Dem Legislature Backs Governor's 'No' to Part of Stimulus Money

The language of Barack Obama’s $700 billion-plus stimulus package makes it clear that, should governors of states refuse any of the funds, the respective state legislatures have the option to overrule them and take the federal dollars.

That won’t be happening in Mississippi, where Republican Gov. Haley Barbour declined stimulus money for unemployment insurance. The Magnolia State’s Democratic-controlled legislature responded by siding with Barbour, saying “thanks but no thanks” to some of the stimulus money.

In an exclusive interview with HUMAN EVENTS, the onetime Reagan White House staffer and Republican National Chairman also fired salvos at the Obama administration’s economic agenda (“not so much an economic agenda as an ideological agenda”) and its recent cuts in defense programs. And drawing on his own background as RNC chieftain from 1993-97, Barbour also called on the GOP today to “start rebuilding from the bottom up.”  

Barbour on Stimulus

“We’re declining those [stimulus] funds under what they [the Obama administration] calls ‘The Unemployment Insurance Modernization Act,’” Barbour told two HUMAN EVENTS reporters yesterday. “We’re declining those funds because to accept them would necessarily lead to a tax increase of about $16 million a year. It would be a tax increase on employment.”

Mississippi’s two-term chief executive went on to explain that “We fund unemployment insurance through an unemployment insurance tax on every employee of every private business in this state. We would have to raise that tax by about 20% after the federal money runs out in a couple of years.”

“There’s nothing stupider in a recession when you’re trying to create jobs,” warned Barbour, “than to put an extra tax on job creation.”

Noting his authority as governor to say “what we will participate in and what we won’t participate in” in stimulus funding, Barbour also pointed out that “if the legislature disagrees with me, then they can by joint resolution effectively overrule me. Well, the House voted to do that, but the Senate didn’t.” (Democrats control the Mississippi House by a margin of 73-to-49, and the Senate by a margin of 27-to-25.).

Barbour did go on to concede that “we’re accepting most of the money” from the stimulus package and “a lot of the money has strings attached."

“There are things in it that aren’t harmful.  But mandating a tax increase is harmful. We’re just not going to do that.”

The governor wishes “we had more latitude about how to spend the money, even if we’re required to spend it in category, like education.  With more latitude, we can spend it more wisely and get bigger bang for the buck.  We are going to ask for a waiver to some of the rules so we can maximize some of the effectiveness of some the spending.”

On Obama, Spending, Defense, and the GOP

The Mississippian spared no criticism when addressing the new President’s agenda after nearly 100 days.  

“If we watch the Obama administration fire the CEO of General Motors and replace the board of directors of a private corporation,” he told us, “it shows how far-left their views is about government’s role in the economy. They have proposed trillions of dollars in new spending programs, both through their budget — with this mind-boggling deficit which is nearly three times bigger than any deficit in the history of the country — to these enormous off-budget programs.”

Barbour specifically cited “the Federal Reserve announcing it’s going to buy $300 billion worth of treasury bills, and then another $700 billion of mortgage-backed securities.

“This is not so much an economic agenda as an ideological agenda.”  

Turning to recent proposed cuts in the defense budget, Barbour noted that “Ours is a big defense state. . . .We make helicopters in Columbus and parts of aircraft in Meridian with Lockheed Martin.  Raytheon makes ultra-sophisticated radar for military aircraft here in Forest, Mississippi. There are a number of other defense contractors, so we are obviously worried about the economic effect of the cuts being proposed at the defense department.”

Any conversation with Haley Barbour inevitably winds around to his background as a master Republican operator — from his days as the executive director of the Mississippi GOP when the party was miniscule in his state to his years as political director under President Reagan to his chairmanship of the RNC, when the party won [in 1994] both Houses of Congress for the first time in forty years.”

So what advice does the old pro give congressional Republicans newly-minted RNC Chairman Michael Steele?
“We should fight over what’s important,” Barbour said, referring to his party in Congress, “And that’s what we’re doing.  The Republicans are not trying to sabotage everything that comes along.  But they are digging in over what’s important.  And that’s what the American people expect them to do.  And that’s the part of our rebuilding that the Congress can perform and excel in.”

As for Steele, Barbour believes it’s too premature and unfair to assess his performance.  But he recalled how when he became chairman in 1993, “I was visited by a group of very respectable, good Republicans who felt I wasn’t visible enough.  From when I was elected until the Fourth of July, I visited virtually every state. We had a series of regional meetings with state party chairmen. I spent an enormous amount of time in meetings, speaking with party events, meeting with donors. When you’re out, that’s the time you rebuild your party from the bottom up.”

Within a year, he concluded, “most of them [those who met with him to criticize his performance] had thought I had done the right thing.  There’s a time for being out on television, and there’s a time for being out to nurture the grass-roots.”