By James Rosen | McClatchy Newspapers

WASHINGTON — White House Budget Director Peter Orszag on Monday rejected South Carolina Gov. Mark Sanford's request to use up to $700 million of his state's economic stimulus funds to pay down state government debt.

Sanford thanked the White House and said he would send the Obama administration another, "more narrowly tailored" request Tuesday to use stimulus money to reduce his state's debt.

Sanford also accused President Barack Obama of playing a "game of good cop, bad cop" by allowing the Democratic National Committee to begin Monday airing a TV ad criticizing the governor for opposing the $787 billion stimulus, which the president signed last month.

Orszag, responding to a letter Sanford sent to Obama last week, said the $787 billion stimulus bill Obama signed into law last month doesn't allow governors to use money intended for other purposes to instead make debt payments.

"During this severe economic downturn, Congress and the president wanted to provide states and localities with emergency funding in order to prevent the layoffs of teachers, police officers and other vital public servants," Orszag wrote to Sanford.

After citing two specific clauses of the stimulus law, Orszag said:

"Congress has not authorized the executive branch to waive any of the above statutory requirements governing the State Fiscal Stabilization Fund. Accordingly, states' spending . . . must satisfy the statutory requirements."

South Carolina Senate Democratic leader John C. Land III thanked Obama on Monday and accused Sanford of "playing political games while our state suffers."

South Carolina's unemployment rate is 10.4 percent, the nation's highest after Michigan.

A clause in the stimulus bill, crafted by Rep. Jim Clyburn of South Carolina, the No. 3 Democrat in the House of Representatives, authorizes legislatures to seek stimulus funding if governors fail to do so by April 3.

Republican legislators in the state's GOP-controlled General Assembly have advanced a measure to accept South Carolina's share of the stimulus money.

Clyburn praised the White House decision.

"South Carolina's needs are numerous," Clyburn said. "The American Recovery and Reinvestment Act provides sufficient flexibility for states to address those needs as they see fit. I hope the (state) legislature will move forward with plans to draw down recovery funding to meet our needs."

Sanford, who confronted Obama over the stimulus plan in a Dec. 1 meeting of the then-president-elect and 46 governors, last week became the first governor to reject some of the stimulus money. Texas Republican Gov. Rick Perry then followed suit.

"We appreciate the White House's response, as it represents a far more constructive form of dialogue than did the DNC attack ad now running in South Carolina," said Joel Sawyer, Sanford's spokesman.

"It's time for the president's game of 'good cop, bad cop' to end, and therefore we again ask him to end these ads so we can engage in a productive dialogue on the merits of our request," Sawyer said.

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