt a federal regulatory system as its own." NFIB, 567 U.S. at 578 (op. of Roberts, C.J.). That is precisely what the Tax Mandate attempts to do: it seeks to "drive the state legislatures under the whip of economic pressure into the enactment" of Congress's preferred tax policies. Stew-ard Mach. Co. v. Davis, 301 U.S. 548, 587 (1937).Congress exceeded its constitutional authority when it passed the Tax Man-date. The Court should enjoin the provision's enforcement, at least in its application to Ohio.

The relief bill would give Ohio about $5.5 billion, which translates to roughly 7.4% of the Ohio's total expenditures. Definitely in the 10% ballpark referenced in NFIB.

In NFIB, the Court determined that the Medicaid expansion coerced the States because it "threatened" to deny States funding equal to "over 10 percent of" their "overall budget[s]" unless they agreed to expand their Medicaid programs. 567 U.S. at 582. The Act is similarly coercive: Ohio will be denied funding equal to 7.4 percent of its total expenditure in 2020—funding the State badly needs in an economic crisis—unless it agrees to limits on its power to tax.

The suit also explains that the condition flunks the Pennhurst test:

The Tax Mandate is far from "unambiguous." What changes to tax policy that cause a decrease in net revenue are "indirectly" offset by funds acquired through the Act? Unless the answer is "every change to tax policy," neither the English language nor economic theory provides an answer. And how does one know whether a change to tax policy causes a net reduction in revenue? For example, if revenue would have decreased even further but for a tax cut, would the tax cut still violate the Mandate? The Tax Mandate does not answer these questions. As a result, the conditions it imposes are too ambiguous to be upheld under the Spending Clause.

The Biden Administration may not be ready for this suit. At present, there is no confirmed Solicitor General. Acting Solicitor General Prelogar has spent all her time flipping positions before the Supreme Court. I'm sure Roberts is seething. And I have no clue who is running the Office of Legal Counsel. Someone in the White House must know this case is a loser. And even if Secretary Yellen issues some favorable guidance, I don't think Ohio's injury will be satisfied. An agency cannot avoid a Pennhurst problem through Chevron deference. In other words, if the spending provision is ambiguous, the government cannot cure that separations of powers problem through guidance documents. The remedy for an ambiguous spending provision is to declare it unconstitutional. Merrick Garland knows all too well how this case will end.

Update: A Treasury Department spokesperson gave a statement to the New York Times:

But the Treasury Department said on Wednesday that if a state that took relief money cuts taxes, that state must repay the amount of lost revenue from those cuts to the federal government.

"It is well established that Congress may establish reasonable conditions on how states should use federal funding that the states are provided," said Alexandra LaManna, a Treasury spokeswoman. "Those sorts of reasonable funding conditions are used all the time — and they are constitutional."

She added that the new law "provided funds to help states manage the economic consequences of Covid-19, and gave states flexibility to use that money for pandemic relief and infrastructure investments."

The Treasury Department rejected the idea that the provision, which was added to the relief legislation at the last minute, was prohibiting states from cutting taxes. States are free to decline the federal funds, or they can repay the money if they are in fiscal shape to cut taxes.

"The law does not say that states cannot cut taxes at all, and it does not say that if a state cut taxes, it must pay back all of the federal funding it received," Ms. LaManna said. "It simply instructed them not to use that money to offset net revenues lost if the state chooses to cut taxes. 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."

That is one interpretation of the statute, but not the only one. Indeed, I'm not even sure that's the best reading. Putting the word "simply" in the sentence is misleading. I really dislike the word "simply," and its close cousin, "clearly." These are word designed to obfuscate legal argumentation.

We also learn that West Virginia is working on a suit. But I am confident this case will not be brought in the Fourth Circuit:

More lawsuits could soon follow. Attorney General Patrick Morrisey of West Virginia said such action would include seeking a court ruling "that the unprecedented and micromanaging provision violates the U.S. Constitution."

At a briefing with reporters on Wednesday, Mr. Morrisey said he had been working on a draft of a complaint. He has been talking to other states about the mechanics of the legal challenge and where it should be filed.

"There are huge legal and constitutional problems with this provision," Mr. Morrisey said. "This may be one of the greatest attempted invasions of state sovereignty by Congress in the history of our Republic."

 

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  1. Why is Ohio entitled to a preliminary injunction? Let them pass a tax cut and then, if the federal government moves to withhold aid, Ohio can sue. Isnt that how tax / spending cases usually work? Maybe not with states?

    1. In before case dismissed for “lack of standing” because they didn’t try to violate the law before suing about the law.

      1. When Nevada tried to overturn the 55 mph national speed limit, the state raised a speed limit to 70 for the few hours it took for the local DOT office to threaten to withhold funds. Then they put the old speed limit back and sued and lost. I expect the brief dance was negotiated ahead of time between state and federal DOT.

        1. That is an interesting story, thanks for sharing. I didn’t know that. Was anything similar done for the 21 drinking age, or did nobody sue on that one?

          1. _South Dakota v. Dole_ was the drinking age case.

            1. Ah, I see South Dakota sued and lost. I surprised to see Scalia/Rehnquist in the majority defending this kind of blackmail. But it was 1987 after all, the very start of the conservative legal revolution, and Originalist jurists were still in a “government policy default good” frame of mind.

              1. I don’t think Dole is surprising. It’s not really blackmail to put a pretty straightforward and limited condition on a small portion of funds that you can take or leave. That’s why Dole had the footnote that led to NFIB. It would sound less menacing if it was: states who have drinking ages at 21 get a 10% boost in highway funding even
                though it’s economically the same.

                1. The difference in this case is not that it’s a fairly minor % boost in highway funding, but amounts equating to ~10% of entire state budgets. Such values undoubtedly cross into coercion

                  1. Yes. That’s why there was that footnote and the holding in NFIB. I was just responding to the point that Scalia and Rehnquist were in the Dole majority. The concept of conditions on federal funding isn’t inherently blackmail or bad for federalism.

                2. I never understood why 20-year-olds couldn’t sue as individuals under the auspices of the 14th Amendment.

      2. I mean, yeah, that’s mostly how standing works. And it is a good thing that you can’t sue over things that don’t affect or injure you. Advisory opinions bad.

        But even then you can still get a preliminary injunction if something will injure you, which this does to Ohio. I was just mainly thinking the anti-injunction act would forbid such an injunction where you have to pay the tax or can accept the spending, and then sue for a rebate or sue if things are withheld.

        But I could be misremembering the anti-injunction act or those principles more generally.

