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The $350 billion in state and local aid included in Democrats’ $1.9 trillion Covid relief package is proving to be another point of contention, even among Democrats. Several Democratic senators have reportedly pushed for changes to that portion of the legislation, fueled in part by concerns that states could respond to an infusion of more federal aid by cutting taxes instead of devoting the additional funding to pandemic-related needs.
“We could distribute billions to the states, and they turn around and lower taxes — there are governors talking about that, and it’s not the point here … there should be a prohibition against voluntarily diminishing revenues,” Sen. Angus King (I-Maine), who caucuses with the Democrats, told The Washington Post last week.