Judge John Wilson analyzes the “American Rescue Plan.”
In March of 2021, President Joe Biden signed a $1.9 Trillion economic stimulus bill, called the American Rescue Plan Act (the ARPA). This legislation provided for $656.18 Billion in “Direct Financial Assistance,” of which $402.2 Billion took the form of $1400 stimulus checks; $40.16 Billion for Transportation, of which $1.7 Billion was given to Amtrak alone; $362 Billion for “State and Local Fiscal Recovery Plans,” of which $219.8 Billion was allocated to states and $130.2 Billion earmarked for cities and counties, “based on each county’s share of US population”; and $56.27 Billion for “Assistance to Individuals and Families,” which represented an enormous expansion of the welfare state, providing for $5 Billion in “Tenant Based Rental Assistance,” another $5 Billion in “Homelessness Assistance,” $21.6 Billion in “Emergency Rental Assistance,” $150 Million for something called “Maternal, Infant and Early Childhood Home Visiting” and $37 Million for the “Commodity Supplemental Food Program,” which claims to “improve the health of low-income persons at least 60 years of age by supplementing their diets with nutritious USDA foods.” .
Many of these are clearly the usual “Great Society” social programs that have been unsuccessfully fighting the “war on poverty” for the last 50 years. Others are clearly payoffs to Democrat controlled counties and states (a review of the most populous counties and cities will include places like New York, Chicago and Los Angeles at the head of the list). Others, like any funding for Amtrak, are just a waste of taxpayer funds.
But some of these giveaways are discriminatory, and patently unconstitutional.
One provision which faces an immediate challenge provides states with $200 billion in financial aid. However, under Section 602(c)(2)(A) of the ARPA, states cannot use these funds to finance a reduction in their state taxes. “The intent was clear: to prevent Republican states from using the funds to offset tax cuts.”
Shortly after the Act was signed into law, 21 Attorney Generals from states including Georgia, Arizona and West Virginia wrote to Treasury Secretary Janet Yellen, asking “that the Department of the Treasury take immediate action to confirm that certain provisions of the American Rescue Plan Act (the “Act”) do not attempt to strip States of their core sovereign authority to enact and implement basic tax policy…(the relevant) language could be read to deny States the ability to cut taxes in any manner whatsoever…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.”
Not bothering to join the other Attorney Generals, Ohio forged ahead with a lawsuit of their own. “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. Steward Mach. Co. v. Davis, 301 U.S. 548, 587 (1937).”
At last count, 13 states have joined into a separate lawsuit filed in the US District Court in Alabama to challenge the Tax Mandate, including Utah, Alabama, Florida, South Dakota, and Alaska.
As described by Josh Blackman in Reason, “(s)omeone 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…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.”
While the rest of the American Rescue Plan might survive the severance of the unconstitutional Tax Mandate from the balance of the bill, there is a more fundamental issue which may spell doom for the majority of the bill. At heart, the bill is discriminatory, providing for the distribution of its funds on the impermissible basis of race.
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In response to these regulations, “The Texas Public Policy Foundation and America First Policy Institute have sued the U.S. Small Business Administration… Greer’s Ranch Café vs Guzman was filed against the SBA and its acting director, Isabella Casillas Guzman, in the U.S. District Court for the Northern District of Texas… ‘These race and sex preferences are patently unconstitutional, and the Court should promptly enjoin their enforcement,’ the complaint states. ‘Doing so will promote equal rights under the law for all American citizens and promote efforts to stop racial discrimination.”’
Quoting further from the lawsuit: “SBA is currently disbursing funds on a first-come, first-serve basis, but only to ‘priority’ applicants, having pushed all disfavored applicants—mostly white males—to the back of the line, regardless of when they applied… In enacting this program, Congress did something it has never done in the modern era. It created a huge government program in which the great majority of the funds will be made available on the basis of race and gender. All (or almost all) racial minorities who are not veterans are preferred to all (or almost all) white males who are not veterans. The priority is dispositive: no one who does not enjoy a priority will get a dime.”
Even more blatantly discriminatory is the Emergency Relief for Farmers of Color Act, which provides for $5 Billion “to provide assistance for socially disadvantaged farmers and ranchers and socially disadvantaged groups,” by directing the Secretary of Agriculture to “forgive the obligation of each socially disadvantaged farmer or rancher who is a borrower of a farm loan made by the Secretary to repay the principal and interest outstanding as of the date of enactment of this Act on the farm loan” as well as “pay to each lender of farm loans guaranteed by the Secretary an amount equal to the principal and interest outstanding as of the date of enactment of this Act on all farm loans held by the lender, the borrowers of which are socially disadvantaged farmers and ranchers.”
Under 7 USC Sec 2279(5) and (6), a “socially disadvantaged farmer or rancher” is defined as a member of ” a group whose members have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities.”
It didn’t take long for this law to be challenged. “An organization led by former Trump White House adviser Stephen Miller is suing the Agriculture Department over the definition of socially disadvantaged farmers and ranchers that Congress used to create a $4 billion debt relief plan for minority farmers…(t)he lawsuit challenges Sections 1005 and 1006 of the pandemic relief law as unconstitutional…America First Legal is providing the lawyer for the plaintiff, Texas Agriculture Commissioner Sid Miller, who is acting in his capacity as a farmer and rancher.”
Further, “Scott Wynn from Jennings — about 90 minutes west of Jacksonville in Hamilton County (Florida) — sued U.S. Agriculture Secretary Tom Vilsack in Jacksonville federal court Tuesday over a loan-forgiveness program that was folded into the $1.9 trillion American Rescue Plan. The lawsuit says the program for ‘socially disadvantaged’ farmers uses race as a standard for getting financial help, whether the farmer who’s applying is financially strained or not.”
And that’s not all; “The Wisconsin Institute for Law and Liberty last week filed a lawsuit in federal court challenging the alleged race discrimination in the American Rescue Plan. Specifically, the organization targets a provision to offer loan forgiveness based on racial categories. The organization filed the lawsuit Thursday on behalf of five plaintiffs from Wisconsin, Minnesota, South Dakota, and Ohio.”
Let us give the last word on this topic to former New York Lieutenant Governor Betsy McCaughly; “Most Americans oppose racial preferences, though Democratic politicians push them. Voters in California and Washington state, two of the bluest states, recently rejected ballot measures for affirmative action. The public agrees with Chief Justice John Roberts that ‘the way to stop discrimination on the basis of race is to stop discriminating on the basis of race’… (f)or now, the battle to defeat the anti-white provisions of Biden’s American Rescue Plan will be fought in court. Fortunately, that’s where the Constitution still matters.”
Illustration: Pixabay