        1. “standing” and “mootness” are the two ways that Courts, to put it politely, avoid political issues (for a variety of reasons). That’s all I’m trying to say. If they want to dodge this one, they will use standing.

        2. You can get a preliminary injunction if something will injure you irrreparably. Ohio’s injury would be cured with $$, that is about as reparable as it gets.

          1. It’s irreparable to the extent they couldn’t retroactively follow the rules and claim the money if they lost.

    2. Why?
      Because that approach was used successfully during the Trump years. What goes around, comes around. It is inevitable.

    3. Is it permissible to force a state to purchase something without knowing the cost? Conversely, if the Feds place an unconstitutional burden on accepting federal monies, only those states willing to accept the exposure of bankruptcy has the right to challenge the unconstitutionality?!?

    4. Really but wasn’t the problem with the Obamacare case was that they would lose Medicaid funding. Which had previously been promised and given to states. In this case, this is one-time money the court is saying you cant use to offset tax credits. How is that different from congress saying here’s money for roads you can only use it for roads.

    5. This case smells of ungrateful states trying to use the fed’s money to give their donors and companies tax breaks.

  2. Glory to the new Resistance!

    1. The Biden Administration may not be ready for this suit. At present, there is no confirmed Solicitor General. Acting Solicitor General Prelogar has spent all her time flipping positions before the Supreme Court.

      The timing of the suit is…..exquisite.

      1. The timing is exactly when you would think it would be: right after the action. I’m sure the professionals in the federal programs section of DOJ are more than equipped to handle it. There wasn’t an SG for
        Trump until 9/17 and they were already embroiled in litigation over his policies.

        Josh is just the kind of elitist who thinks that you need to have a fancy big-name practitioner at the sacred SG position to get any lawyering done. He is of course, mistaken.

    2. “Glory to the new Resistance!”

      It’s just the usual culture war, with the customary winners and losers . . . but some newbies (and particularly slow observers) seem to be excited by the inexplicable expectation of a different result.

      1. Actually RAK it has zero to do with culture wars. Thought you are too preoccupied with clinging to your bigotry to see that.

        1. These Republican attorneys general are just trying to jab the liberals. They claim the money is “badly needed,” yet no Republican senator voted to provide it.

          I expect them to succeed about as much as Republicans have succeeded in promoting and defending their bigotry for the most recent 60 or 70 years.

          1. Too frightened to come back to the hit and run forum, you just shitpost here?

            1. I am not familiar with you, your particular flavor of right-wing bigotry, or the ‘hit and run forum,’ but if you have a comment, make it, clinger.

              1. Yup, a shitpost answer.

                1. Getting stomped by people like me in the culture war has made you cranky to the point of reflexive conduct, Don Nico.

                  Why not ditch the stale bigotry and obsolete right-wingery and become part of modern America instead of just clinging to a lost cause?

          2. Look Kirkland, if the Republican states didn’t have to repay the money — $13,400 per taxpayer — then their getting their fair share of this largess wouldn’t be such an issue.

            Now if you were to argue that taxpayers in a state which rejects the money don’t have to pay it to the IRS — *and* that would include taxpayers who moved into the state — then you’d have an argument.

            But otherwise you don’t….

            1. Republican states neither get nor provide their fair share, clinger. They tend to be parasitic backwaters inhabited by the depleted human residue that remains in our rural and southern stretches after generations on the wrong end of bright flight.

              Other than that, great comment. It probably will turn the tide of the culture war.

              1. More ill-tempered bigotry.

  3. The Biden Administration may not be ready for this suit.

    Of course not. This is what happens when you jam a bunch of EO’s and legislation down the populace’s throat in a hurry. But that doesn’t really matter to the narrative, does it?

    1. I don’t think the populace feels very jammed tbh.

      1. I think you’re going to have to cite some public opinion polling for that one. And define what you mean by “jammed”.

        1. https://mobile.twitter.com/kylegriffin1/status/1372207535827030018

          Doesn’t seem like most people are having their throat jammed by Biden.

          1. You’re shifting to “presidential approval”, which is different than disliking current Federal policies. Polls of polls show only about 50% presidential approval rating, btw. Simultaneously, the right track, wrong track is very incongruous with you thinking the public likes President* Biden, in that only 38% think the country is heading in the right direction. More amusingly, only about half of voters ACTUALLY think that Biden is in charge according to polls, which is very, very amusing.

            You have to look at specific topics, specifically EO and policy/legislation that President* Biden has or proposes, as per your original assertion. When you look at those, like say what’s going on at the border when Biden has let things go wide open, Rasmussen reports “73% of Voters Concerned About Border Crisis, Majority Oppose Amnesty”

            That, I’d say, is feeling “jammed” for now, at least.

            1. It included specific topics, including the one we are talking about: Covid relief.

              1. Fair point, but Biden isn’t doing anything different than Trump would have on COVID, campaign rhetoric on both sides aside.
                And Trump’s numbers were similar on those issues, so I count that as carryover. It also helps that the PCR test was thrown out as invalid on inauguration day and we see infection rates drop. They didn’t even try to hide that one.

                When it comes down to it, you’re just saying people don’t seem upset about getting TANSTAAFL money. Did you really expect the average American to understand the long-term effects of going to 150% of a debt to GDP ratio when they are given $1,400 in crumbs from a 2 trillion dollar funny money law?

                1. At the current rate Joe Bidet’s administration will be approaching 200% debt to GDP by 2024.

            2. “ACTUALLY think that Biden is in charge according to polls, which is very, very amusing. ”
              He might dispel that opinion if he dared to hold a few (or even one) unscripted, open press conferences.

            3. Simultaneously, the right track, wrong track is very incongruous with you thinking the public likes President* Biden, in that only 38% think the country is heading in the right direction.

              I see that you’re back to making things up.

              We noticed the right track/wrong track numbers hit 50-50 last week in our running POLITICO/Morning Consult tracker, a high-water mark for the past year. This week, it crept up even further to 55% saying the country is on the right track, 45% on the wrong track. The previous high was 43-57 in the March 8, 2020, poll, before the pandemic sent everyone home. The national mood bottomed out over the summer, ticked up a bit in the fall, then plummeted to 18-82 after the Jan. 6 riot. It’s been on the upswing since President JOE BIDEN’S inauguration and growing optimism that a return to normal life is not far off.

              Rasmussen

              ‘Nuff said.

      2. “I don’t think the populace feels very jammed tbh.”

        They are getting showered with money.

        Inflation, increased gas prices and higher mortgage rates will soon make many feel pretty jammed.

        1. Obsolete, bigoted, disaffected, doomsday-predicting, anti-government cranks are among my favorite culture war casualties.

