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They're Saying No to the Cash, but Talk Is Cheap

By Christopher Beam
Sunday, March 15, 2009

Republican governors are sure that they don't want to spend stimulus money. They just can't agree which parts to reject. Or whether they're allowed to. Or why.

Gov. Mark Sanford of South Carolina announced last week that he wants to redirect $700 million that would be going toward education and health care and use it to pay down the state's debt.

Meanwhile, Gov. Rick Perry of Texas announced last Thursday that he will be rejecting the $555 million of Texas' stimulus funds directed to unemployment insurance. Perry's rationale: He doesn't want to increase the burden on businesses to fill the hole once federal funds dry up. Gov. Bobby Jindal of Louisiana voiced similar concerns a few weeks ago.

Each governor's stance raises its own questions. But the one that applies to every Republican governor is this: Why not reject the whole thing? What makes these particular packets of money so much worse than the rest?

For Perry, the answer is simple: I reserve the right to reject more money later. But this money for unemployment insurance is so bad, I had to act fast. The governor is currently going through the remaining allocations "line by line," says spokeswoman Katherine Cesinger. "I would stay tuned," she adds.

For Sanford, it's a little more complicated. Seven hundred million dollars is only 10 percent of the stimulus money allocated to South Carolina, and a small fraction of the state's likely budget shortfall. It's also not qualitatively different from the rest of the state's money. The $700 million isn't a blank check -- it goes toward K-12 education, higher ed, and Medicaid as part of the state's "stabilization funds." How does that hurt taxpayers any more than fixing roads or distributing food stamps or any of the other services South Carolina desperately needs?

Sanford says he would reject or redirect the rest of the money but can't. His "hands are tied," he wrote in a letter to state legislators. When asked to explain, his communications director said that the governor has discretion over only the stabilization funds, not the rest of the $8 billion allocated to South Carolina.

Yet Perry just rejected a chunk of change that has nothing to do with stabilization funds. Moreover, the federal legislation states that the governor has first dibs on all the money: "If funds provided to any State in any division of this Act are not accepted for use by the Governor, then acceptance by the State legislature, by means of the adoption of a concurrent resolution, shall be sufficient to provide funding to such State." Sanford's spokesman, Joel Sawyer, insisted that this passage refers only to stabilization money, i.e., the $700 million Sanford has asked to be redirected.

But the words "in any division of this Act" suggest that he has discretion over every dollar. Or, at the very least, that he can instruct his appointees at Health and Human Services or Social Services to reject the money. Not so, says Sawyer. "If you go through the rest of the bill, it speaks to a very specific certification process," he told me. "We spent three weeks looking at it, and we're pretty sure we're correct."

Whatever the truth, this puts Sanford in a convenient position. He not only gets to dramatically redirect a portion of the money -- which has been reported all over as "rejecting" the money and which either the White House or the South Carolina state legislature will probably override -- but he can also claim that he would reject the entire monstrosity, if only he could. This pretense that he opposes every dollar in the stimulus package -- much of which comes in the form of tax cuts -- allows him to engage in some clever reductio ad Zimbabweum. "What you're doing is buying into the notion that if we just print some more money that we don't have, send it to different states, we'll create jobs," he said Wednesday. "If that's the case, why isn't Zimbabwe a rich place?"

That said, Sanford is in good company. When it comes to the stimulus, no one has been willing to jump in or out with both feet. In the original draft of the American Recovery and Reinvestment Act, Obama included just enough tax cuts so that he wouldn't get painted as a lefty. In the Senate version, the axis of Republican Sens. Snowe-Collins-Specter negotiated just enough cuts so that they would get pegged as responsible moderates, but not in any ideologically consistent way. Now Sanford requests that just enough funds get redirected so that he can claim conservative bona fides -- but not so much that he'll be stiffing his own constituents.

Other governors may follow his lead. But if they do, like Perry, they could put Sanford in an awkward position: They would agree with what he's doing in general, but not in particular. And that would force him to defend his rationale for redirecting this specific portion of the money. All politics is local, and apparently so is all stimulus.

Christopher Beam is a Slate political reporter.

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