Offered Millions, Some Govs Just Say No

At least four reject some stimulus funds; Dems say they only hurt their states.

February 21, 2009, 8:19 PM

WASHINGTON, Feb. 21, 2009— -- The nation's governors descended on the capital this weekend to consider how to spend their share of the $787 billion economic stimulus and to lay the groundwork for more federal largess to come.

Nearly all the governors have been demanding help from Washington for months, and 46 states are facing budget shortfalls. Some have already been forced to lay off workers. So they need the money, but at least four Republican governors say they will turn at least some of it away.

Leading the critics was South Carolina Gov. Mark Sanford.

"The stimulus is a huge mistake," Sanford told ABC News, "a political promise that's been made but not paid for."

Sanford said he would reject unemployment insurance because of what he said were federal strings attached to it, and also said he would not take $42 million in funding for green buildings.

Like Sanford, Republican Gov. Haley Barbour of Mississippi said he would reject the federal unemployment extension money, which requires that states extend the benefits to workers laid off from part-time jobs.

"We will not be accepting unemployment insurance money because it requires us to have a significant tax increase in the future," Barbour told ABC. "Most states like Mississippi do not allow people to get unemployment compensation unless they are willing and able to take a full-time job."

Democratic Rep. James Clyburn, from Sanford's own state of South Carolina, has said that if the governor stands in the way, the state legislature will go around him to get the money, thanks to a provision Clyburn inserted in the stimulus that allows them to do so.

Clyburn has said that African-Americans would be disproportionately hurt by governors of southern states -- including South Carolina and Mississippi -- rejecting stimulus funds, because those states are part of the "black belt," but Sanford called the assertion "absurd."

Gov. Ed Rendell of Pennsylvania, the head of the National Governors Association, which sponsored the event this weekend, had a message for the gubernatorial critics.

"If you don't take that money on ideological grounds, the only ones you're hurting are the citizens of your state," Rendell told ABC News. "So suck it up, say you disagree but say that you're going to take it because it's going to be helpful to the citizens of your state."

That is what many republican governors are doing -- criticizing the nearly trillion-dollar economic rescue plan, and then taking the money.

"It's not really a stimulus bill, it's a big spending bill," Minnesota's Republican Gov. Tim Pawlenty told ABC. But he added, "We get back only 72 cents for every dollar we send to Washington, so we're going to accept the money."

In fact, the vast majority of the governors want even more. Rendell said the organization wants the federal government to spend $2.2 trillion, the amount the American Society of Civil Engineers says the nation's infrastructure needs, over the next decade.

In effect, for every dollar on that wish list, the $100 billion or so in the stimulus for infrastructure amounts to a nickel.

But for now, most governors -- including California Republican Gov. Arnold Schwarzenegger, who is struggling to lift California out of a $42 billion budget hole -- welcome the helping hand of Uncle Sam.

"Some people complain it's not a perfect thing, but what is perfect?" Schwarzenegger told ABC.

Despite all the criticism of the stimulus, Rendell said, he expects nearly all of the governors -- perhaps every one -- to accept nearly all of the stimulus money that is coming to their state.

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events