        2. “They are getting showered with money.”

          Which is cheating and not fair. The government doing something that provides a material benefit for broad swaths of people is a form of bribery. If you can’t win your election by making the more compelling case for fiscal austerity and entitlements reform, you don’t deserve to win.

          1. “Which is cheating and not fair. ”

            Whatever, no party cares about spending. GOP bribes with tax cuts, Dems bribe with spending.

            Covid relief/stimulus alone this last year is more than the entire amount brought in by taxes during that time. Of course normal spending was not cut, which already exceeded tax receipts.

            This amount of cash flooding the system is going to mean inflation. A lot of it.

            But free money!

            1. Which is in no way different than dropping taxes for corporations and the wealthy to the tune of $2.3 Trillion and then continuing to spend at the same rate.

              At least in this case the people getting the free money need it for something more than paying off the mortgage on their ski lodge.

              Who knows, supply side economics (aka: trickle-down) has been a documented failure since Regan. Maybe demand side will produce a more useful result?

              1. Except who really pays the corporate income tax? Usually it is is the customers. Corporate executives don’t pay it. The company only pays it if it books earnings and profits in order to pay dividends or distributions.
                The corporate income tax is expensive to comply with, expensive to enforce, and generally avoided by major companies.
                You could really screw Big Law by repealing the corporate income tax and focusing the personal income tax on the wealthy. How about some limits on Charitable contributions? Don’t you love it how Bill Gates and Warren Buffett give their billions to a charity that they control and the government will never get much of any ofbit?

                1. These obsolete clingers get crankier every day. They can’t be replaced — by better Americans — too soon.

    2. “At present, there is no confirmed Solicitor General.”

      As was true for 1/4 of the Trump Admin.

      “Acting Solicitor General Prelogar has spent all her time flipping positions before the Supreme Court. I’m sure Roberts is seething.”

      She’s done it, what, once? Twice if you count the ACA (which was actually filed by her deputy)? You really think that’s eating up a lot of her time?

      “And I have no clue who is running the Office of Legal Counsel.”

      Christopher Schroeder. Not sure how your inability to use a search engine impacts the Biden Admin.

      If Treasury issues favorable guidance, that will make an argument for lack of standing much stronger. I don’t see how you could claim otherwise.

      1. Josh is an elitist who thinks that only the people at the top can do things and the only thing that matters is SCOTUS and the SG. Never mind that the DOJ line attorneys and career officials (who are often from elite backgrounds anyway) are perfectly capable of defending a case about statutory interpretation and the scope of federal power.

        This is funny because he teaches at school that is probably going to be churning out a lot more practitioners doing the basic work that forms the bulk of the legal system instead of smug federal clerks writing self-indulgent concurrences with snarky openings.

        1. Seems it might be a tad bit easier to defend major cases before the SCOTUS in regards to state versus federal power with an actual confirmed SG.

          But that’s just me.

          1. Well it won’t be before SCOTUS for about a year, assuming expedition at every level. There will likely be an SG by then. And the SGs office, including the non-confirmed principal deputy are experienced SCOTUS/appellate practitioners. They’ll be fine. You could put Edwin Kneedler, the workhorse of that office for 30 years, on it and he’d do great. Kneedler even argued the severability issue in NFIB.

          2. “But that’s just me.”

            More armchair than lawyer talking.

        2. Josh is an elitist

          Seems more like a troll.

    3. The Barrack O’Biden admin not being prepared is the critical mass that may finally slow the schmucks down.

      The cartoon I saw a while back was JFK saying “we shall overcome” and Joe BiteMe saying “we shall overwhelm.”

  4. The Biden Administration may not be ready for this suit. At present, there is no confirmed Solicitor General. Poor Acting Solicitor General Prelogar has spent all her time flipping positions before the Supreme Court. I’m sure Roberts is seething

    Overwrought.

    1. Josh is sure about a lot of things.

      1. Glass houses are a thing with you then?

          1. Intellectual humility is indeed a rare trait.

            1. Tell that to Josh.

                  1. New Reporter 1: “A rare source of agreement between the left and right occurred today, in our ever more hyper-polarized America.”

                    News Reporter 2: “Tell me more Chet, what are the details on scene?”

                    News Reporter 1: “Two regular commentators both agree that a semi-famous commentator and poster on a niche legal blog has an big ego.”

                    News Reporter 2: “Isn’t that a bit of an oversell from your lead, Chet?”

                    News Reporter 1: “Not really, Steward, have you seen the dumpster fire that is Twitter lately?”

                    News Reporter 2: “Good point. Now, Sandy, what’s the weather going to be in the Tri-State Area this weekend?”

                1. Constant tu quoque is no way to go through life.

                  1. Looking glass self, mon ami, looking glass self.

                    1. Facile.

                      I didn’t do that in this thread, whereas you did it all over the place.

                      Cant do the stats obviously, but I’d wager in general vastly more of your posts are you pointing to the left to ignore the right than me pointing to the right; it’s not my style. It’s very much yours.

      2. “Someone in the White House must know this case is a loser.”

        [the administration’s lawyers check Prof. Blackman’s prediction record and crack that 3 p.m. beer]

  5. What an economy bustin’, job killing, savings killing, povert exploding, unneeded piece of Commie doodo this lawyer bill is. Judicial review does not really apply to big government lawless legislation. The judge is paid by big government, and supports big government. Judges are biased in favor of big government. If the Supreme Court has a biased that is its biggest.

  6. RE: “Money is fungible”

    “Fungible” means “tasty in mushroom sauce”. The root is fung, as in “fungus”. The Italian for “spaghetti with mushrooms” is “spaghetti con i funghi“.

    1. But, Mr Toad, in this case the funghi are deadly nightshade.

  7. An agency cannot avoid a Pennhurst problem through Chevron deference. In other words, if the spending provision is ambiguous, the government cannot cure that separations of powers problem through guidance documents.

    Citation that backs this claim?

  8. “The Tax Mandate thus gives the States a choice: they can have either the badly needed federal funds or their sovereign authority to set state tax policy. But they cannot have both. In our current economic crisis, that is no choice at all. It is a metaphorical ‘gun to the head.'”

    This makes no sense. If they badly need the money why do they want to cut taxes?

    Look. Let’s say your son has a job, but because of the pandemic has hours and pay are cut substantially. Fortunately you are able to help out for a while. Now he comes and says that gee, between your subsidy and his savings he doesn’t have to work at all for a while, so he’s quitting his job completely.

    Would you consider that acceptable? Might you rethink the subsidy?

