The Arizona governor on Friday sued the administration of President Joe Biden, alleging that its attempt to return federal money from some states was not authorized by Congress.
The US Treasury Department recently threatened to take funds from Arizona because state officials made the distribution of money contingent on not requiring masks.
Failure to change the rules could result in the Treasury attempting to refund funds and withhold funds in the future, the official said in a letter to Ducey’s office last week.
But Congress, which authorized funding under the American Plan of Rescue Act of 2021 (pdf), has given states “broad discretion over whether and how” the money should be used “to respond to and address the negative impact” of COVID-19, Ducey About It says the 24-page lawsuit.
The creation of two grant programs to distribute money follows the text of the law, the governor said.
The programs address “the long-term negative economic impact on disadvantaged communities due to school closures and government mask-wearing orders” and “provide parents and students the opportunity to use their freedom to make informed decisions about their medical and educational needs,” the lawsuit says. .
Earlier this month, the Treasury released a final rule (pdf) for $350 billion in funds that prohibits states and other money recipients from imposing conditions “undermining efforts to stop the spread of COVID-19.”
The law did not include such a requirement, although it did state that the Secretary of the Treasury could “make such regulations as may be necessary or appropriate for the execution” of the law.
The threat to withdraw funding and withhold the next tranche of funds exceeds the legal authority granted to the Treasury Department by Congress, lawyers for Ducey’s office said in a lawsuit filed in federal district court in Arizona.
The court was asked to invalidate the final rule and impose a ban on the planned actions.
“The Biden administration is trying to hold hostage funds appropriated by Congress and is trying to get Arizona to do this power grab move,” Ducey said during an appearance on Fox News. “They are committed to educational programs that are designed to help children access face-to-face learning, ensure schools remain open, and empower parents to make decisions that are best for their children.”
The lawsuit was filed after four members of Congress representing Arizona urged Treasury Secretary Janet Yellen to reverse her ministry’s threat.
The programs in question are “entirely within Arizona’s purview to provide citizens and organizations with the resources they need,” said Representatives Paul Gosar (R-Arizona), David Schweikert (R-Arizona), Debbie Lesko (R-Arizona), and Andy Biggs (R-Arizona). Republic of Arizona) wrote (pdf).
The Treasury did not respond to a request for comment.
“The Ministry of Finance believes that this rule is correct and permitted by law and the Constitution,” a spokesman for the agency said after filing the lawsuit.