Stimulus debate rolls on in Virginia governor's race

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/06/10/deeds.phamby.0610.cnn.jpg caption="Deeds promised to pursue legislation to seek federal unemployment money rejected by Virginia Republicans earlier this year."]WASHINGTON (CNN) - When the Republican-controlled Virginia House of Delegates voted in April to reject $125 million in stimulus funding for unemployment benefits, they guaranteed that the ideological fight over the federal money would spill over into this year's closely-watched governor's race.

Like Tim Kaine - the current governor of Virginia - Democrat Creigh Deeds favors taking the money. Republican Bob McDonnell opposes doing so. The winner of the race will determine whether or not the money will be pursued in 2010.

On Tuesday, Deeds made a pledge to put forth legislation next year to accept the money for unemployment benefits if he's elected in November. Virginia's jobless rate ticked up to 7.3 percent in June, the most recent month of unemployment statistics available.

"I voted for Gov. Kaine's proposals and I still support them," Deeds said in a statement announcing his plans. "I intend to start the process on my first day in office to accept these funds should our hard economic times continue."

But the purpose of proposing the legislation was two-fold: Democrats see the stimulus debate as a chance to flog McDonnell as out of touch with struggling workers in a tough economy, and Deeds didn't pass up the chance to take a swipe.

"By leading the partisan charge to oppose $125 million in stimulus funds to extend unemployment benefits, Bob McDonnell turned his back on Virginia's most vulnerable citizens," he said. Deeds - keen on making the election a referendum on the last president and not the current one - also managed to compare McDonnell to George W. Bush.

Ever since the unemployment legislation was killed in the state house in April, McDonnell's team has been ready with their response, which is rooted in this fact: Despite its leftward trend in recent years, Virginia is still a moderate state that has gone to great lengths over the last decade to cultivate a pro-business environment.

McDonnell is eager to tie Deeds to President Obama's contentious economic policies, arguing that Democrats and labor unions are seeking to impose big government onto the free market system.

"This is just another example of how our opponent stands for big government programs that will further delay our economic recovery, while Bob McDonnell is focused on policies that will protect our taxpayers, grow Virginia's economy, create new jobs and bring more opportunities to every region of the Commonwealth," said McDonnell spokeswoman Crystal Cameron, reacting to Deeds' announcement that he would push for the money if elected.

Cameron called the portion of the stimulus money devoted to jobless benefits "an unfunded federal mandate" that would burden small business owners when the funds expire.

"Virginians are hurting and Bob McDonnell is committed to helping our unemployed workers get back on their feet," Cameron said. "He knows that Virginians want a paycheck, not an unemployment check."