Obama Vs. Schwarzenegger: White House Threatens To Rescind Stimulus Funds

Arnold Schwarzenegger has been one of the prominent Republican defenders of President Obama's stimulus plan. He's called the California governor "one of the great innovators of state government" and "an outstanding partner with our administration." But their relationship has hit a rough patch.

The L.A. Times reports that the Obama administration is threatening to rescind stimulus billions of dollars in federal stimulus funds if wage cuts to unionized home healthcare workers are not restored.

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 Service Employees International Union, which represents the workers, requested the opinion from Obama's Department of Health and Human Services.

"The Obama Administration has made it clear that the State cannot cut the homecare workers' wages. Now we need our counties to follow suit and take all the cuts off the table," said SEIU Executive Vice President and SEIU UHW Trustee, Eliseo Medina.

"I am glad that President Obama stood up for us," said Greg Price, a homecare worker and SEIU UHW member in Fresno County. "Now it is up to the County to stand up for workers like me."

Schwarzenegger, however, has said the state doesn't have the money.

"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 in a letter to Health and Human Services Secretary Kathleen Sebelius. He urged the administration to reconsider.

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Comments

[bert67]

For all the Californians reading this blog: VOTE NO on measures 1A-1E on the May 19 ballot. Californians cannot afford more taxes, nor to siphon money from worthwhile programs. The legislature needs to start working for Califoirnia and NOT special interests. Also, get on the bandwagon and sign the petition to "recall" Arnold. A guy from San Bernardino got enough signatures to get the measure certified to be considered to be on a ballot. Now he needs a million plus signatures to make it a reality.....
Schwarzenegger has brought California down so low. It's either HIS way or the highway - sounds like the last U.S. administration. He does things HIS way and I'm glad someone is standing up to him

[smartvoters]

The governor hates Seiu and IHSS organizations from the beginning. He kept finding the ways and attacking those organizations, but on the other hand, the governor loves and supports the powerful agencies like developmental community and regional centers because these agencies have closed connections and these agencies have supported the governor in the past and present.

In my opinion, developmental community, regional centers, and illegal aliens deserve a funding cut or funding discontinuing from the state because of waste instead IHSS workers. I support the Obama Administration involvement to stop the wage cut from IHSS workers because IHSS workers work hard without insurance coverage from state and they need a decent wage to live through a recession.

The governor obviously knows that he is not innocent. He should spell out the truth and leave his self interest and politics behind. Every voter now knows he is an actor in politics.

[utahmink]

Don't take more money from the workers. Instead, remove Prop 13 - the proposition that destroyed and bankrupted California for the benefit of the rich. Any monies should be withheld from California until they revoke prop 13.

[Burgee]

Prop 13 destroyed and bankrupted California? "For the benefit of the rich"? Put your drugs down and get real. As I recall, Prop. 13 was designed to help homeowners who faced loosing their homes due to insane Taxes. No change today. Having been a shop steward in Calif's largest union for many years, I can tell you Calif's woes are directly tied to that union as well as the state legislature, which like the US congress could care less about the country and Americans. "to help the rich"? Utter nonsense.

[Jonni Rae]

The mayor of boston is holding the teachers' unions and police unions hostage over this same issue. Unless they agree to a pay freeze, ie, abrogate their contracts which call for a raise next year, he will lay off 214 teachers in the city, and 64 police officers as well as cadets about to become police officers. Each union which has agreed to a freeze has received assurances of no lay-offs, those that have not, teachers and police, are facing lay-offs. I called Kerry's office, wrote to Recovery.gov. and the mayor. But I don't see any action. I guess the SEIU has connections. The purpose of the stimulus is to keep essential people working, not reduce their wages. I don't know but I am thinking there is not enough oversight.

[chelliza]

If they don't do something to help the middle class, rather than making them pay for all the financial problems, they will lose also. This idea that the rich create jobs so we need to keep them rich is nonsense. What creates jobs is demand. Cuts in middle class pay will reduce the demand and increase the problem. Our govenor in NV is trying to do the same thing to education workers. None of these states will come back unless their middle class comes back.

