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Handful of Governors May Refuse Federal Unemployment Benefits

Some GOP governors say new rules on unemployment benefits would hurt their states so they aren't going to accept a portion of the $787 billion recovery and reinvestment act signed into law this week.

FoxNews. February 22, 2009. Mississippi Republican Gov. Haley Barbour, South Carolina Gov. Mark Sanford and Alaska Gov. Sarah Palin say they may follow suit. They say the money to be disbursed to the states in the $787 billion spending and tax cuts package comes with too many strings attached.

"The unemployment insurance reform, if you will, would require the state to pay people who are not willing to take a full-time job," Barbour told FOX News, saying his state is not going to expand benefits to part-time workers. "We're not going to change that. ... We're going to give up about $50 million of federal money."

"It would be like spending a dollar to get a dime," Jindal said on NBC's "Meet the Press. "The federal stimulus bill says it has to be a permanent change in state law if you take this money, so within three years, the federal money is gone, we've got now a permanent change in our laws."

"What we would be required to do would be, for the first time, increase the level of benefit for part-time workers," Sanford told "FOX News Sunday." "We can't pay for the benefits already in the program, but to get the stimulus money, we've got to increase the program's size and scale."

The White House says Sanford's state, which has the third highest unemployment rate in the nation, would be eligible for $8 billion from the spending bill, which administration officials say would create 50,000 jobs. Sanford said that's not how job creation works.

"It sounds like the Soviet grain quotas of Stalin's time -- X number of jobs will be created because Washington says so. And that's not the way that jobs get created," he said.

But Michigan Gov. Jennifer Granholm, a Democrat, said she'll be happy to take whatever cash Sanford and others reject. Also in line with an open hand are Republican Govs. Charlie Crist of Florida and Arnold Schwarzenegger of California.

Most of the governors are in town for the National Governors Association Winter Meeting. Palin, however, is back at home dealing with her state's legislative session.

On Saturday, Democrats claimed that governors who turn down money from are "fringe" politicians eager to score political points.

"All of us are committed to working with President Obama to pull our nation's economy out of the ditch that George W. Bush ran it into," Maryland Gov. Martin O'Malley said at the Democratic Governors Association press conference on Saturday. "If some of the fringe governors don't want to do that, they need to step aside and not stand in the way of the nation's interests."

"I think in this instance I would humbly suggest that the real fringe are those that are supporting the stimulus," Sanford, who is chairman of the Republican Governors Association, said in response. "It is not at all in keeping with the principles that made this country great, not at all in keeping with economic reality, not in keeping with a stable dollar, and not in keeping with the sentiments of most of this country."

But Crist said the bill is good for Florida because it will help children stay in school, pay teachers, help Medicaid program stay solvent and build roads in his state. He said the people elected Obama as their leader and that he's willing to help him and work with him when the nation is in such a dire situation.

Schwarzenegger added that it's time to put the needs of the country over principle.

"Well, Governor Sanford says that he does not want to take the money, the federal stimulus package money. And I want to say to him: I'll take it. I'm more than happy to take his money or any other governor in this country that doesn't want to take this money, I take it, because we in California can need it," he said on ABC's "This Week."

"This to me is not about philosophical theory," Granhold added on "FOX News Sunday." "This is about real people who through no fault of their own, are laid off because of a recession. ... So you better believe I'm going to take every dollar that is coming to Michigan. And if my colleagues here in Minnesota and South Carolina don't get -- don't use theirs, I'm going to be first in line to say for my people, for our citizens, to put people to work and to make sure that they can survive through this, I'll take their dollars, too."

Unemployment benefits are said to total about 2 percent of the stimulus package. Barbour said taking those dollars would force his state to eventually raise taxes when the stimulus money runs out, putting in place what he called an unfair tax on employers.

"There is some (money) we will not take in Mississippi. ... We want more jobs. You don't get more jobs by putting an extra tax on creating jobs," Barbour told CNN's "State of the Union' on Sunday.

Minnesota Gov. Tim Pawlenty, a Republican, said he's going to take the money his state is entitled to receive because it was his constituents who sent it to Washington in the first place.

"In Minnesota's case, we are a major net subsidizer of the federal government, and that's unlike some other states. For every dollar we send in, we only get 72 cents back. So we're paying the bill either way. We're going to take our share of the money," he said, adding that his state won't be hurt by requirements on unemployment benefits because those rules have already been in place for years.