Governor Sanford to Feds: Stop Wasting Our Money

Wednesday, December 17, 2008 5:00 PM

COLUMBIA, S.C. -- At a time when other states are clamoring for cash, South Carolina Gov. Mark Sanford is saying no thanks.

The newly minted head of the Republican Governors Association is carving out an identity as the anti-bailout governor, speaking against calls for more money from Washington for new state public works spending, lifesaving dollars for the auto industry and even stimulus checks.

At a time when the nation sinks deeper into a recession, state budgets everywhere are growing greater holes and unemployment rates are soaring, Sanford knows he doesn't have many people rallying around him. But he doesn't care.

"I find myself in a lonely position," he said in an op-ed column in The Wall Street Journal last month. "While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. I may be the only governor to do so."

Sanford, a trim, 48-year-old former real estate investor who requires his sons to memorize a family constitution, clashes often with the Republicans who control both chambers of his state Legislature, once famously carrying two piglets to the door of the House chamber in opposition to what he said was pork-barrel spending. He fought lawmakers' spending increase proposals long before the housing crisis hit, warning of a looming recession.

He's loudly decried the $700 billion bailout of the financial services industry and the proposed bailout of the auto industry. He spoke against a proposed $150 billion economic stimulus proposal this fall and against one by fellow governors to provide billions for state infrastructure projects. His rationale has been consistent: More debt is not the answer, and the nation is already sinking in it.

"(W)e must be wary of the moral hazard present in the idea of bailing out the private or public sector," he wrote to President-elect Barack Obama during a meeting of the nation's governors earlier this month.

Sanford said Wednesday that bailouts sap people of their initiative, "which is the ultimate economic stimulus."

"If it turns out that no matter what you spend as a state or what you spend as a business or a municipality, it doesn't matter, we'll bail you out, then why should anyone at a personal or buiness level be circumspect?" he told The Associated Press. "It's a total gut check of where we are as a civilization. It's frightening what the federal government is doing."

It's not that South Carolina is doing better than most states. The state's unemployment rate hit 8 percent in October, a 25-year-high and the fourth-highest in the nation. Economists project it will worsen substantially next year. Currently, South Carolina is paying out more than $14 million a week in benefits.

But Sanford is even balking, at least for now, at asking for a federal loan for his state's unemployment benefits, which otherwise will run out of money at the end of the year.

While the dispute is the latest chapter of a long-running fight with the state's unemployment department - Sanford doesn't believe its statistics on unemployment are accurate and wants another financial audit of the agency - the standoff threatens to halt weekly payments of up to $326 for about 77,000 people.

South Carolina did tap a $15 million line of credit from the federal government, but the governor has yet to ask for the $147 million needed to get the state through the end of March. Michigan and Indiana already have borrowed federal money, the U.S. Labor Department said, and the National Association for State Workforce Agencies expects 30 states will see their benefit funds evaporate in the next 12 months because of the high numbers of people seeking help.

The governor says he wants the agency to collect more information on how and why people are unemployed so the state does better creating jobs.

"Before we proceed with any loan request, we want assurances from the agency that it will move forward on these issues," Sanford spokesman Joel Sawyer said.

Federal Labor Department spokespeople said it would be unprecedented for a state to fail to arrange for money to pay the benefits. The state has no emergency funding mechanism for the benefits.

"I'm out of money at the end of the year," said Ted Halley, executive director of the South Carolina Employment Security Commission. "I can't write the checks if I don't have the money to write the checks."

Workers don't understand why the state isn't jumping to take the money. Altray Reed, 41, of Columbia, said her job as a cafeteria worker is taking a three-week leave for the holidays, and she needs the unemployment to pay the bills.

"I don't feel he should wait. We're depending on that unemployment," she said.

Sgt. Michael Jones, 61, of Columbia, said he was discharged from the Army about eight months ago and is running out of savings. Unable to find work, he was applying for unemployment benefits.

"I think it is a game. They're the ones not hurting," he said. "The little people are suffering."

Even before the financial crisis, Sanford was no stranger to going it alone. If there is an ideological thread that runs through his actions, it seems libertarian. His two favorite movies - "Gladiator" and "Braveheart" - feature protagonists who die fighting for their causes.

And it was his worry about federal spending that helped launch his career. The eldest of four siblings, Sanford says he never intended to go into politics. After working for a couple of years in the finacial world in New York, he returned to South Carolina, where he said he was shaped by his summers working on the family plantation. That's when, over a business lunch, his complaints about the federal deficit and government spending led to a challenge that he do something about it.

"It may seem out of character for a governor of a state with a struggling economy to turn down an offer of help," said Scott Huffmon, political science professor at Winthrop University who has watched Sanford's career. "However, there is an absolute ideological consistency to Mark Sanford. And to understand anything he does, you need to understand that." ... 62990.html