Would a governor in a state with the third-highest unemployment rate in the nation really say no to President Obama’s stimulus money?
That is the question reverberating through South Carolina, where Republican Mark Sanford -- a popular second-term governor and noted fiscal conservative -- says he may reject some of the $2.8 billion in federal funds headed to his state.
Some observers suspect that the governor, who is regularly mentioned as a presidential contender in 2012, is just grandstanding. It’s hard for them to imagine a lawmaker leaving millions of dollars on the table in a state with a 9.5% unemployment rate -- one that has cut hundreds of millions from its budget in recent months, and will cut millions more in the next fiscal year.
“I don’t know whether this is some presidential politics underway, and just headline [grabbing],” said Republican Glenn F. McConnell, president pro tempore of the South Carolina Senate.
But others said they wouldn’t be surprised if Sanford tried to send something back. The 48-year-old real estate entrepreneur has earned a reputation as a fiscal hawk since his 1994 election to Congress as part of Newt Gingrich’s “Republican Revolution.” As governor, he has vetoed hundreds of projects in the name of budgetary restraint, earning the ire of both Democrats and Republicans.
“He’ll probably stick to his guns,” said Otis Rawl, president of the South Carolina Chamber of Commerce, who has urged the governor to accept the stimulus money. “I don’t think he’ll give up at all.”
For some out-of-work South Carolinians, even the suggestion of rejecting bailout money fills them with outrage. William Williams, 38, a laid-off telecommunications worker, had a message for Sanford as he searched futilely through a computerized job bank in Marion County, a struggling industrial area where unemployment has reached 19%.
“Stop playing politics with my life,” Williams said, looking at his unemployed brother James. “If you ain’t going to help your people . . . “
“Then get on out the way,” James said.
Similar dramas are playing out in a handful of states this week, as lawmakers prepare to grab their share of the $787 billion in stimulus aid.
Although a majority of Republican governors, including California’s Arnold Schwarzenegger and Florida’s Charlie Crist, have supported the stimulus, a few have emerged as vociferous opponents of the legislation. Sanford leads a group of GOP governors -- including Rick Perry of Texas, Bobby Jindal of Louisiana, Haley Barbour of Mississippi and Sarah Palin of Alaska -- who have left open the possibility that they could try to send a portion of the money back.
Sanford, who was scheduled to speak at a California GOP banquet in Sacramento on Friday night, was an early critic of the stimulus bill, confronting Obama over the issue at a governors meeting in December. His threat to block South Carolina’s share of the money prompted Rep. James E. Clyburn (D-S.C.), the House majority whip, to insert language that allows state legislatures to accept stimulus money even if it is rejected by a governor.
But governors may have other tactics at their disposal, like ordering agency heads not to spend the cash. Their threats have continued to anger Clyburn. Late this week, the African American congressman said their opposition to the stimulus was a “slap in the face” to black Americans, because most represent Southern states with large black populations.
No matter what course they take from here, the political stakes will be high as the governors jockey for leadership of a Republican Party eager to retool for 2012. If the stimulus package is deemed a failure in the coming months, politicians like Sanford could be seen as prophetic, and lead a resurgence of fiscal conservatives within the GOP. But if the recovery plan proves popular, fiscal hawks could lose ground to stimulus supporters like Crist.
“I think they’re playing a very high-risk game,” said Bruce Ransom, a political science professor at Clemson University. “If things start to improve later this year, then they’re on the outside looking in.”
Sanford, in an interview at the statehouse last week, said politics weren’t a factor in his dissent. A rangy man with a phlegmatic demeanor that seems the antithesis of the populist Southern style, he traced his conservatism to a Depression-raised father whose frugality, he said, bordered on the “weird.” He also cited Thomas Jefferson, crediting him with “conservative themes of limited government and maximized individual freedom.”
Some of his issues with the stimulus money were specific: He worried that some would be used to fund programs that the state may not be able to afford after the one-time federal subsidy is gone.
“There’s a two-year windfall, then there’s a hole after that,” he said. “Who fills the hole?”
But Sanford, the head of the Republican Governors Assn., has broader concerns as well. He fears that excessive government borrowing to fund the stimulus could lead to an inflationary spiral to rival Weimar Germany’s. He fretted over a “moral component” to multi-trillion-dollar debt -- that it was a “future tax” that must be repaid by generations to come.
To critics like Democratic state Sen. Robert Ford of Charleston, the governor’s threat to reject some of the stimulus is the latest example of an unwavering belief in free-market ideals that are detached from the realities facing many South Carolinians.
“I think our governor would make an interesting college professor,” Ford said. “I think he’s psyched himself out that he’s Mr. Intellectual. . . . He don’t understand that he represents one of the poorest states, and neediest states, in the union.”
Now, as South Carolina’s economy threatens to get even worse -- the state Board of Economic Advisors predicts unemployment at 14% by June -- it remains to be seen if Sanford’s supporters will continue to agree with his principles.
Part of that may depend on the kinds of battles in which Sanford chooses to engage. Last year, he was criticized by some fellow Republicans for refusing to apply for a $146-million loan from the federal government to cover the state’s unemployment benefits fund. He relented under pressure.
In Marion County, where plant closings and layoffs have wreaked havoc for a decade, Sanford can still count on conservative supporters like Pat Stedman, 55. His long-distance truck driving business has dried up, but he remains skeptical of the stimulus.
“I agree something needs to be done, but I’m not sure this is it,” Stedman said.
Real estate agent Joyce Rivas voted for Sanford twice, but said she was angry with his threat to reject stimulus dollars. “It bothers me when these so-called true conservatives say this is all government spending and so forth,” she said. “For starters, where’s their answer to this?”
Asked if he worried that South Carolinians would reject free-market principles in a down economy, the governor paraphrased 18th century historian Edward Gibbon, chronicler of the fall of Rome.
As he did so, he chuckled: Sanford knows about the critics who call him too professorial.
“The history of man,” he said, “is they will always trade off freedom for security.”