The American Bailout Act, signed into law by President Joe Biden on March 11, 2021, provided $19.5 billion in federal aid to communities with fewer than 50,000 residents.
Brady, Texas, with a population of 5,500, was offered $1.3 million. But he refused the money.
"Of course we could have used the money, but at what cost?" Sheila Hemphill, an activist and lobbyist for Brady, told Reason.
Brady was one of at least 243 small towns across the country to have rejected or returned federal stimulus support. Local residents feared that in exchange for the money, the government would have the right to audit how the funds were used. They also feared the money would allow the Biden administration to force people to comply with his executive order requiring vaccination of all employees at companies with more than 100 employees. Although the order was later overturned by the Supreme Court, it would not have had a major impact on Brady because his school district is the only organization in the city large enough to be affected.
For Brady residents, getting started was critical.
“Today we are talking about the vaccination mandate against COVID-19. But the big problem is that it's an executive order, which could be who knows what, because that's coming in one fell swoop," Hemphill said.
67 other cities in Texas followed suit. Among them was Mason, which has a population of 2,400 and turned down $570,000.
Mason City Commissioner Sue Pledger learned of the potential downsides of accepting stimulus funds from Hemphill. "The federal government has no right to come in and audit us, no right to our financial records," he told Reason. "We haven't signed a contract ... We're separated, and that's how we want to keep it here at Mason."
“We had very strong support in a very short time that we had made the right decision based on what it meant to represent citizens in this community. It meant paying back, staying sovereign, maintaining our independence, not giving the federal government a foothold in our finances or what we do with our contracts.
Mike Maharrey, national communications director for the Tenth Amendment Center, says the government has a long history of using federal money to expand its control over states. The anticomandancia doctrine gives Brady the right to refuse to enforce executive orders, but the stimulus funds give the federal government the power to say we can get the money back if you "don't enforce those various mandates and regulations." ". Maharrey said of reason.
At the national level, the federal government's share of each state's total revenue ranges from nearly half to a quarter, and that money usually comes with strings attached.
"Bribery is a very good term for what the federal government is doing," Maharrey says. "The only way to avoid the consequences of a bribe is to not accept the bribe."
He adds, "In many cases, you don't know exactly what those chains are going to be because the federal government is writing these contracts or agreements in a way that gives the federal government a lot of leeway to fit in with the policy after the fact that they want to set themselves up."
Maharrey says a system that empowers local government is the best of two evils. "I'm not someone who's all for decentralization because I think state and local governments are somehow better. They are just as bad as the federal government. But as with any system, a decentralized system will be better for the individual than a monopoly system... I'd rather deal with 50 different states than have everything, one size fits all, emanating from the federal government."
Produced and Edited by John Osterhoudt, Cinematography by Osterhoudt and Zach Weissmuller, Additional Graphics by Isaac Reese
