Republican governors split over Obama stimulus

WASHINGTON (Reuters) – U.S. Republicans governors were split on Sunday over whether to accept all of the money their states stand to receive from a $787 billion economic stimulus plan which President Barack Obama signed last week.

Three governors of southern states have come out against taking part of the money designated to extend unemployment benefits and perhaps for other programs. A handful of others are considering follow suit.

With the global economy in crisis and unemployment at record levels, Obama made a top priority for his first month in office the package of tax cuts and spending for infrastructure projects and social services including unemployment aid. Only three Republicans in Congress backed its passage, charging Obama and his Democratic party had loaded it up with unnecessary spending and failed to cut taxes enough.

"There is some (stimulus money) we will not take in Mississippi. If we were to take the unemployment insurance reform package that they have, it would cause us to raise taxes on employment when the money runs out, and the money will run out in a couple of years," said Mississippi Governor Haley Barbour on CNN's "State of the Union."

"Then we'll have to raise the unemployment insurance tax, which is literally a tax on employment. I mean, we want more jobs. You don't get more jobs by putting an extra tax on creating jobs," Barbour said.

South Carolina Governor Mark Sanford and Louisiana's Bobby Jindal, who has often been mentioned as a potential Republican presidential candidate in 2012, have also said they would reject the unemployment funds, which make up a small proportion of the overall package.

Sanford, on "Fox News Sunday" said some of the stimulus money came with strings attached.

"What we would be required to do would be, for the first time, increase the level of benefit for part-time workers. Right now, it's full-time workers -- increase it to part-time workers," he said.

"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."

Later, speaking to reporters at a National Governors' Association meeting in Washington, Sanford listed some other monies he did not want, possibly including $42 million for retrofitting state buildings to be more energy efficient.

"We're looking at other things from a scale standpoint that are frankly irrelevant," he said.

CALIFORNIA HAPPY FOR MONEY

But California Governor Arnold Schwarzenegger, also a Republican, said on ABC's "This Week" he would gladly take all the money.

"Governor Sanford says that he does not want to take 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 need it," he said.

Republican Minnesota Governor Tim Pawlenty, seen as a prominent conservative voice and possible future presidential candidate, said he would take the money even though he did not agree with the philosophy behind the package.

"We are a major net subsidizer of the federal government ... 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 on Fox.

Pawlenty said Minnesota already covered part-time workers who lose their jobs so taking the money would not entail changing the program.

The economic recovery bill provides increases in federal backing for states' social services, infrastructure and education funding.

(Additional reporting by Lisa Lambert, editing by Jackie Frank)