    1. I think they have a point that it is over-inclusive. You can’t give targeted tax relief or credits to a small business or something. The Senate probably was trying to stop giveaways to the state tax giveaways to the wealthy and encouraging future spending cuts which is good policy wise, but I think Ohio has a point that it could broadly prohibit them from doing other useful things to stimulate the economy or aid people. Not that it actually was going to do those things of course, but you know, theoretically.

      1. Does precedent support striking down the condition on the basis of it being overinclusive to Congress’ purpose?

        1. Over-inclusivity could lead to issues with satisfying three of the Dole factors. It could be so broad that it is an ambiguous requirement, so broad that it would be unconstitutional because it infringes on state sovereignty, or so broad that it is no longer related to pursuing the federal interest or policy.

          1. Ohio’s Republican attorney general declares in writing that the money is ‘badly needed.’

            Ohio’s Republican senator voted against the aid.

            This is why Republicans can’t have nice things and get stomped in the culture war.

          2. Of course overinclusiveness could undermine Dole’s federal interest factor. But, has any precedent reached this conclusion? I’m not following how overinclusiveness impacts ambiguity or any other Dole factor.

      2. Is the point of the stimulus to help state politicians, employees, and unions , or help the people of the state?

        If the state decides that a targeted tax cut will help the people why should they have their hands tied?

        And your hypothetical makes no sense whatsoever. Are you trying to say the Ohio populace are like a deadbeat son that doesn’t want to work? Or the States politicians are like the deadbeat son?

        I got a better hypothetical for you: your son kept his job, but he is asking for more money because on his way home from work he saw a homeless woman with 3 kids so he gave her all his money to rent a room and buy food.

    2. The real problem, as I’ve pointed out before, is analyzing this as though the money were coming from the magic money tree, rather than from the citizens of the states.

      The federal government takes away 5% of every state’s economy, say, then offers to give it back if the state spends the money as dictated. But it’s not free money, it’s money that derived from reducing the economic pool from which the state, too, draws its revenues.

      So the benefit is inextricably linked to harm, and only the benefit is ‘voluntary’.

      1. I think this argument is precluded by Dole.

        1. Dole specifically references the values of the money involved, and that they aren’t coercive.

          When you start dealing with very large numbers (>5% of entire state budgets), they start being coercive

          1. Brett argued the federal government taxing the individuals of a state in an amount equal to 5% of the state’s economy is sufficient to establish coercion. Dole precludes that argument.

            1. Dole specifically doesn’t preclude that argument, and specifically mentions that it was the low value of the grant that meant it was coercion.

              1. I think you are not properly understanding Brett’s argument which has nothing to do with the size of the grant. Instead, Brett argues it is the size of federal taxation, no matter the size of the grant, that suffices to establish coercion.

                1. No, in the above example, Brett has the federal government granting the money back to the state, in exchange for certain “conditions.” It’s a sizable % (5% of the state GDP)

                  Brett makes the additional point, that the money isn’t “free” and ultimately comes from the state’s citizens in the first place, which increases the coercion. But ultimately, it’s the size of the money granted back that hits the Dole provisions.

                  Let’s put this in context.

                  I take 0.01% of your paycheck. I then offer it back to you, in exchange for “conditions”. You can choose to accept or not. But it’s a fairly minor value, so it’s not coercion.

                  I take 50% of your paycheck. I then offer it back to you, in exchange for conditions. You can choose to accept it or not. But it’s a major value, so it is coercion.

                2. My point is that everybody in favor of this analyzes it as though the money were magically coming from nowhere.

                  It’s not magically coming from nowhere. It’s coming out of the state economies. Every cent the federal government spends comes out of the same ultimate pool the states get their budgets from, the US economy. Either as immediate costs, or future obligations.

                  Every cent of this money reduces the capacity of the states to tax their own citizens without overburdening their economies.

                  The states suffer harm as a result of this program’s very existence, because this program’s existence shrinks the pool from which they are funded, too.

                  Now, that’s not any different from any other federal spending program. But we don’t usually pretend the states have a choice about the defense budget, do we?

                  Again: The goal of this program isn’t stimulus. It’s to force the states that have chosen a low tax, low service model of government, to adopt a high tax, high service model, instead, so that the ‘blue’ states will escape their current competitive disadvantage.

                  This program aims to force state level spending increases, which will be politically difficult to reverse. Then when the program ends, the states will be forced to raise taxes to sustain that new spending, and all states will be high tax states, the blue state exodus will end.

    3. bernard11, you made an interesting point. My thought is that a state needs revenue for the long haul, not just short-term. I could easily envision a state passing tax credits, or even rate reductions to stimulate the economy short term and set the stage for long term growth. In the People’s Republic of NJ, they do tax holidays or reduced sales tax in specific locales to ‘juice’ the economy. Why attempt to remove that option? That provision is bad law, and it is bad policy.

      The provision is severable, and it won’t affect disbursements by severing it. So remove it. The alternative is a prelim injunction that freezes everything; things like agency guidance on how to handle taxes for different situations, infrastructure legislation, etc and potentially would harm the economy quite badly. And waste a lot of Court time better spent elsewhere.

      1. Of course the state could argue that a particular credit was intended to enhance long-term revenue, and therefore did not actually reduce revenue at all.

        You have to be careful with that because the argument is usually nonsense, but it might be plausible in some cases.

        1. bernard11, if we were not coming out of the throes of a pandemic, it would be a lot harder to make that ‘use tax policy to help stimulate revenue and economic growth’ argument; I agree about that. But here we are; our country is climbing out of the biggest hit to the economy in at least a century. Let each of the states figure out their own best way out of this and if that involves a mix of tax holidays, tax credits, tax cuts, and direct assistance, then so be it.

    4. Bernard,

      Let’s do this differently. The Federal Government promises you a $10,000 tax refund. But in order to obtain it, you have to vote Republican in the next election.

      Would that be legitimate? Why or why not? The federal government is free to spend money how it wants, right? It just is putting conditions on it.

      Perhaps you’ll argue “The Federal Government can’t tell people how to vote”. (Just like the federal government can’t tell states how to control their tax policy). But it’s not doing that. It’s just putting incentives on a tax refund for people. People don’t need to take it if they don’t want it.

      1. Per Dole, a condition cannot itself per se be unconstitutional, which a requirement to vote Republican would be.

        1. Why would it be unconstitutional? The government isn’t TELLING you to vote constitutional. Just like the government isn’t telling the states how to handle their tax policy.

          It’s just saying there’s a condition. You don’t HAVE to take the funding.

          1. Are you kidding? Do you really think a government requirement to vote republican is per se (i.e., in and of itself without reference to federalism) constitutional?

