Gov. Mark Sanford has proposed a compromise with state lawmakers over accepting $700 million in federal stimulus money — one that would require diverting state funds to pay off debt and accepting Sanford's suggested budget savings.

Speaking to a group of Furman University students Monday, Sanford said for the first time that he might accept the rest of the federal stimulus money due to South Carolina if lawmakers use an equivalent amount of state money to pay down debt the next two years.

Friday is the deadline for governors to accept the funds.

Sanford and lawmakers have been at odds over whether to use the federal money to balance the state budget or to pay off debt. Lawmakers worry legal questions mean they might not be able to request the money, and have been drawing up a worst-case-scenario budget if the money is not available.

Sanford argued the two sides are not that far apart, ticking off a checklist of funds that might make up the difference.

Sanford wants:

• Lawmakers to approve $270 million in cuts Sanford included in his executive budget and to spend that money on debt.

• Lawmakers to find $70 million more over the next two years and to spend it on debt.

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