INDIANAPOLIS (AP) — Democrats are denouncing Indiana Gov. Mitch Daniels for saying that the federal government sending additional money to the states is not a good idea — after he signed a letter in February asking Congress to extend enhanced payments to fund Medicaid.

But while Daniels criticized the $26 billion package that President Barack Obama signed into law on Tuesday, his spokeswoman said if the government sends more money to Indiana, the state will cash the check.

Daniels, who has left open the possibility that he might run for president in 2012, said Tuesday that he believes the government does not have the money to pay for the bill, which includes $10 billion to help prevent teacher layoffs and $16 billion for Medicaid. Daniels also said it contained “red tape” that limits states’ flexibility in spending the money.

“The passage of several months have just offered further proof this isn’t the right way to put anyone back to work where it counts, on the private sector jobs that pay the bills,” Daniels said.

Democrats say he’s being inconsistent.

“He signed a letter in support,” said Dan Parker, executive director of the Indiana Democratic Party. “For his future ambitions, he knows he has to look like he’s opposed to it. He does not want to even look like anyone who is being cooperative or working with this administration. If he’s fully against it, he shouldn’t take the money.”

Robert Schmuhl, a political science professor at the University of Notre Dame, said Daniels was in a position of talking to two different audiences — one of them Indiana voters and the other the nation to which he is a potential presidential candidate.

“He wants to present himself in a positive way to both of those audiences,” Schmuhl said. “It’s a tightrope for any office holder who might be considering a run for national office.”

Speaking on “Fox News Sunday,” Daniels had said that he did not support the legislation. He said the package would probably not help the economy and would amount to “asking the citizens of responsible states like ours to subsidize those places who have been more reckless.”

In the February letter, Daniels and 46 other governors from states and U.S. territories advocated “protecting jobs and speeding economic recovery” by extending the initial stimulus package’s enhanced federal match for Medicaid by an additional two quarters in 2011. It also said Congress should modify provisions to restore flexibility to Medicaid programs.

Being a “team player, I signed a letter with other governors,” Daniels told Indianapolis radio station WIBC on Tuesday.

“What it said was, don’t do the stimulus unless you’re going to pay for it. Don’t borrow the money from the Chinese again,” Daniels said. “And it said if you’re going to do it, don’t do it unless you’re going to drop some of these red-tape requirements that force some of the money to be misspent.”

He said the so-called savings or offsets were fictional.

“You’ve got that problem, and they’ve left all the red tape requirements in,” he said.

When told that the letter does not spell out that the enhanced Medicaid payments should not be made if they would add to the national debt, Daniels said, “They send these letters around to governors all the time. That’s the nature of the discussion I had.

“My clear recollection is saying I’d only sign a letter that says don’t add to the debt, and I thought that letter made it plain.”

Posted 8/11/2010