            Now it is true that a federal law which forbid a state from cutting taxes would violate the Tenth Amendment and principles of federalism. But, Dole permits funding conditions that would violate the constitution in those ways. What Dole does not permit is conditions which violate the First Amendment or other restrictions not tied to federalism.

            1. But, Dole permits funding conditions that would violate the constitution in those ways. What Dole does not permit is conditions which violate the First Amendment or other restrictions not tied to federalism.

              What an exquisitely delicate dance. “Unconstitutionality is cool — just not THAT kind!”

            2. “Do you really think a government requirement to vote republican”

              As repeatedly noted, it’s not a “requirement”. It’s just a condition. You don’t have to take the money. And “conditions” like this, which violate the Constitution, are apparently fine, according to you.

              The Governments in the US make all types of policies which selectively favor one party or another. Most classically the Delaware law that selectively states judges on its Supreme Court must be of a major party.

              This isn’t even such a law. It’s just a condition.

              1. From Dole:

                the [conditional funding] power may not be used to induce the States to engage in activities that would themselves be unconstitutional.

                A condition to vote Republican almost certainly discriminates in violation of the 14th Amendment. A condition to not cut taxes does not. The Third Circuit held Delaware’s major party provision unconstitutional. SCOTUS dismissed because of a lack of standing without reaching the merits.

                1. And again, it’s not the STATES doing it in the above case, but the Individual.

                  And an individual choosing to vote republican is entirely a constitutional provision.

        2. Furthermore, a “condition” that a state not change taxes in any way that reduces revenue for the next four years would be unconstitutional.

          A state could do it on its own, sure. Likewise, a person could choose to vote Republican on their own. But a “condition” which dictates such large receipt of funds in exchange for following the condition? Is there anything the federal government “couldn’t” demand as such as condition in your opinion?

        3. Per Dole, a condition cannot itself per se be unconstitutional, which a requirement to vote Republican would be.

          The Dole “independent constitutional bar” concerns conditional grants to states that require the states to act unconstitutionally. It isn’t implicated in Armchair’s hypo of a direct federal grant to individuals, but likely isn’t relevant to any Rescue Plan Act challenge because the encouraged state behavior, failing to cut taxes, isn’t unconstitutional. Other commenters are on surer footing pursuing the ambiguity and coercivity prongs.

          1. Indeed. And it is perfectly constitutional for an individual to vote republican, just as it is perfectly constitutional for a state to decide not to cut taxes.

            1. I think you missed Reason’s point that Dole does not apply to direct federal grants to individuals and thus your hypothetical is inapt.

      2. Silly example.

        The government isn’t telling the states they have to do anything particular, just that they can’t hand out the money in tax cuts. Think of it as a sort of broad-stroke matching grant.

        I mean, here they are, absurdly screaming about “badly needed” funds at the same time as they seem to want to cut taxes.

        1. The government IS telling the states they have to do something in particular.
          It’s telling them they can’t change their tax code in any way that reduces revenue for the next 4 years. Or they don’t get any funds.
          You can’t deny that.

          And if the federal government can dictate to the states how they handle their own taxation via such methods….What can’t they do via such methods?

        2. The funds may be “badly needed” by different portions of the populace, and perhaps not so badly needed by the state itself as an entity.

          For example, $350 Billion of this aid is to support schools. But what if Ohio thinks they have a hold on schools, but really would like to give an even more generous child tax credit (in response to the Covid fertility crash). They then use the Covid school money for schools, but cut their own school funding the same amount, so they can give out the tax credits.

    5. “ This makes no sense. If they badly need the money why do they want to cut taxes?”

      Maybe the taxpayers badly need the money too.

    6. Bernard, do you have any idea what “federal” actually means, or what the 10th and 11th Amendments were all about???

      The states are sovereign, the federal government isn’t…

  9. RE:

    The Tax Mandate thus gives the States a choice: they can have either the badly needed federal funds or their sovereign authority to set state tax policy. But they cannot have both. In our current economic crisis, that is no choice at all. It is a metaphorical “gun to the head.” […] This coercive offer of federal funds violates the Constitution. The Spending Clause empowers Congress to “provide for”—that is, to spend money in support of—the “general Welfare.” Art. I., §8. c.1. But while “Congress has substantial powers to govern the Nation directly, including in areas of intimate concern to the States, the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress’ instructions.”

    To my non-lawyer’s eyes, this argument looks like it might be equally strong as an objection to the Hyde Amendment. Can someone explain what I’m missing?

    1. Perhaps a distinction could be the Hyde Amendment only restricts how federally-provided funds will be spent by the states, whereas this condition restricts other policies set by states.

      1. Is there a difference? Money is, as the fellow said, fungible.

        1. I am not following your argument.

    2. It’s the “indirect” part that’s the problem, and makes this different than the Hyde amendment.

    3. Can someone explain what I’m missing?

      IOKIYR.

      1. SMLMCU !!

  10. Seems to be an own goal by the Senate. I get what they were trying to avoid: giving the state money and then the state turning around with tax giveaways to the most wealthy and then justifying spending cuts because of their balanced budget requirements. Maybe taking out “indirectly” which Ohio emphasized, would have been better at achieving the result, but I’m not so sure. I think this is a case where they tried to do a catch-all to avoid State shenanigans but it is ultimately unworkable and over-inclusive.

    1. Perhaps “indirectly” was included to prevent states from directly spending the stimulus money and then lowering taxes separately. I would count that as indirectly using the stimulus money to finance a tax cut if there had been no tax cut without the stimulus money.

      1. That’s almost certainly what it was supposed to do, but is probably a bridge too far. Had the state said you can’t use this money for tax decreasing, they may have got away with it.

    2. What they’re actually trying to do is force the states to increase spending, deny them the choice of balancing their budgets at a lower total level of spending than the federal government wants.

      So the money is available only if it goes into extra spending, which is then expected to become the new norm for spending levels.

      1. Yes exactly. That’s the point of stimulus. You can’t give people money for aid and then they don’t actually spend it on pumping up the economy.

        1. If tax cuts or tax credits don’t pump up the economy then what is the $1400 per person tax credit stimulus payment for?

          I think the prohibition on tax cuts is they don’t want conservative governors doing anything popular with the money, like putting more money in people’s pockets, only Biden is allowed to send people money to enhance his popularity.

          1. They don’t want tax giveaways to wealthy people followed by spending cuts that affect the indigent/poor/working class/middle class.

            Also: Trump delayed checks so he could sign them and send a campaign flyer. Glass houses, etc.

