From President Biden’s first day in office, when he sent his American Rescue Plan Act to Congress, until March 11, when he signed the $1.9 trillion economic relief package into law, his top officials and allies on the Hill were laser-focused on keeping the Democrats’ slim majorities on board. But they paid less attention to one potential source of danger: the need to screen out provisions that, after enactment, could give right-wing judges openings to shred Biden’s blockbuster reform—just as, a decade earlier, hostile judges nearly managed to shred his predecessor’s signature accomplishment, the Affordable Care Act.
Days before final passage, Senator Joe Manchin of West Virginia—the moderate Democrat who wields disproportionate power over the party’s legislative agenda—pushed for an amendment that bars states that accept relief funds to use them to “either directly or indirectly offset a reduction in the net tax revenue.” Manchin’s purpose was unobjectionable. “How in the world,” he explained, “would you cut your revenue during a pandemic and still need dollars?” But the language used to implement this sensible idea should have triggered alarm, especially given the Supreme Court’s 2012 decision on Obamacare. While Chief Justice John Roberts sided with the court’s liberal wing to largely uphold the law, he imposed new limits on congressional power to tie strings to funding grants to states—limits that could jeopardize the Manchin amendment’s broadly phrased ban on “indirect” tax cuts. Evidently, no one spotted that legal red flag when the amendment was vetted and adopted.
Republican state attorneys didn’t wait to pounce. Days after the bill’s passage, 24 conservative attorneys general—led by those in Arizona, Georgia, and Manchin’s own state of West Virginia—signed a letter to Treasury Secretary Janet Yellen demanding, in essence, that her department interpret the tax-offset provision to preclude only “express” use of relief funds for “direct” tax cuts—thus reading out of the law its prohibition on “indirect” offsetting tax cuts. The letter threatened “appropriate action”—a lawsuit—if Treasury did not provide a satisfactory response. A day later, Ohio’s Republican attorney general, Dave Yost, filed suit on behalf of his state, seeking to preliminarily enjoin the “tax mandate”; the case will be heard by Trump-appointed Judge Douglas Cole, himself a former Ohio attorney general with robust Federalist Society credentials. Arizona Attorney General Mark Brnovich later filed a similar complaint in the federal district court located in Phoenix.