Arizona Governor Sues Biden Administration Over Attempt to Wrest Back Federal Funds

Arizona Gov. Doug Ducey speaks at the Arizona Capitol in Phoenix, Ariz., on Jan. 10, 2022. Ross D. Franklin/AP Photo

Arizona’s governor on Friday sued President Joe Biden’s administration, asserting its attempt to take back federal money from certain states was not authorized by Congress.

The U.S. Treasury Department recently threatened to wrest the funds from Arizona because state officials have made distribution of the money contingent on not requiring masks.

Failure to change the rules may result in the Treasury moving to recoup the funds and withhold future funds, an official said in a letter to Ducey’s office last week.

But Congress, which authorized the funding with the American Rescue Plan Act of 2021 (pdf), gave states “broad latitude to choose whether and how to” use the money “to respond to and address the negative impact” of COVID-19, Ducey’s 24-page lawsuit says.

The creation of two grant programs to distribute the money follows the text of the act, the governor asserts.

The programs address “the long-term, negative economic impacts on disadvantaged communities from school closures and overbearing mask mandates” and “empower parents and students to exercise their freedom to make informed decisions regarding their health and educational needs,” the suit states.

The Treasury earlier this month issued a final rule (pdf) for the $350 billion in funds that barred states and other recipients of the money from imposing terms or conditions “that undermine efforts to stop the spread of COVID-19.”

No such requirement was included in the act, though it did say the treasury secretary could “issue such regulations as may be necessary or appropriate to carry out” the law.

Treasury Secretary Janet Yellen speaks to a conference in Washington on Jan. 19, 2022. Nicholas Kamm/AFP via Getty Images

The threat to take back the funding and withhold the next tranche of funds exceeds the statutory authority granted to the Treasury by Congress, lawyers for Ducey’s office said in the filing, which was lodged in federal district court in Arizona.

The court was asked to declare the final rule invalid and enjoin its planned actions.

“The Biden administration is attempting to hold Congressionally-appropriated funds hostage and is trying to bully Arizona into complying with this power-grabbing move,” Ducey said during an appearance on Fox News. “They’re going after education programs that are designed to help kids access in-person instruction, ensure schools stay open and give parents the ability to make decisions that are best for their kids.”

“Treasury believes the rule is correct and allowed by the statute and Constitution,” a spokesperson for the agency told The Epoch Times in an email on Saturday.

The suit came after four members of Congress representing Arizona urged Treasury Secretary Janet Yellen to rescind her department’s threat.

The programs in question “are well within Arizona’s scope to provide citizens and entities the resources they need,” Reps. Paul Gosar (R-Ariz.), David Schweikert (R-Ariz.), Debbie Lesko (R-Ariz.), and Andy Biggs (R-Ariz.) wrote (pdf).