            1. “tax giveaways to wealthy people ”
              First, let’s see whether the D’s reinstate full deductability of SALT.

              1. That’s their wealthy.

                But it will be interesting when they propose it, will all the usual suspects label it as “tax cuts for the rich”, as it surely is? Will they point out that they are overwhelmingly white too?

              2. You have a point on this, from a pure financial point of view, but there is an emotional aspect to the issue.

                The cap was mostly intended just to give the blue states a poke in the eye, or a big “Fuck you.” If it had been part of a sensible tax increase it wouldn’t be troubling, I think. But like everything else, it was a shot in the culture wars, so expect the fire to be returned.

                My guess, no more than that, is that the cap will be raised, but not removed.

                1. I live in the People’s Republic of NJ, and I think the SALT cap should stay. Why? Because it is forcing more focus on our state spending, and here in the People’s Republic, it is NJ state and municipal spending that drives up my property taxes. It is not an accident that people are voting with their feet, and leaving NJ. You have probably read an article or two about how NJ loses people every day from out-migration to lower tax locales.

                  This is the start of fiscal awareness. And perhaps some fiscal discipline. We need that in the People’s Republic of NJ, because we have none.

            2. But they didn’t specify that.

              Arkansas for example was planning on cutting the tax on used car sales. Not many rich people spend a fortune on used cars…

              But this would prevent that too.,

          2. […] only Biden is allowed to send people money to enhance his popularity.

            So you’ve entirely forgotten that it’s because of Republicans in the Senate that the second stimulus wasn’t bigger?

            Democrats wanted a bigger second stimulus. Trump wanted a bigger second stimulus. It was Republicans in the senate that decided this would be Biden’s legislation, and not Trump’s.

        2. But, the government is doing exactly that at the same time. Giving people money directly.

          Just like some of the states plan.

        3. If they wanted “stimulus”, they could get that by spending the money at the federal level, or just handing out bigger covid checks. So, no, the purpose is NOT “stimulus”.

          The purpose is to force an increase in state spending levels, which would subsequently be politically difficult to reverse. (Because of the usual concentrated benefits, diffuse costs problem.) They’re trying to force states that are pursuing a low taxes, low services model to switch to the ‘blue’ state high tax, high services model, so as to remove the competitive disadvantage high tax states suffer under. Which has really been biting them lately.

  11. So here is what I understand the policy of Republican controlled states.

    1. Take the stimulus funds because they need the money to offset revenue losses from Covid.

    2. Use the money to reduce state taxes, mostly for the wealthy, thus getting a political advantage from a bill every single Republican voted against.

    3. Cut services becaus the stimulus money was used to fund tax cuts and not support government spending.

    4. Blame the Democrats for allowing state finance to suffer and making a state cut vital services like education, law enforcement, infrastucture etc.

    The bottom line of course is that if Ohio does not need the money it should simply refuse it, that would be the principled thing to do. But principles do not play well with Republican politics, do they?

    1. You seem to be missing a couple key points here: Not every state has actually suffered a loss in revenues that needs to be offset! Some states have even seen small increases in revenue. And the economy has largely recovered from last year’s (Self imposed; It was the lockdowns, not Covid, that caused the revenue drops, revenue came back when the lockdowns ended.)

      It varies from state to state.

      Ohio, for instance, saw a 0.9% drop in revenue last year, and their economy has recovered. Why do they need an additional 7 plus percent in spending?

      1. Maybe because people are still struggling despite macro-level indications? I mean this whole thing makes more sense if you consider people and their needs.

        1. Then why not give a state stimulus payment to the people?

          It’s hard to use onetime funds efficiently, it’s even harder to pump them into the economy fast enough to do anything when it’s needed.

          1. I support UBI, so I’d definitely be in favor of that. But, the state is a better distributor for certain things. I mean I can’t set up a fire station or build a road or a healthcare system on my own.

            1. Sure the state is better at those things, but I thought this was covid relief. What’s a new fire station in 2026 got to do with covid relief?

            2. Don’t be so modest.

            3. The states can’t just put the money directly into people’s pockets, however, because that would be a “tax cut” (according to the same logic that called the stimulus checks a tax cut), so the state has to actually spend the money on stuff the state is doing, not just throw it from helicopters.

        2. “Maybe because people are still struggling despite macro-level indications? I mean this whole thing makes more sense if you consider people and their needs.”

          I understand extended unemployment for people that we, as a society, have asked not to work – bartenders, for example. But why is someone whose income hasn’t been affected – people who are working from home, retirees, UPS drivers – struggling financially? Isn’t unemployment the most targeted way to make people whole, financially speaking?

          1. Well, we don’t know everyone’s situation do we? Hours cut, pay cut, rent raised, services that were needed are no longer needed and cost money. Maybe debt was taken out in the initial phases of lockdown before a more stable situation developed. Plus, missed work for childcare, missed work for having Covid, missed work for taking care of a family member with Covid. And other illnesses and disasters didn’t stop happening too. We had a rough winter with power outages, there was summer property destruction, etc.

            1. “Well, we don’t know everyone’s situation do we?”

              Indeed we don’t. To add to your list, some people have reduced commuting expenses. Some (UPS drivers!) are happily getting lots more overtime than they ever could. Some don’t need child care because they are working from home. Retirees aren’t affected, and so on.

              And the people that we most precisely know have been adversely affected, and by decisions we made for them, are the involuntarily unemployed. And, happily, we have existing infrastructure that is all set up to identify and send money to those people; every state has an existing unemployment system for which determining who used to be but is not now employed is all in a normal day’s work.

              Every dollar you send to people who are unaffected, like my wife and I[1], is a dollar that could have been spent on someone who actually was affected. And now those funds are gone, until the bonds that paid for them are paid off many years hence.

              [1]Not affected economically, that is. Like everyone else, we have friends who have died of covid, we terribly miss seeing friends and relatives, etc, etc. But mad money from Uncle Sugar doesn’t help with any of that.

              1. The point is that the metrics Brett uses are so reductive as to be useless, without more background.

                1. Well, using ‘you have a heartbeat’ as a proxy for ‘you need aid’ is pretty reductive as well..

                  I get the sense that LTG is a big fan of giving people money. Fair enough. But, sadly, there isn’t enough money to make us all rich; inevitably giving money to Tom means less for Betty.

                  Are the stories of prisoners serving life sentences getting checks true (I’ve seen headlines, but these days …)? If so, are they really the neediest people? I don’t think they are struggling to pay rent.

        3. But you’ve prevented the states from actually giving people more money under this policy.

      2. The point of this stimulus spending was to bail out blue states like IL, and only about 9% goes to COVID spending. That’s where the starting point of the analysis of it needs to be.

