(CNN) – South Carolina Gov. Mark Sanford is sticking to his guns – but leaving all of his options open – when it comes to $700 million in disputed stimulus funds at the center of a multi-sided dispute involving federal and state lawmakers.
The governor is hoping to reach an agreement with the legislature that would allow state funds to be used to pay down debt, Sanford spokesman Joel Sawyer told CNN Monday. If an agreement is reached, then Sanford will complete the process of applying for the $700 million in funds available from the federal stimulus package.
After weeks of outspoken criticism of President Obama's stimulus package, Sanford sought permission from the White House last month to use $700 million due South Carolina in order to pay down debt instead of for current spending as envisioned by the new administration. When the White House balked at Sanford's request, the Republican announced his attention to forgo the $700 million altogether.
Sanford's position made him the target of a Democratic ad campaign and of blistering criticism from House Majority Whip Rep. James Clyburn, who is also from South Carolina. The governor's outspoken stand also raised his national profile just as the GOP is regrouping and searching for its next leader after suffering losses in the last two national election cycles.
Last week, fellow South Carolina Republican Sen. Lindsey Graham urged Sanford to file the necessary paperwork by Friday's deadline in order to preserve the state's right to actually seek the money at a later date.
"[T]he choice for South Carolina now is whether to accept the stabilization funding or see the money go to another state," Graham said last week as the deadline approached. "We can refuse to accept it, but we cannot refuse to pay it back. Based on that dilemma, I believe it is in South Carolina's best interests to apply for these funds. They will do some good."
Graham also said he hoped Sanford and the South Carolina legislature could reach a compromise in stalled budget negotiations which have been part of the reason the state's use of the money is up in the air.