PHOENIX – Arizona’s Attorney General has joined a coalition of 12 states in filing a lawsuit against President Joe Biden’s administration over a massive expansion of federal regulations through executive order.
The lawsuit challenges President Biden’s Executive Order 13990, titled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” The states allege that the Biden Administration did not have the authority to issue binding numbers for the social costs of greenhouse gases to be used in federal regulations, and that the potential stringency of federal regulations that could come from this executive order will stifle manufacturing, harm agriculture, and have serious economic impacts across the country.
Two industries that will be impacted by President Biden’s executive order are manufacturing and agriculture. According to the Arizona Department of Agriculture, the agriculture industry provides $23.3 billion to Arizona’s economy, resulting in 138,000 jobs. Manufacturing is also a key sector and an economic driver in Arizona. In 2019, manufacturers in Arizona produced approximately $31 billion worth of economic output – accounting for 8.4% of the state’s total GDP, according to the U.S. Bureau of Economic Analysis. Additionally, the industry has seen strong job growth. As of 2019, there were 177,300 manufacturing jobs in Arizona.
The lawsuit notes that the President’s interagency working group place the social cost of carbon dioxide, methane, and nitrous oxide at approximately $9.5 trillion; $269 billion for carbon dioxide, $990 billion for methane, and $8.24 trillion for nitrous oxide (assuming similar rates of emission between 2019 and 2020 in the United States, and a discount rate of 3%).
The states argue in the lawsuit that using these interim values could massively expand the scope and reach of the regulatory power of the federal government, potentially impacting the United States’ economy and every household in America.
In arguing that President Biden’s administration did not have the authority to enact this executive order and that this action should be taken by Congress, the lawsuit points to several reasons, including that the executive order did not have statutory authorization to create the working group, nor did the working group have statutory authority to set values for the social costs of carbon, methane, and nitrous oxide that “shall be used by regulatory agencies administering statutes pursuant to statutory delegation of authority enacted by congress.”
Further, the lawsuit states that dictating binding values for the social costs of carbon, nitrous oxide, and methane is a legislative action “that the Constitution vests exclusively in Congress through the vesting clause of Article I, § 1 of the Constitution.” The President’s exercise of this legislative authority thus violates the separation of powers, the most fundamental bulwark of liberty.
The lawsuit also alleges that the working group violated the requirements of the Administrative Procedure Act. The lawsuit points to the fact that there was no public notice or opportunity for public comment before publishing interim estimates, and that the proper weight was not given to the positive benefits of “affordable and reliable domestic energy and agricultural production.”
In addition to Arizona, state attorneys general from Arkansas, Indiana, Kansas, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Tennessee, and Utah joined the suit.
America’s recent presidents have been all over the spectrum politically, but they shared one thing in common: near total indifference to our national debt.
George W. Bush wasn’t that interested in fiscal matters, not vetoing a single bill his first six years in office. He exerted little influence as the deficit started to climb. Barack Obama zealously pursued spend and borrow strategies. He affirmed the mindset of ignoring future implications.
Fiscal conservatives who hoped a Republican president could right the ship were crushed when Donald Trump announced the giant entitlement programs were safe from reform on his watch.
Now, Joe Biden, in a time of peace and prosperity, except for our self-inflicted Covid relief spending, has proposed a $6.1 trillion budget which includes authorization of almost $4 billion of borrowing in a single year. That’s enough debt, inflation adjusted, to finance the Revolutionary War, the Civil War, the Great Depression and both world wars combined (but not the Green New Deal).
Why do presidents matter? After all, appropriations bills must originate in the House and the president has no constitutional spending authority.
The reason is that most politicians, including many who won’t admit it, love spending money without having to raise taxes. Budget cutting is tough work and costs political support.
No matter how urgent the reductions or how indefensible the cause, the deprived party always raises a media-supported stink while the beneficiaries – the taxpayers of the future – are mute. Knowing that your “conservative“ leaders aren’t fully behind your cost cutting efforts stymies even the most stalwart legislators.
But the Biden administration is breaking new ground. They came into office with the virus on the wane, vaccinations becoming available through the prodigious efforts of their predecessors and the economy growing. Meanwhile the graph showing the growth of federal debt, now over 100% of GDP, resembles a hockey stick.
But they didn’t despair at the apparent lack of opportunity to spend now that they had the reins. The New Republic advised to “spend like crazy“ anyway and influential party leftists like AOC and Bernie agreed. So they created an imaginary crisis requiring $1.9 trillion more in Covid relief in addition to the $3.7 trillion already spent.
Pitching a crisis just now isn’t easy to do. The housing market is up 12%, manufacturing is at a five-year high, unemployment is falling and private sector GDP growth was 4.3% in the last quarter.
Still, they soldier on. But the “Covid relief” bill looks suspiciously like a Democrat wish list. There’s a $15 minimum wage mandate. Those who are still unable or unwilling to work get a $400 per week bonus employment benefit, which will make working a losing proposition for many. Schools get $130 billion, even though they have been mostly closed and unable to spend their previous allocation.
There’s $400 billion to bail out overly generous pension plan promises in big spending states. There’s pork galore. Art, farms, climate, bridges, you name it. About 4% of the funding goes to directly combating Covid.
Biden is determined to reward his political supporters. He preposterously insists that he learned the dangers of spending too little from the 2009 “shovel ready“ infrastructure debacle and won’t repeat that mistake. It’s not intuitively clear how, if they couldn’t constructively spend $830 billion, even more money to bungle would have helped. Still, spending for its own sake has become the de facto operating principle.
Republicans as usual are ramping up their anti-spending rhetoric now that Democrats are in charge. Democrats love to point out Republican past fiscal failures to justify their own reckless behavior.
But not one congressional Democrat has stood up to demand a stop to the madness. Groupthink is a powerful force. Surely some of them must be sane enough to recognize that we are on an unsustainable and highly dangerous path and that we are unconscionably victimizing our children and grandchildren.
It’s not rocket science. Yet the desire to be a good member of their tribe trumps all.
So this is how the new Bidenland works. There’s no longer any need for Covid economic relief and, if there were, this “rescue” bill wouldn’t provide it. We spend because we can.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
PHOENIX – On Wednesday, the House Ways and Means Committee approved legislation that revises Arizona tax structure for taxpayers and protects small business from over taxation by the federal government, without impacting the state general fund. The vote on HB 2838, sponsored by Rep. Joseph Chaplik, was divided along party lines.
In November 2020, the Internal Revenue Service issued guidance (Notice 2020-75) that pass-through entity businesses may claim deductions above the $10,000 State and Local Tax (SALT) cap. In response, at least seven states have imposed a new tax structure at the pass-through entity level permitting this deduction as intended by the federal government. Under HB 2838, Arizona would join those other states, providing small businesses significant potential tax savings.
“Small businesses are the backbone of the Arizona economy, and I will do everything in my power to protect them,” said Chaplik. “As Arizona businesses recover from an unprecedented economic downturn, I remain committed to providing them every opportunity to thrive in this challenging environment. HB 2838 frees up critical capital for business owners and doesn’t cost the state a dime in tax revenue.
“Republicans voted to help all businesses with tax relief without negatively impacting our state revenues. Democrats voted ‘no’ and are not willing to help their businesses in their districts,” claimed Chaplik.
All 31 members of the House Republican Caucus have signed their support for HB 2838. It will next be considered by the whole House.