With the signing of the Democrats’ expansive $1.9 trillion COVID-19 relief bill, they did something they were unable to achieve on Election Day: Control all 50 state legislatures. Putting those legislatures under the direct control of Congress violates the Supreme Court’s anti-commandeering doctrine. But they did it anyway.
For Utah, where Democrats represent a small minority of state legislators, we are now expected to essentially let national Democrats write our tax policy for us. And their priority is not economic growth or prosperity for Utah. It’s growing government.
The COVID-19 aid can’t be used to stimulate the economy. It must be used to grow government. That’s the deal. The bill explicitly prohibits states from implementing more competitive tax policies that (coincidentally) draw businesses away from high-tax blue states.
Using vague and expansive language, the policy prohibits states from implementing tax cuts until 2024 if they want to receive any of the COVID-19 relief. So it not only sets Utah’s tax policy for us, but it ties our hands for the remainder of the Biden administration.
Depending on how the administration chooses to enforce the provision, the bill may also impact state-led school choice policies. It could be enforced to prohibit states from implementing tax credit programs, coincidentally helping the teachers unions who donate lavishly to Democratic campaign coffers.
Some analysts suggest the bill may preclude states from shoring up state-level unemployment insurance trust funds that have been drawn down by pandemic-induced job losses. What it can do is replenish operating expenses that states repurpose to bail out their pension programs, benefitting public sector labor unions. These back-door pension bailouts are intended to mute criticism that direct bailouts would have rightly invoked.
For Utah, the inaptly named “American Rescue Plan” attempts to coerce us into reversing tax policy passed earlier this year to stimulate our economy. The cost of resisting Democrats’ ban on tax cuts? $100 million in COVID-19 aid.
For Utah and many other states, this is a direct rejection of local elections and voters.
In this country today, 61 legislative chambers are Republican-controlled, with just 37 controlled by Democrats (one chamber has shared power). In 38 states, a single party holds the trifecta of the governorship and both legislative chambers. Just 15 trifecta states are held by Democrats compared to 23 held by Republicans, including Utah.
Yet blue state Democrats in Congress now want to use their majority to usurp the power of locally elected legislatures in red states. This is important because many of the blue states from which these Democrats come have spent recklessly on unfunded pension promises and expansive government programs. It’s getting harder for them to compete with small government, low-tax red states who are increasingly luring businesses and high-income bracket taxpayers away.
The bill has been coming due in many blue states for decades of unrealistic promises and spending. Now, Democrats in Washington are bailing them out under the guise of “COVID relief.” And states with smaller government and lower spending cannot reap the prosperity of those policies. Instead, the bill rewards wasteful spending and incentivizes more of it.
The Wall Street Journal called this “a sneak attack against conservative states,” and “an egregious affront to constitutional federalism.”
Once we open this door, we may never be able to close it. If a 50-50 split in the Senate and less than a 10-vote majority in the House can overrule the power of 50 state legislatures, the American people will no longer have a meaningful voice in their own governance.