LOGAN – While some are hailing President Joe Biden’s $1.9 trillion “American Rescue Plan” as a much-needed economic stimulus, state Rep. Dan Johnson, R-District 4, calls the spending package a “gut-punch” for properly-managed states like Utah.
“To a state like Utah, that balances its budget and spends pretty darn wisely, (this stimulus plan) is terrible,” Johnson said during a GOP virtual town hall on Thursday, just hours after Biden signed the budget-busting bailout legislation.
Democrats in Congress emphasize that the so-called “American Rescue Plan” includes another round of direct payments to American families, increases the tax credit for dependent children and extends supplemental unemployment benefits.
But Republicans counter that less than 10 percent of the $1.9 trillion price tag for Biden’s plan will be allocated to COVID-19 health care expenses and only 1 percent will go to vaccine distribution. And billions of dollars will go to bailouts for labor unions, schools and governments at state and local levels.
Utah’s entire congressional delegation voted against the Biden plan in both the U.S. House of Representatives and the Senate. They argued that additional economic stimulus may not even be necessary given that more than a quarter of the $4 trillion in funding authorized by the previous CARES Act remains unspent.
Fiscal analysts from the Kem C. Gardner Institute at the University of Utah estimate that Utah may receive up to $8 billion from the stimulus package. About half of that amount will come in the form of direct payments of $1,400 to individual Utahns in more than 80 percent of statewide households. Local governments throughout Utah are also in line to receive about $1 billion and the remainder will be allocated to the state in one form or another.
In a recent video town hall, Sen. Mike Lee, R-Utah, emphasized that funding for Utah will be a fraction of that allocated to more populous states controlled by Democrats.
Of a total of $350 billion in the stimulus plan, figures released by the House Oversight Committee indicate that more than $195 billion will go to the states, $130 billion is allocated to assist local governments, about $20 billion is earmarked for Native-American tribal governments and another $4.5 will go to U.S. territories.
As if to confirm Lee’s accusation, the state of California will receive $42 billion under Biden’s plan. While city and county governments will receive about a third of that amount, $26 billion will still be available to make a dent in California’s whopping $3.7 trillion state deficit.
While liberal New York is also in line to receive more than $23 billion in stimulus funds, not all the states benefiting most from the “American Rescue Plan” are blue. The state of Texas will receive $27 billion and Florida will receive more than $17 billion.
But congressional Republicans still argue that the distribution of those funds, which is based on unemployment statistics, unfairly benefits states that damaged their own economies with extended business lockdowns during the worst of the coronavirus pandemic.
U.S. Rep. Blake Moore, R-District 1, joined Lee in criticizing the stimulus plan, noting that it was packed with money for liberal priorities, including bailouts for mismanaged union pension plans and taxpayer-funded abortions.
Johnson said that even the much smaller amount of stimulus funding coming to Utah has strings attached. One of those conditions buried in the “fine print” of the “American Rescue Act” is a stipulation that prohibits states from using its funds to provide tax relief to their citizens.
“That’s a gut-punch,” Johnson said, referring to the stipulation prohibiting tax relief. “I don’t even know if it’s constitutional to do that. But I kind of think that (Democrats in Congress) think they can do whatever they want.
“I think this (stimulus plan) is a wrong approach,” he added. “It’s mostly intended to protect people in some states who have made mistakes with funding and spending over the years.”