NEW YORK (CNNMoney.com) – It's not that easy to turn down federal funds.
Several governors who initially voiced concerns about expanding state unemployment benefits to qualify for federal stimulus funds have decided to accept the money. Some were feeling the heat from jobless constituents, while others took comfort in learning recently from the federal Department of Labor that they could curtail eligibility later on.
The benefits expansion is among the most controversial components of the stimulus package, and it comes at a time when millions of people across the nation are losing their jobs. The nation's unemployment rate stood at 8.1% in February and is expected to climb to 8.5% when the March figures are released next Friday.
The American Recovery and Reinvestment Act requires state legislatures to broaden the unemployment guidelines to allow more women, part-timers and low-wage workers to qualify.
In return, the states will get to partake in a $7 billion federal grant aimed at helping the unemployed. At least 19 states automatically qualify for the funds since they already had widened eligibility.
Some state officials, however, are concerned they will have to fund the expanded program by hiking taxes on employers once the federal money runs out. But they were soon hit by a backlash of anger from state lawmakers, unions and jobless residents.