SC's Lindsey Graham contends that gov may control stimulus cash that lawmakers want to spend

State legislators may not be able to trump governors who are reluctant to spend federal stimulus money, according to a government report made public Wednesday that suggests congressional stimulus legislation could violate the Constitution.

The report by the nonpartisan Congressional Research Service raises the possibility that a provision in the congressional stimulus bill written to allow state lawmakers to spend federal money over the objections of their governors violates the 10th amendment.

"This is a very difficult constitutional issue," said Sen. Lindsey Graham, a Republican and lawyer from South Carolina who released the report. "What I am trying to do is put the conflict on the table."

It's especially pertinent in South Carolina, a state saddled by high unemployment and budget cuts, where Gov. Mark Sanford has become a leading critic of federal bailouts. Sanford, head of the Republican Governors Association, is lobbying to use the $700 million portion of stimulus cash over which he has first say on state debt.

The White House denied his first request for a waiver earlier this week. A second request, to spend most of the money on school construction debt, is pending.

South Carolina state lawmakers have voted to use the money even if Sanford does not, believing they are authorized by a provision in the stimulus legislation inserted by South Carolina Rep. James Clyburn. Clyburn, the No. 3 Democrat in the House, inserted the language with Sanford's anti-bailout stance in mind.

But the report says the Clyburn provision is ambiguous and could violate the amendment that gives states government powers not spelled out in the Constitution.

Graham voted against the stimulus, but says he believes the state should take the money if it's a choice between the dollars going to South Carolina or somewhere else. A day earlier, South Carolina's education chief said that without the money, layoffs and vacant school jobs in the state will jeopardize public education.

Graham told reporters he is raising the issue because the precedent could be far-reaching and said he has written the White House for clarification.

"Could the federal government bypass the governor and create a legal situation where the Legislature would become the voice of our application? Does that violate the 10th amendment?" Graham said. "These are very serious issues."

The report points to two U.S. Supreme Court cases in the 1990s that declared Congress could not "commandeer" a state legislature under the 10th Amendment.

The report also raises several questions about how the provision allows a legislature to take control of the money, since the governor must apply for some of the funds even after the legislature approves it.

Still, the report says that Congress may not have intended to substantially alter a government process.

"It does not appear likely that it was intended to significantly reallocate powers between a state legislature and a state executive branch," it says of the Clyburn language.

Clyburn challenged Graham to challenge the law in court.

"I strongly disagree with his narrow, and I believe, erroneous interpretation of the law," Clyburn said in a statement. "The intent of the law is clear and unambiguous and I find nothing in the Congressional Research Service report which questions that intent. Anyone with constitutional concerns should raise them in a court of competent jurisdiction."

Sanford spokesman Joel Sawyer said the governor will wait for the Obama administration's response to Graham.

"The CRS report raises more questions than it answers," he said.

The governor, a potential candidate for president in 2012, has won praise from conservatives for his strong stand on the stimulus dollars.

In all, South Carolina gets about $2.8 billion in federal stimulus money over two years, and Sanford has the first shot at control over only a portion. State House lawmakers have already made plans for it, salting $1 billion in stimulus money into the $6.6 billion budget being crafted for next year, using it to restore cuts made this year as tax revenues slumped.