The battle continues over unemployment funds

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Facing South has been covering the ongoing saga of Southern Republican governors vs. the federal stimulus. A handful of GOP rising star governors - including those in Texas, Louisiana, South Carolina and Alabama - have been making headlines these past couple of months for rejecting unemployment benefits from the $787 billion federal stimulus package.

Here's the conflict: Not everyone who loses a job automatically qualifies for unemployment benefits, but the federal stimulus package gives states a chance to expand eligibility, a move that could help thousands of unemployed Americans weather the recession. The unemployment funds would make it easier for more jobless people to qualify for benefits and draw checks for longer periods, as well as cover laid-off part-time workers. In some states the shift would require changes to state law in order to qualify for the stimulus funds. The handful of Southern governors that have argued against the unemployment funding have said that the aid comes with 'too many strings' attached and would hurt employers in the way of higher taxes down the line.

Yet at the political core of the drama, these Southern governors are accused of using federal stimulus money to score big points with GOP fiscal conservatives and to gain clout as up-and-coming leadership in the Republican party (many are seen as possible GOP presidential nominees for 2012). While leading the anti-stimulus campaign during the past few weeks, these governors took to the national stage and airwaves with speeches critical of the economic recovery stimulus package and the president's budget plan.

While these governors received praised from the conservative movement in Washington, the backlash at the local level has been significant. Community leaders and state legislatures have heavily criticized the governors for putting partisan ideology and politics ahead of people's basic needs in a time of economic crisis, particularly in the poverty-stricken South.

These past few weeks have also ushered in heated battles in state legislatures as lawmakers in Alabama, South Carolina, Mississippi and Texas moved to go around their governors and accept the money. This month we're waiting for several of these fights to come to a head.

Texas

Two weeks ago, the Texas Senate defied Republican Gov. Rick Perry when they voted 19-11 to accept $555 million in federal stimulus aid that would help the state replenish its unemployment compensation fund at a time when money is running short.

Along with the full Senate, a House committee has also approved the unemployment measure, and the bill is expected to get a vote soon by the full House. Support for the bill is considered strong in the Texas House, but there is some urgency in finishing work on the bill before their session ends June 1 in order to give the legislature time to override a possible Perry veto.

Perry hasn't said whether he'll veto the legislation, but he has not wavered in his steadfast opposition either. Even though he has agreed to take almost all of the nearly $17 billion slated for Texas in federal stimulus money, he says there are too many strings attached to the $555 million in unemployment benefits.

But supporters of the unemployment aid argue that businesses will be paying much more for the next few years unless the stimulus money is accepted. They point to the state's almost-depleted trust fund for unemployment benefits, which is projected to be down by $812 million by October, triggering an automatic increase in the tax employers pay.

But that argument doesn't seem to move Perry, who has launched himself into the GOP spotlight these past few weeks by stepping up his criticism of Washington spending. Observers say it is an attempt by Perry to draw in his conservative base as he prepares for his re-election battle with Republican Sen. Kay Bailey Hutchison. Last month Perry even held a press conference supporting a resolution of states' rights and spoke at an Austin 'anti-tax' rally, where - laden with fiery right-wing rhetoric - Perry suggested that Texans may get so fed up with the federal government they may want to secede from the union.

Tennessee

Democratic Gov. Phil Bredesen of Tennessee has waffled on the unemployment insurance issue. He initially said he would reject the unemployment stimulus funds, complaining that it came with too many strings attached, but then backpedaled after he drew heavy criticism from community leaders and even received a confused call from the White House.

Advocates thought that meant Bredesen and local lawmakers were prepared to accept Tennessee's $141 million to expand benefits for laid-off workers. But that seems to not be the case -- while state officials have decided to accept stimulus money to bolster the unemployment program to some extent, a proposal in the Tennessee legislature would opt out of the two most expensive programs that would help an estimated 15,400 Tennesseans qualify for unemployment pay.

Alabama

In early April, Alabama state lawmakers passed a resolution to take the $99 million in federal money to provide jobless benefits in the state, even though Republican Gov. Bob Riley objected to the aid.

Riley has refused to sign the resolution, saying that the legislature must change state law for Alabama to qualify (the stimulus aid would require a change in state law to make about 20,000 more unemployed people eligible for benefits). Because the legislature hasn't rewritten the law yet, Riley argues that the resolution is meaningless.

Louisiana

Louisiana Republican Gov. Bobby Jindal -- who has became one of the GOP's most prominent voices against the stimulus -- made one of the first announcements in February to reject stimulus aid. Since then he has rejected $98.4 million in federal stimulus money that would expand Louisiana's unemployment compensation program, as well as another $9.5 million in health spending.

Lawmakers in the Louisiana legislature are still pushing for the state to accept all of the stimulus money for which it is eligible, but Jindal is fighting to make certain that legislation that would reverse his decision regarding unemployment benefits is defeated.

Mississippi

Barbour-photo.jpgMississippi is receiving an estimated $2.5 billion to $2.8 billion through the stimulus, but Republican Gov. Haley Barbour announced weeks ago that he was rejecting about $56 million from the stimulus because he does not want Mississippi to extend unemployment benefits to people seeking part-time work. Barbour said last week that he stands by that decision. The Mississippi state legislature had the power to overrule Barbour's decision with a joint resolution, but the motion did not pass in the Senate.

Community advocates have launched an online campaign called 'Standing with Mississippi' that includes a petition urging Barbour to change his mind and to accept the $56 million in unemployment insurance benefits, pointing out that the aid could help some 40,000 people get through the recession and generate more than $120 million in economic activity in the state.

South Carolina

The fight between South Carolina's Gov. Mark Sanford and the state legislature over stimulus funds has been one of the most heated and charged standoffs. South Carolina stands to see $2.8 billion from the stimulus law during the next two years, but Sanford, who has been very vocal in his opposition to the stimulus plan, says he won't request $700 million of the aid unless it can be used to offset debt, something the White House says the funds cannot be used for.

South Carolina's Attorney General Henry McMaster issued an opinion in March that the state legislature cannot bypass Sanford to accept the $700 million in federal stimulus money. South Carolina legislators, in response to the news, predicted dire consequences if they have to write a budget without the money, including laying off as many as 3,000 teachers.

In April, the battle over the funds went as far as the South Carolina Supreme Court. Casey Edwards, an 18-year-old senior at Chapin High School in Columbia, S.C., asked the court to allow the legislature to bypass the governor and take the $700 million in budget aid (most of this aid is set to help public schools survive the recession). But the Court ruled that it could not hear the lawsuit, stating that the legislature has to first act to spend the stimulus cash. This left open the possibility of a second court case if lawmakers include the money in the budget.

Supporters of the stimulus aid say things are looking up. The South Carolina Senate voted last week in favor of an amendment that would force the governor to take the stimulus funds. This Thursday the state Senate included the amendment in their $5.7 billion budget they sent on to the House, thus forcing the stimulus issue to the forefront. The amendment requires Sanford to 'take all action necessary and required' by the stimulus law to secure funds legislators included in their spending plan. This action means in the coming weeks legislators either will be heading to court for a final decision on who controls the funds or overriding an anticipated veto by Sanford.

Needless to say, the Southern stimulus drama will continue. Stay tuned.