Update March 17: Sanford has remixed his request, and asked again. Go read it.
First reporting: The White House has said it cannot allow Gov. Mark Sanford to redirect $700 million in stimulus funds, as the president does not have the power to make such an exception.
Sanford had asked to use $700 million -- some 10% -- of the money South Carolina was due to receive to pay down the state's gaping deficit instead of expanding and restoring programs.
Sanford had threatened to refuse to accept that $700 million if his request was denied, but many in the state Legislature and the state's mayors were preparing to block such a move.
This story will evolve. We'll keep you posted.
Update March 17: The Post and Courier has added a full write-up and says that we can expect a revised strategy from Sanford some time today. Link.