States Were Told They Can’t Use U.S. Covid-19 Aid to Cut Taxes. They Sued.
![US Treasury Department taxes, coronavirus relief bill, states](https://dev.allsides.com/sites/default/files/styles/news_large_image/public/im-324343.jpeg?itok=nHBbzPA9)
A last-minute provision added to the $1.9 trillion coronavirus relief package last month is leading to a showdown between states and the Treasury Department over the limits of the federal government’s fiscal authority.
The package, known as the American Rescue Plan, provided $195 billion for state governments to help offset soaring costs related to the pandemic and plug budget holes stemming from the economic downturn. Democrats added one important condition: States cannot use the money, directly or indirectly, to cut taxes.
Republican lawmakers and attorneys general argued the provision, which...