You might feel that leverage speeds up compounding. The problem is that leverage is more like compounding's hidden enemy: One million times zero equals zero.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 11
Within 72 hours of the October 1st government shutdown, the Trump administration weaponized federal funding against Democratic states with surgical precision. OMB Director Russell Vought froze $18 billion in New York City infrastructure for "unconstitutional DEI principles," cancelled $8 billion in climate funding across exactly 16 blue states (every one a state that voted for Kamala Harris), and sent compacts to nine universities demanding they protect "conservative ideas" in exchange for federal funding advantages.
The message was explicit: bend the knee on culture war issues, or watch your federal dollars disappear. Trump himself framed mass layoffs as targeting Democrats, posting that Republicans should use the shutdown to "clear out dead wood" while threatening permanent workforce reductions within "one to two days."
The Trump administration designed this as financial warfare to force compliance through economic pain. But they made a catastrophic miscalculation: the states they're targeting are the ones bankrolling the entire federal system.
New York sends the federal government $24 billion more each year than it receives back. Connecticut, New Jersey, and Massachusetts together contribute another $40 billion surplus. These same states now face federal freezes on programs Congress has already funded. The money exists and Congress appropriated it. The executive branch simply refuses to release it.
Courts can issue orders, but court orders are just paper without enforcement mechanisms. States need leverage, not just legal arguments.
The anti-commandeering doctrine, confirmed in Printz v. United States, holds that the federal government cannot force states to administer federal programs. This means States participate in exchange for federal funding. When that funding stops illegally, the basis for cooperation disappears.
1. Hold Federal Tax Payments in Escrow
States and cities process billions in federal tax payments from their employees. These payments flow to Washington automatically, but automatic is not mandatory. States could hold these funds until the federal government certifies it has met its own obligations. No constitutional provision requires states to immediately forward federal taxes while waiting months for entitled federal payments. Make this an interstate compact for even more power.
2. Charge Federal Facilities Market Rates for Everything
Every military base and federal building depends on state-funded infrastructure. Roads, snow removal, emergency services. States have traditionally absorbed these costs. Tradition is not law. When a military base calls for emergency services, bill them at market rates. The Pentagon's budget assumes free state services. That assumption is optional.
3. Apply Federal Standards to Federal Payments
When states request entitled funds, they face months of documentation requirements and delays. States can apply the same standards to federal tax transfers. Every payment can require comprehensive documentation, multi-level review, and accuracy verification. If processing a federal grant takes 18 months, processing federal tax transfers can take 18 months too.
4. Form an Interstate Compact for Fiscal Fairness
The Constitution allows interstate compacts, though Congress must approve those affecting federal power. Donor states can achieve the same result through coordinated state legislation without requiring a formal compact. New York, Connecticut, New Jersey, California, and Massachusetts passing identical escrow laws on the same day creates collective leverage without needing Congressional permission.
These states could establish uniform procedures for federal payment processing during funding disputes. When the federal government withholds congressionally appropriated funds, coordinated states simultaneously implement reciprocal delays. Individual states invite retaliation. Ten states acting together change the conversation.
5. Convert Every State Service to Fee-for-Service
Road maintenance to federal facilities? Calculate actual costs per mile. Water and sewer connections to federal buildings? Full municipal rates, no subsidies. State police responding to federal property? Invoice for each call. Environmental monitoring around military bases? Hourly billing for state inspectors. The federal government assumes these services are free. They're subsidized and subsidies can end.
These strategies will face constitutional challenges, particularly regarding the Supremacy Clause. But the Supremacy Clause only protects lawful federal action. Withholding congressionally appropriated funds violates the Appropriations Clause and the Impoundment Control Act. States enforcing reciprocal standards are defending the rule of law, not defying it.
Christopher Armitage
No. of Recommendations: 1
Hold Federal Tax Payments in Escrow
States and cities process billions in federal tax payments from their employees. These payments flow to Washington automatically, but automatic is not mandatory. States could hold these funds until the federal government certifies it has met its own obligations. No constitutional provision requires states to immediately forward federal taxes while waiting months for entitled federal payments. Make this an interstate compact for even more power.
Oh, please do this one.
PLEASE.
Better yet, outright refuse to pay! That'll show 'em.
No. of Recommendations: 10
Better yet, outright refuse to pay!
That would be as illegal as Trump impounding funds already approved for disbursement by Congress.
That’s why Blue States won’t do that.
But I can see that the line between legal and illegal has already been erased for you, so I can understand why you would think that’s an option.
No. of Recommendations: 4
But I can see that the line between legal and illegal has already been erased for you, so I can understand why you would think that’s an option.
You're the one talking about an interstate conspiracy to commit tax evasion and potentially defraud the US Government, not me, so I'm not sure how all of a sudden you need to go there.
At any rate. Since democrats and blue states love the IRS and cheered when Biden hired 80,000 more of them...let them experience full IRS customer service!
Lube up before you do.
No. of Recommendations: 5
You're the one talking about an interstate conspiracy to commit tax evasion and potentially defraud the US Government, not me, so I'm not sure how all of a sudden you need to go there.
You might wish to read beyond the point in Armitage’s article where you gave up.
There’s precedent for what he’s suggesting.
Beginning with Northern states refusing to enforce Fugitive Slave Act
No. of Recommendations: 3
You might wish to read beyond the point in Armitage’s article where you gave up.
There’s precedent for what he’s suggesting.
Beginning with Northern states refusing to enforce Fugitive Slave Act
LOL. Sure.
Here's the thing you're forgetting: many blue states are - thanks to profligate democrat spending with zero appetite for restraint - almost broke. When the IRS slaps them with daily fines - well within their power - they'll cave.
No. of Recommendations: 0
You're the one talking about an interstate conspiracy to commit tax evasion and potentially defraud the US Government
Nope once again. Slow-walking paperwork is legal--otherwise Spankee and his fraudsters couldn't do it.
PLUS, states have the *legal authority* to be sure the amounts to be paid are factually correct. Otherwise, you publicly acknowledge the ongoing criminal frauds by Republican'ts and the urgent need to lock them up ASAP. After all, you HAVE publicly admitted they committed ongoing criminal frauds. LOCK THEM UP !!!
What? YOU DON'T LIKE THAT? LOL !!!
No. of Recommendations: 1
You're the one talking about an interstate conspiracy to commit tax evasion and potentially defraud the US Government
It isn't tax evasion, and, AFAIK, withholding is paid directly to the IRS by Individuals and Corporations.
No. of Recommendations: 3
It isn't tax evasion, and, AFAIK, withholding is paid directly to the IRS by Individuals and Corporations
Not in the case of state employees. State withholds taxes, then sends to feds.
No. of Recommendations: 7
Blue States need to stop worrying about making sure people have healthcare and children have food
and start worrying about the real issues like bailing out Argentina and boycotting Cracker Barrel because their new logo is too woke!
