[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/06/08/sanford.mark.cnn.art.jpg caption="Gov. Mark Sanford talks to CNN's Kiran Chetry about his resistance to federal stimulus money."]

South Carolina stands to collect $2.8 billion in federal stimulus money, but the state's governor doesn't want all of it. In fact, Mark Sanford rejected $700 million. A lot of it was earmarked to go towards education and public works projects. Later today he will reluctantly sign the request for that money.

His state’s supreme court ruled Thursday he has to take the federal money. Governor Sanford spoke to Kiran Chetry on CNN’s “American Morning” Monday.

Kiran Chetry: Your state has an unemployment rate right now of 11.5%, the third-highest in the country. Also, according to some of the statistics, you have 15% of the people in South Carolina living in poverty, which is the 12th highest rate in the country. Doesn't your state desperately need all the money it can get?

Mark Sanford: Yes, but the question is in what form. I think when you look at the money that was going to come, in this case from the federal government, it came with very serious strings attached. In this case, it would have put us about a billion dollars in the hole 24 months from now. It would have prevented us making changes to the way our state government operates so we would have been on a firmer financial ground going forward. And it wouldn't have allowed us to shore up our finances in what could be a prolonged financial storm. So it came with very serious strings attached.

Chetry: You wanted to use some of that money to pay down the debt and they were not allowing you to do that?

Sanford: Yeah. We said, look, we're fourth in the nation on a per capita basis in our indebtedness. It seemed to us with this kind of windfall, and this money represents the lottery of all lottery wins for the state governments across the country, that it would be prudent to set some money aside. If a family won the lottery they wouldn't just go out and spend it all, they’d put some money aside for a rainy day, for paying down the credit card balance or paying off the mortgage and I don't know why state governments should be exempt from that same principle.

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[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/06/02/intv.steele.art.jpg caption="RNC Chairman Michael Steele blasts President Obama's GM plans as 'government intrusion.'"]

To date, General Motors and Chrysler have been given some $85 billion in taxpayers’ money and now they have to explain to Congress how they’re going to use it and eventually pay it back. Meantime, President Obama is defending the move by the federal government to step in and try to save the auto industry.

“In the midst of a deep recession and financial crisis, the collapse of these companies would have been devastating for countless Americans and done enormous damage to our economy beyond the auto industry.”

The GOP is now firing back. They have a web ad out dubbed “GM: Government Motors” and called President Obama “America's new CEO.” Republican National Committee Chair Michael Steele spoke to Kiran Chetry on CNN’s “American Morning” Tuesday.

Kiran Chetry: President Obama says he has no interest in actually running General Motors, but U.S. taxpayers now hold a 60% stake in the company. You called it a “government grab of a private company and another handout for the union cronies…” If not the president's plan, what do you think we should have done when it comes to the auto industry?

Michael Steele: I think you let happen what has happened with major corporations like GM before. They go into the market, they work out their situation in the market, they go through bankruptcy. Look. We spent $20 billion to keep them from going into bankruptcy, so I'm sitting here now and asking myself, why did we spend $20 billion if that’s ultimately where they were going to end up. Everyone stood in the doorstep…preventing GM from declaring bankruptcy six, eight, ten months ago. And now this is where we are.

So the reality for me was this is very short sighted planning by the administration, that clearly, you know, the ultimate goal was bankruptcy. So why are we doing it now as opposed to earlier in the process? Let it work itself through. Get rid of the bad assets, streamline the product, get a competitive business plan in place and go back into the marketplace very much like Harley Davidson did and very much like Chrysler did 20 years ago. And make yourself a competitive force. But this government intrusion to me is just offensive to the market.

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