Texas Gov. Who Refused Stimulus Funds Asks for Loan

Earlier this year, Texas Governor Rick Perry was one of a handful of Republican governors who refused some federal stimulus funds from President Obama's economic recovery package on the grounds that there were too many strings attached to the money.

Now that the state is dire straits, however, Perry is asking the federal government for a loan to cover the very expenses the rejected stimulus money would have paid for.

While Perry accepted most of the roughly $17 billion in stimulus funds allocated for Texas, the governor in March rejected $555 million that would have covered state unemployment benefits. Perry said he was not accepting the money because the state would have been obligated to expand its unemployment coverage, creating too much of a long term tax burden.

At the time, Texas Workforce Commission Chairman Tom Pauken reportedly said the state's unemployment compensation trust fund could be operating at a deficit by October. Now that the state's unemployment funds are depleting faster than expected, the governor is asking for a $170 million loan from the federal government, News 8 Austin reports.

"This is nothing out of the ordinary," Perry reportedly said. "We're following protocol that we put in place."

Democratic legislators in Texas are speaking out against the governor's actions.

"That $555 million would that would have come with the stimulus money wouldn't have to be paid back to the federal government, and that would have saved business taxpayers money for the next 20 years," said Democratic State Rep. Mark Strama, according to News 8 Austin.