        The 1,400 per person was hush money.

        1. Hush money that is going to have a very meaningful and big impact on people’s lives. That’s rent and food and staving off homelessness or defaults on credit cards. Again. If you consider other people and their needs…this makes sense.

          1. Maybe we shouldn’t have shut the economy down, you know, like Sweden, and trash our economy in the first place? We are all ending up in the same place when it comes to death rates. I didn’t like it when Trump did it, and Biden is even stupider for not opening things up like FL or TX.

            And a president who cared about inflation, or creates a culture of dependency, cares about people’s needs. Don’t play the empathy card, it’s pretty much useless.

            BTW, I’ve got several friends who are milking this $ to avoid actually having to get a job again and go back to work. There are so many like that, as much as some poor waitress who needs it to cover the credit card debit. We could have put in a bigger amount for the Earned Income Tax Credit, and it would be less stupid.

            1. We dumped it straight into a contingency fund for anticipated home repair expenses. (Slab house, and the plumbing under the slab is aging out.) Won’t ‘stimulate’ the economy until our next plumbing leak.

      3. The economic hit was caused by the lockdowns which were a response to the pandemic. Had the lockdowns not slowed the movement of the virus, far more than half a million (and still counting) Americans would have died. The hospital system would have collapsed under the weight of the sick and folks with non-COVID issues would have started dying from lack of medical resources. That possible outcome is what drove the initial lockdowns but that outcome in and of itself would have created an economic problem had it come to pass.

        It’s difficult to make revenue if your employees or customers are too sick to engage in economic activity. And we have at least 537,000 dead customers nationwide as of today which will have its own impact.

      4. This is the kind of bad-faith, from-both-sides-of-the-mouth reasoning that has unfortunately become so common among the fascist legal-sphere. Only legislatures can set election rules! Not courts interpreting statutes or administrative agencies acting at legislature direction! A zeroed-out tax penalty is nonetheless essential to a comprehensive regulatory regime of which it is a part! And now, states with healthy enough budgets that they are thinking about cutting taxes are nonetheless so dependent upon federal largess that aid above some arbitrary threshold can only be provided without any strings attached!

        You will jump over, around, and through, just about any hoop necessary to reach your desired result. Or, in Josh’s case, to gain national notoriety as the slimiest lawyer since Dershowitz.

  12. “The bottom line of course is that if Ohio does not need the money it should simply refuse it, that would be the principled thing to do. But principles do not play well with Republican politics, do they?”

    Principle, you keep using that word, I do not think it means what you think it means.

    It is entirely consistent to oppose the $1.9 trillion spending but then, if it passes anyway, accept the funds. In the same way that it is consistent to support a tax increase but still claim all deductions allowed every year.

    The whole point of these things is that it is done collectively!

    In particular, the objection to the spending is that states that tried to save money and their economy got less, and that states that didn’t try to save but have large surpluses anyway (see California) get more. So the principled thing to do would be to reject the funding you are given, thereby increasing the difference in funding you based your opposition on?

    1. AC,
      All business is show business. Why do you think that any principles are involved.

  13. If the feds give states $ for one thing (for example, low-income housing), they can’t use it for another thing (for example, swimming pools in segregated neighborhoods).

  14. FWIW Josh’s much more respected and accomplished colleague from across town is dragging him for this bad take on the DOJ.

    https://mobile.twitter.com/steve_vladeck

  15. Why cut taxes?

    Some states may make the judgement that tax cuts are stimulative, for example targeted tax cuts to hard hit industries or workers. States could waive sales and entertainment taxes to encourage travel. Middle income taxes could be cut. There are dozens of ways tax cuts could encourage the economy to come back.

    Tax cuts may in some cases be more effective and more stimulative than direct spending.

    This tax mandate presumes states should make the policy choice to directly spend the money, for no clear reason, other than Congress said so. This is clearly a usurpation of state sovereignty. I doubt that this tax mandate stands.

    1. And if you are making the argument “tax cuts bad, direct spending good” – that is precisely the kind of policy argument Congress cannot force on states.

      1. See my comment below. Congress is not “forcing” and policy on the states. It is making receipt of federal funds conditioned on following federal policy.

        How is this different from Congress conditioning federal highway subsidies on adopting a particular speed limit. If a state disagrees, then don’t take the money.

        1. Roberts thought dangling this amount of money was coercive in NFIB v Sebelius. He’s still there, except now he is considered part of the “liberal” wing. What goes around comes around.

          1. Incorrect, NFIB was about taking away ALL Medicaid funding if states didn’t accept the Medicaid expansion. So the provision in the stimulus will stand because states can either accept new money or decline it just like with Obamacare.

            1. All medicaid funding to state revenues was about the same ratio as this stimulus to state revenues so its similarly coercive.

              This is a losing argument for the Biden admin on so many levels.

              1. No it isn’t…because the states were already receiving Medicaid funds that would have been forfeited had they refused the Medicaid expansion.

                And notice how the new Medicaid provisions in a new law had no impact on the constitutionality of preexisting Medicaid laws?? Looks like Texas v California is a loser too. But at least Kavanaugh and ACB stole the election for Trump…oh wait, they allowed Hunter Biden to steal the presidency from Trump!?! Lololol!!

                1. non sequitur. NFIB is on point, written by Roberts. Plus, there are 5 other justices to the right of Roberts. You may as well hope to win the Power Ball.

                  1. ACB and Kavanaugh are Bush loyalists like Roberts.

        2. “How is this different from Congress conditioning federal highway subsidies on adopting a particular speed limit”

          Because the dollar values involved make it coercive.

        3. Yeah, the South Dakota v. Dole was wrongly decided. NFIB is a good first step.

  16. I have to say I find this kind of Constitutional argument unconvincing. Congress can attach whatever conditions it wants with the money it spends. If the states don’t like it, then don’t take the money.

    Given that the states are free to refuse the money, I fail to see how it impinges on their sovereignty to attach conditions. True, states should be free to formulate their own policy. But so is the federal government through Congress. If Congress thinks that tax cuts right now are a bad idea, then it does not have to subsidize them, even indirectly.

    1. Bingo. The ACA was coercive because it threatened existing Medicaid funds if the states didn’t accept new funds to cover the Medicaid expansion.

      Also take not how an unconstitutional provision in a new law related to Medicaid didn’t make Medicaid unconstitutional?? And that the new provision was severable from the law it was actually a part of?? Sorry, Republicans…you can’t make constitutional laws unconstitutional by passing new laws that relate to the old law. So sadz. 🙁

    2. Nonsense. Dole lays out exactly what kinds of conditions make government conditions coercive. NFIB found values that were similar fractions of state total budgets to be coercive under the standards in Dole. Ergo, this is enough money that its impermissibly coercive, Dole and NFIB require that conclusion.

