A federal judge ruled that a provision in President Biden’s $1.9 trillion coronavirus relief law limiting states from cutting taxes is unconstitutional.
U.S. District Judge Douglas Cole issued the permanent injunction requested by Ohio Attorney General Dave Yost, a Republican who argued the administration was trying to impose a “tax mandate” on states.
“The Biden administration reached too far, seized too much and got its hand slapped,” Mr. Yost said. “This is a monumental win for the preservation of the U.S. Constitution — the separation of powers is real, and it exists for a reason.”
Mr. Yost had filed a lawsuit against the Treasury Department and Treasury Secretary Janet Yellen, saying that the provision in the Democrats’ $1.9 trillion “American Rescue Plan” barring states from using the federal aid to offset tax cuts “directly or indirectly” is unconstitutional.
The judge ruled on Thursday that the tax mandate “falls short of the clarity” that Supreme Court precedent requires for the Constitution’s spending clause covering grants to states. He disagreed with Ms. Yellen’s argument that Treasury regulations clarified the question.
“The Tax Mandate exceeds Congress’s power under the Constitution,” Judge Cole wrote.
Mr. Yost tweeted, “The federal government needs to stay in its lane. If they don’t … we’re going to bump them up against the wall and keep them where they belong!”
The administration is expected to appeal the ruling.
Several other states have joined another federal lawsuit challenging the tax mandate.