EXCLUSIVE: A group of 45 House Republicans said on Thursday it is sending a letter to President Biden asking him to halt the implementation of a provision in the coronavirus stimulus bill that bars states from paying for tax cuts with the money they get through the law.
The House members contend in the letter, obtained by FOX Business, that the ban is an unconstitutional federal overreach that "effectively bans states from reducing their own taxes through 2024."
The letter, led by Rep. Dan Bishop, R-N.C., follows a lawsuit filed by 13 states seeking to have the provision declared unconstitutional.
"We urge you not to wait to be told by our courts that this abuse of state sovereignty cannot stand, but instead to stop implementation now to avoid the damage that will otherwise occur pending judgment," the letter says.
Treasury Secretary Janet Yellen says the law does not actually ban states from cutting their taxes – only from using money they get from it to pay for tax cuts.
"Nothing in the Act prevents States from enacting a broad variety of tax cuts," Yellen wrote last month. "It simply provides that funding received under the Act may not be used to offset a reduction in net tax revenue resulting from certain changes in state law."
Republican West Virginia Attorney General Patrick Morrisey, however, contends that the law is worded in a way that could be interpreted as a full ban on state tax cuts. It says that the funding cannot be used to "either directly or indirectly offset a reduction in the net tax revenue."
"This [lawsuit] ensures our citizens aren’t stuck with an unforeseen bill from the feds years from now," Morrisey said, saying that the word "indirectly" makes the law ambiguous.
"Beyond the abysmal policy implications, this provision is an unconstitutional abuse of power by your administration and Congressional Democrats and a violation of the rights of state governments in our federal system," the House Republicans say in their letter.
Congressional Republicans uniformly opposed Biden's coronavirus stimulus plan, citing a variety of reasons including the money that went toward state governments they said was not necessary. It passed through the House and Senate under a process called budget reconciliation which allows a bill to circumvent the Senate filibuster.
No Republicans voted for the $1.9 trillion bill, which Biden signed into law in mid-march.
"This historic legislation is about rebuilding the backbone of this country and giving the people of this nation, working people, the middle-class folks, people who built the country a fighting chance," Biden said at the time.
Fox Business' Megan Henney contributed to this report.