Posted by MataHarley on 11 May, 2009 at 1:51 pm. 25 comments already!


I meant to post on this over the weekend as I read about this first on Friday… naturally (bury the big news in the weekend, eh?)

But once again – as Mike’s A pointed out with the auto makers – Obama is flexing his muscles on behalf of the unions. And in this case, Arnie, the guvernator, is finding his diminutive stature eyeball to belly button with Obama over a renegotation with the SEIU service employees union. And right now, Arnie’s not got the wind at his back because Obama’s holding the stimulus funds hostage.

The short story? Schwarzenegger and state lawmakers approved cuts in the state’s contribution to SEIU unionized home healthcare workers in February as part of the budget. The Obama admin says “no way…”. Reinstate their wages, or no stimulus money…. Why? It violates provisions in Obama’s simulus program, ARRA.

Schwarzenegger’s office was advised this week by federal health officials that the wage reduction, which will save California $74 million, violates provisions of the American Recovery and Reinvestment Act. Failure to revoke the scheduled wage cut before it takes effect July 1 could cost California $6.8 billion in stimulus money, according to state officials.


The wages at issue involve workers who care for some 440,000 low-income disabled and elderly Californians. The workers, who collectively contribute millions of dollars in dues each month to the influential Service Employees International Union and the United Domestic Workers, will see the state’s contribution to their wages cut from a maximum of $12.10 per hour to a maximum of $10.10.

The SEIU said in a statement that it had asked the Obama administration for the ruling.

Naturally it was a bitterly partisan battle last winter – with compromises finally achieved – centered around cutting back the rapidly expanding and costly In Home Supportive Services program.

…the average IHSS recipient will go from having 37 hours of domestic and related services to 30.4 hours per month, and their total services will be reduced from 86.6 hours to 80 hours per month.

The link above gives the arguments pro and con as to whether the cuts actually achieve the desired savings. Then again, as we see with today’s news that the WH is again wrong with their budget math, it’s hardly surprising that proponents and opposition would want to debate their figures… eventually showing that probably none of them are correct. But California, in a severe cash crisis and said to be out of money by July, desperately needs to find workable cuts.

Obama, along with Pelosi and Reid, have taken California’s ability to make cuts with this union off the table with their simulus legislation. In addition, it’s forcing California Republicans, who championed the reductions, to cooperate with the Obama admin’s demand the wages be reinstated. To do otherwise puts a GOP face on the loss of stimulus funds. In other words, political blackmail is still alive and well… regardless of the logic of state budget reductions.

Reversing the wage cut would require a two-thirds vote of the Legislature, meaning Republican support would be needed.

Schwarzenegger on Wednesday sent U.S. Secretary of Health and Human Services Kathleen Sebelius a letter urging the federal government to reconsider.

“Neither the Legislature nor I make decisions to reduce wages or benefits lightly, but only as a last resort in response to an unprecedented fiscal crisis,” Schwarzenegger wrote.

Now that you have some background, today’s news from the LA Times is that some officials in Arnie’s office are saying the SEIU may have had “inappropriate influence” over the Obama administration’s decision to hold the stimulus hostage.

The officials say they are particularly troubled that the Service Employees International Union, which lobbied the federal government to step in, was included in a conference call in which state and federal officials reviewed the wage cut and the terms of the stimulus package.

California Secretary of Health and Human Services Kim Belshe said she could not recall another instance in which the federal government invited a significant stakeholder group into such government-to-government negotiations.

“The involvement of a stakeholder in this kind of state-federal deliberative process is unusual at best,” she said. “This was really atypical and outside any norm I am familiar with.”

In addition to several state and federal officials, participants in the April 15 conference call included an SEIU associate general counsel in Washington, a lobbyist for SEIU in California and a representative from SEIU’s policy staff in California, according to a list provided by the Schwarzenegger administration.

I’m sure it will come as no surprise to hear that SEIU spokeswoman, Michelle Ringuette, calls these accusations “absurd” and that, in fact, they were merely pointing out that the California legislature was not in compliance with law.

“We lobbied the Obama administration to get the stimulus money to California as quickly as possible, and we pointed out when the state considered action in violation” of the terms for receiving those funds, she said. “We make no apology . . . for expecting the Schwarzenegger administration to obey the law.”

So far, the Obama admin is mum on the issue… another surprise, eh?

It should be noted that the SEIU contributed $33 mil to the Obama campaign. Not beholding there… nah.

This will, no doubt, fuel heated emotions and misstatements about those who will be victims as a result of the cuts. But in days when everyone is tightening their belt, can in-house care still be achieved with a few less hours a week, and with those providing the service accepting less state contributions to their wages?

Well… the auto workers agreed to it. But perhaps that was because Obama orchestrated that wage reduction. Apparently, when his union buds call for help, he’s not so inclined to allow the California government officials that same power.

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