MARCH 28, 2009 -- Ranking members in the Senate and House are scrambling to come up with a way to bypass Gov. Mark Sanford’s pledge to block acceptance of $700 million in federal stimulus money.
Why? Because if Sanford sticks to his guns to not use the money to boost jobs, some technicalities in the federal stimulus legislation may derail the legislature from accepting the money constitutionally. Sanford, whose goose looked cooked over the issue, now may have the upper hand.
The consequences could be dire. If legislators are not successful in figuring out a way to take the money without Sanford’s help, House Speaker Bobby Harrell (R-Charleston) said thousands of teachers and state-incarcerated convicts could be on the streets in the coming weeks and months. According to some in the Statehouse, the clock is ticking, with the money disappearing after an April 3 deadline.
Sanford, if you’ll recall, has taken the bully pulpit over the last few weeks to decry the Obama administration’s federal stimulus packages as the worst way to help the country climb out of its current financial hole: more debt. Last week, Sanford wrote twice to the administration to be able to use the money for debt reduction. Both entreaties were turned down.
A new twist to the economic melodrama came this week when U.S. Sen. Lindsey Graham (R-S.C.) sent Statehouse leaders a report compiled by a congressional legal research office that muddied the waters as to whether they would be able to accept the money regardless of Sanford’s stance.
Now they're worried
For weeks, Statehouse leaders said they weren’t worried because of wording put into the federal stimulus bill by Jim Clyburn, the South Carolina Democrat who serves as the majority whip in the U.S. House.
Clyburn, well aware of Sanford’s opposition in his home state, inserted language into the bill that was intended to allow all of the stimulus money to bypass governors and flow into state coffers. Sanford wasn’t the only governor to oppose the bailout, as he was joined by Perry of Texas, Jindal of Louisiana and Palin of Alaska at different times.
The bailout was supposed to be worth $8 billion dollars over two years to South Carolina, with a big chunk of that coming from tax credits. Of that total amount, $700 million was to help stabilize the state budget over two years, at $350 million each year, but only if the money was used to support education, health care and the like.
But Graham’s report uncovered an unexpected surprise. According to Senate Finance chairman Hugh Leatherman (R-Florence), Clyburn’s language calls for the money to be “certified.”
The problem? Only the executive branch can “certify” money. That means for the General Assembly to accept the funds, it might have to violate the constitution and “usurp“ the executive branch, or Sanford. [It’s unclear whether the state Budget and Control Board qualifies as an executive branch agency that can “certify” the money.]
And the state constitution may not be the only problem. Leatherman said earlier this week after reading Graham’s report that if the General Assembly certified the money it might violate the 10th Amendment of the U.S. Constitution.
Without that money, the proposed $6.6 billion state budget for 2009-10 that the House Ways and Means Committee just wrote and the House approved after two days of tepid debate would have huge holes in it. How huge?
Harrell, standing next to Leatherman after a barbecue luncheon this week, said it was possible as many as 4,000 K-12 teachers would either be let go or vacant positions left unfilled. With the closing of at least two prisons, the state could see more than 3,000 prisoners go free early, Harrell said.
When asked which they’d rather see on the streets, the teachers or the cons, Leatherman began stroking his chin, and Harrell, gathering himself, said, teachers. “Because I’d rather have bad people put away,” he said.
Biggest showdown ever
This may turn out to be the biggest showdown ever between the governor and the legislature, which have sparred and sniped continuously over the past six years.
And what weapons was Leatherman picking up first in this fight? The pen.
First, Leatherman said he would instruct Senate Finance staffers to create two different budgets. One would account for the federal largesse, the other would not.
Second, Leatherman said he would write the governor to ask him to relent and allow the money to come to the state.
House Ways and Means Chair Dan Cooper (R-Piedmont) said the legislature could write a proviso into the eventual budget that could account for the stimulus money at a later date once it becomes available. “It could even be done when the two chambers go into conference committee to discuss the budget,” Cooper said.
Congressman Clyburn’s office was busy, too, this week with a request into the federal Secretary of Education to reroute the education portion of the $700 million, roughly half, to the state’s Department of Education.
“That is not the Congressman’s preferred solution,” said Clyburn spokesperson Hope Derrick, because “that would allow someone in Washington, D.C. to make decisions for the state of South Carolina.”
Derrick also said that Clyburn disagreed with Graham’s reading of the congressional research report, saying it was “too narrow” and that the report was “not a legally-binding document.”
Derrick, when asked if the Congressman would have written the language any differently given a chance for a “do-over,” said Clyburn stood behind the wording she said was hammered out in meetings between Leatherman and other Senate leaders.
According to Derrick, the state legislature will have 120 days following April 3 to capture the money.
So why hasn’t the money-hungry General Assembly just gone ahead with plans to accept and certify the money? Two words: Ned Sloan. Two more words: Howard Rich.
According to one Senate insider, there was considerable concern within the Gressette Building that the money could get tied up in courts for months on end if a litigious busybodies like Sloan, who has filed suit against the state or agencies somewhere near 60 times since 1980, or Rich, the powerful money-man behind the national Club for Growth, would contest the action.
And those months, it was feared, could stretch on and on, depending where the lawsuits were filed. Sloan’s lawyer declined comment on the matter.
Crystal ball: South Carolina is going to get the money. Obama’s people wrote the stimulus bill, Democrats passed the bill and eventually political pressure will win out in court. Will it be in time to save teachers and prisons? Ask again later. Will Sanford stage a huge fight only to back down in the 11th hour like he did with applying for a federal loan program to underwrite the state’s empty unemployment commission bank accounts? Ask again later. What is for sure at this point? One, South Carolinians will have to pay back the money spent in the federal stimulus package, even if it some of the state’s unclaimed portions ends up in other states. Two, Leatherman probably doesn’t have nice enough letterhead to get Sanford to relent.