Texas Gov. Under Fire For Rejecting Stimulus Funds

The Texas Race In Focus

As states begin receiving federal stimulus money, several Republican governors are increasingly coming under fire for rejecting parts of the assistance. In Texas, the battle is over unemployment insurance, and the issue has made its way into the governor's race.

Gov. Rick Perry misses no opportunity to bash the stimulus and the way in which he says other states jumped at the chance to get the money.

"They're begging Washington, D.C., for a bailout," Perry says. "Is there anybody out there that's gonna get one of them bailout checks? In Texas, we actually know it is a good idea to look a gift horse in the mouth."

Texas plans to spend $14 billion in stimulus money over the next two years. But the governor rejected $555 million in unemployment insurance, money that would increase the number of people eligible for benefits.

Perry says the Obama administration's move will result in businesses paying more when the funding runs out.

"Businessmen and women understand this very well," Perry says. "This tax goes up and down — it always has, it always will. This is an expansion of the [unemployment] program. This administration wants to force the state of Texas and other states with this stimulus money to change our practices, change our habits, change the way that we govern. And on this unemployment-insurance side, the message is very clear: Thank you, but no thank you."

Several other Republican governors also have rejected parts of the stimulus package. South Carolina's Mark Sanford has balked at taking education money. Louisiana's Bobby Jindal, Mississippi's Haley Barbour, Alabama's Bob Riley and Alaska's Sarah Palin have joined Perry in turning down extra unemployment insurance money. But Perry's decision doesn't sit well with job seekers.

Who Is Going To Have To Pay?

At a state-run jobs center in Austin, about 40 people huddle over computers typing resumes and scanning want ads. Wilbert Butler has been out of work since last summer and thinks public outrage over the governor's decision will only grow.

"I believe some of them don't know," Butler says. "But some of them's gonna know sooner or later about what he's doing."

Texas' unemployment rate, at 6.5 percent, is well below the national average of 8.1 percent. But 100,000 Texans lost their jobs in the first two months of the year. State businesses could have their unemployment taxes doubled to meet the demand. So reject the stimulus money, and businesses pay now. Take it, and businesses pay later when the money runs out.

"So the question is, who's gonna have to pay? Is it going to be the federal government helping us pay for it, or are we going to double the tax on employers to pay for it?" says Jim Dunnam, a leading Democrat in the Texas House. "And that's the choice he's making."

Perry's Re-Election Bid

Perry's battle against the Legislature is complicated by his bid for re-election next year. He already has a strong primary challenger in U.S. Sen. Kay Bailey Hutchison. At an AFL-CIO event this week in Austin near the Capitol, unemployed steelworker Don Smith said the governor shouldn't play politics while people in Texas are hurting.

"It's just another cheap trick, but your time's up Mr. Perry — and we're gonna make sure of it," Smith said.

Ross Ramsey, editor of the political newsletter Texas Weekly, says the question of whether the state should accept all the federal stimulus money has galvanized Republican candidates as they try to stake out their positions without alienating voters.

"Everything's going to be viewed through that prism," Ramsey says. "So if he chooses a red jersey and she chooses a green jersey, everybody's going to say, 'Oh, well that's just politics.' It may be that they would differ on this anyway. But it's brought into high contrast by the fact that they're running against each other."

Perry remains firm in his rejection for now. But just this week, Nevada's Republican governor, Jim Gibbons, backed away from his initial concerns and has accepted all the stimulus money. And like the Texas governor, Gibbons is up for re-election next year and already has primary challengers.

Ben Philpott reports for member station KUT in Austin, Texas.

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