President Joe Biden’s pandemic relief bill included Democratic lawmakers’ language designed to prevent states from using the federal aid to subsidize tax cuts. But after Republicans protested, Biden’s Treasury Department said it will not aggressively enforce the provision - and now some GOP legislatures may be using the stimulus cash to finance tax cuts for the rich.
While some states, like Hawaii, Texas, and Nevada, that are reliant on tourism and the energy industries took blows to their revenue as a result of the pandemic, others have exceeded dire revenue projections from spring 2020 and now face budget surpluses in part thanks to the COVID-19 relief legislation signed by Biden in March.
But rather than investing in underfunded schools and public services, some Republican-run states are instead funneling the cash to high-income households - and the Biden administration’s refusal to enforce the anti-tax-cut language in the federal legislation are providing a green light for Republicans to try to do even more.
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