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Mary Ann Chastain/AP
South Carolina Gov. Mark Sanford

GOP Governors Flip-Flop on Accepting Stimulus Funds

February 19, 2009 01:32 PM
by Isabel Cowles
Several Republican governors previously said that they would not accept at least part of the allocated state funding from the recently approved stimulus package, but some of them appear to have changed their minds.

Stimulus About-Face

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Some GOP governors who initially dismissed the much-contested American Recovery and Reinvestment Act have announced that they will accept funding after all.

South Carolina’s Mark Sanford, Rick Perry of Texas, Sarah Palin of Alaska, Haley Barbour of Mississippi, Bobby Jindal of Louisiana and Rick Perry of Texas were among the Republican governors who threatened to refuse the funds granted to their states. But recently, two of the most vocal critics of the measure have agreed to accept funding, signaling that Republican resistance to the package may be melting away. 

For Sanford and Perry, resistance to a stimulus bill has been ongoing. As far back as December, the lawmakers co-authored a piece in The Wall Street Journal arguing against state bailouts.

According to the piece, accepting federal aid now means “mountains of debt” in the future, as the government itself often does not have the money it’s lending. Additionally, the governors asserted that a “bailout mentality” robs Americans of their sense of personal responsibility and entrepreneurship.

Today Sanford reversed his position, saying that his stance, "doesn't preclude taking the money." He and his staff will examine the plan to determine which elements can be effectively applied to South Carolina. 

Additionally, the Houston Chronicle reported that Governor Perry wrote a letter to President Obama on Wednesday stating that Texas will accept its share of stimulus funding.

According to Perry’s spokesperson Allison Castle, “Perry hasn’t changed his view of the stimulus funding but is simply responding to a requirement in the package for states to get money.” The governor’s office is going through the proposal “line by line,” and if Perry finds that any provision would be burdensome to Texas taxpayers after federal resources are gone, he would refuse those funds.

Background Information: GOP Govs. Wary of Stimulus

Although some of these governors have agreed to accept at least part of the stimulus funding, many previously voiced objections to the proposal.

Gov. Sanford wrote recently in another op-ed piece that the stimulus package, “undermines what has historically been the ultimate source of economic stimulus—the American worker and entrepreneur.”

Palin said her state would consider accepting money for construction projects, but emphasized unwillingness to take handouts for social programs. Barbour, Perry and Jindal each said that they would need to better examine the potential allocation of funds to avoid taking money that might ultimately prove burdensome to taxpayers.

Other lawmakers accuse governors who reject the funds of putting their own interests before the needs of their constituents. U.S. Rep. James Clyburn, D-S.C., told the Associated Press that no community “should be denied recovery assistance due to their governor's political ideology or political aspirations.”

Ultimately, governors would not have had the final say anyway, explains Robert Schlesinger of U.S. News & World Report. It’s true that under Division A of the Recovery Bill, governors may elect to accept or refuse funds within 45 days, provided the funds will “create jobs and promote economic growth.” However, if the governor chooses to refuse the money, the state legislature can override the decision if it deems the funds necessary by adopting a “concurrent resolution.”

Reference: The Stimulus Bill

The stimulus package was officially approved on Feb. 13. According to The Wall Street Journal, about 38 percent of the bill will go toward tax cuts and to aid. The remaining 24 percent is to be targeted toward social spending programs. A findingDulcinea report examined the exact allocation of the package’s billions.

But what impact will the stimulus have on the individual consumer? The most immediate and obvious effects will be through the $115 billion in tax credits: up to $400 per individual tax filer and up to $800 per married couple in 2009 and 2010.

In addition, some 24 million taxpayers near the threshold for having to pay the Alternative Minimum Tax will be spared, thanks to a $70 billion provision within the bill. The package also provides tax credits for higher education, first-time homebuyers, new car purchases and businesses buying equipment.

The Obama administration has made transparency a goal in the stimulus endeavor. To track the progress of the stimulus package, visit Recovery.gov, where you can follow the implementation of the Recovery Act on a daily basis.
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