  17. “Yesterday, I noted that 21 State Attorneys General threatened to challenge the American Rescue Plan Act.”

    Any conservatives have the courage to check the positions of those 21 states on the list of states by educational attainment?

    Didn’t think so.

    Carry on, clingers. So far as a coalition of half-educated bigots, superstitious culture war casualties, and disaffected clingers can carry anything in modern America, that is.

    1. Still to afraid to return to the hit and run forum, so you layabout here shit posting.

    2. Did original thought ever figure in to your assertedly vastly superior education?

      Or were you taught that restating the same tripe ad nauseum somehow strengthens an argument.

      1. You may not like the correlation of substandard education (ignorance) and Republicans in our states, Bored Lawyer, but it is an important point.

  18. I don’t see why this is a big issue for the Biden administration. Wasn’t it the Senate that added this condition? If the condition gets stripped away by the courts, why should the White House care? Why do they even need to defend it in court? Let Joe Manchin defend it.

    1. Maybe, and I’m just spit-balling here, Biden actually cares about the average American citizen?

      Or, you could make arguments that our economic strength is an asset for national defense and projecting our strength globally.

      Or, you could make arguments that politically the Dems have seen a weakening of their standing with the average white blue collar worker and feel that this might woo them back.

      Or, and this is really crazy… it’s all three. Three solid reasons why Biden might care.

  19. The statement from the Treasury Department seems unambiguous to me. I see two potential problems with it: 1) does an unambiguous implementing regulation cure an ambiguous statute and 2) what happens if the state and the federal government disagree on the amount the tax cut reduced in revenue.

    On the former issue, Blackman summarily concluded, An agency cannot avoid a Pennhurst problem through Chevron deference. In other words, if the spending provision is ambiguous, the government cannot cure that separations of powers problem through guidance documents. But, he didn’t offer support for this claim.

    Additionally, since you only have to give back the amount of revenue lost by the tax cut, that ought to resolve any coercion issues.

    Finally, I had originally thought Yellen might hold that states could only cut taxes if they were able to do so without the stimulus money. But, that formulation relied on knowing what a state would have done without the stimulus money. The Treasury statement doesn’t suffer from that deficiency.

    1. How much money is actually lost by the tax cut? State tax revenues vary year to year even when there *isn’t* a tax policy change. If revenues go down, did the tax cut cause it? If tax revenues go up, would they have been higher without the tax cut? Or were they higher because of the tax cut? And what kind of timeframe are we measuring over? (Let’s not forget the Laffer curve – reducing tax rate can potentially increase government revenue, especially in the long term). Who decides the truth of these kinds of claims? And after how many years does the effect of the tax change get analyzed, and a determination get made?

      Keep in mind we’re measuring following a year which saw many state revenues fall from proceeding years because of the lockdowns.

      Even if you believe the law is unambiguous as a theoretical construct with assumed perfect information, there’s a lot of ambiguity in assessing what happened in reality. Bastiat’s argument of the seen and the unseen applies – we don’t have access to the alternate world where a different policy was pursued.

      I’d also note that the limitation prevents the state from doing things that are operate kind of like tax cuts, like putting money into people’s pockets directly.

      1. Although the law prohibits providing rebates, I think it permits direct income payments.

        1. Then why are we calling the Biden stimulus checks to individuals a ‘tax cut’? (I mean, I think it’s silly, but it’s not exactly a minority view in the media – everyone from Forbes to CNBC is spinning it that way – is what qualifies as a tax cut even ambiguous?)

  20. There is an overbreadth doctrine for the First Amendment, but I am not aware of one for the Spending Clause.

    It seems to me that the law is constitutional on its face because one could readily imagine cases where it would apply straightforwardly and unambiguously. If a state spent the money on an across-the-board tax cut rather than any of the stated federal purposes, I don’t see why Pennhuest would pose an obstacle.

    So I think the only kind of challenge potentially available is an as-applied challenge. And such a challenge needs to wait for an application. The administration needs to at least threaten to withhold some state’s funds over some actual tax cut made by the state.

    Otherwise, all we would have is an advisory opinion about hypotheticals.

    We have no reasonable assurance that Ohio or any state will actually pass a tax cut of any kind. It’s all speculation. There is a chilling effect concept in the First Amendment overbreadth doctrine. But there is no such concept in Spending Clause jurisprudence. Indeed, even if there was specific concrete legislation being contemplated, any claim that a state legislature feels chilled from passing such legislation would still be entirely speculative. The state’s legislature might pass the legislation anyway. Or it might not pass it for completely different reasons.

    1. Putting in other ords: I think Ohio’s and Professor Blackman’s error here is a smaller-scale version of their error in California v. Texas.

      States in general, and for that matter plaintiffs in general, don’t get to strike down an entire federal law because it contains some unconstitutional provision or application. They only get to have it held unconstitutional as to some specific provision or application.

      And when application is involved, the application has to have actually happened and be concrete. It doesn’t matter if there might be applications that might happen in the future.

      I think that if the federal government witheld a state’s entire funding allotment because it gave a small tax crdit to a business as part o say a development agreement, that would be unconstitutional. But whether such a credit will be given, or whether the federal government would take enforcement action if it was given, are all speculations about possible hyoothetical future events, speculations that lack the concreteness necessary for an Article III case or controversy.

  21. Cut the tax rate and predict an increase in revenue at some future date. Then blame Covid-24 when the projections are wrong.

  22. Got my here popcorn and going to watch liberals start crying foul about national injunctions and conservative activist Trump judges.

    1. I predict liberals will be devoting more attention to enlarging the Supreme Court, admitting new states, eliminating the filibuster, enlarging the circuit courts of appeals, enacting important legislation, installing judges, improving pandemic management, and continuing to win the culture war and improve American than they will be devoting to Trump judges or national injunctions.

  23. “This may be one of the greatest attempted invasions of state sovereignty by Congress in the history of our Republic.”

    Until next week…

  24. Love the implicit acknowledgment that this case has legs only in circuits that have become notorious for their bad-faith conservative activism. Seems about right.

  25. Good! I was hoping some entity would challenge this rescue bill that rescues nobody and nothing else either. Of course the courts will take their own sweet time letting the law suit work its way through the levels of the courts. I am absolutely certain there has to be several 10th Amendment violations in this monster of a very reckless spending bill. I hope this bill fails this constitutional test in total.

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