[d45]

You have to read the fine print and deal with it!

[geeegee]

hmmmm.....­.President Obama is doing this right, and the Govinater is being despicable and taking money away from the poor and disabled, shame on him! I hope Maria makes him sleep on the couch!

[sector1463]

Sorry 74 million.

[sector1463]

78 million? 6.8 billion? I think that California can find the money in the stimulus package to retain the health care workers wages. That is not a huge concession on the part of the Governor.

[berrycooda]

You can just see some of these Governors chomping at the bit for these stimulus checks.

Probably won't go to put people to work (only the politiians).
Probably most of it will be used to catch up on their own deficits because they didn't handle
the states money the way they should have.

[rjcrane]

I don't really care if the health care worker wage cuts in the CA bill to cut spending are illegal or not in order for CA to receive stimulus money, This one smells fishy to me because Obama certainly didn't care about protecting the wages of UAW workers even after they already made huge concessions. Does Obama really want CA to give back this money when the state is already facing even more serious budget problems even with the recent bill that had a hard time getting passed by one vote and may not get approved by the electorate? You can only play hardball like this until someone finally calls your bluff and that's what Arnold should do now.

RJ Crane, topplebush.com

[barbarica]

I think it's great. Still singing his praises, Arnold?

[flossophy]

Obama is a soft lovable fasc|st... do what he says or he'll not give you your stimulus allowance.

[ippanja]

I was wondering where Karl Rove was hinding.

[heartofdrakn]

Better a soft lovable f@scist than the cruel iron fisted f@scists of the republicans we had for 8 years.

[Vixter]

Our family is facing the same situation as millions of others in the U.S. - diagnosis of first stage Alzheimer's for my father, with my 85 yr old mother being his sole caretaker at this time. We are going to be in the same situation with mother very shortly - why not, they have been married for 65 yrs, so their illness seems to coincide. Our family is very lucky in the fact that there are 5 adult children, who are acting as 'overseers' at this time. Who knows when, or how soon, we will be looking for home health services so that they can stay in the same home that they have lived in for 25 yrs.

I am amazed by the amount of rethug input on this site. Don't folks realize that they have a good chance of facing the very same realities that I do,,, or don't they care. I do not want to have to worry that the home nurse we hire is going to be too tired to take care of my parents.

Where were all these nay sayers when Ronnie-baby axed the air traffic controllers? Oh yea, that was union busting so that's O-K, right?

[MacQ]

I think it's an established fact that only democrats have problems, or have ever faced any of life's unfairness.

As for reagan's air trafic controller, hard to see your point. The people who thought that was a good idea are likely to think it's a bad idea for Obama to try to control a state in order to ay his union dues.

[kwijibo]

By what reasoning does the Obama Administration reckon that California can balance the books by NOT cutting back?

Obama will never survive this one if he cuts off the stimulus money to California. He could try and blame Schwarzenegger but we all already know Schwarzenegger won't be re-elected next year anyway. Besides, the politicall­y-powerful Rep. Pelosi and Sens. Feinstein and Boxer would never let Obama get away with it.

What are the options? Schwarzenegger can cave, in which case the state will still be broke. Or, Schwarzenegger can stand behind the cutbacks in which case Obama will lose, irreparably, the political goodwill of Californians and their congressional delegation. The only votes he'd get in 2012 in California would be from the service employees union. Pelosi, Feinstein and Boxer would have an uphill battle getting re-elected.

Who has more to lose politically, Schwarzenegger or Obama? Clearly, it's Obama and everyone in politics knows it. Either way, the people of California will be the real ones losing.

There is a way out, though. California can tax Hollywood at 70%. Hollywood's all patriots. They know it's patriotic to pay taxes. They won't mind.

[jgale04]

you must be joking, right? CA not behind a leading, powerful democrat? Do you seriously think CA is going to not support Obama and alternatively, back some pupet from the dying opposing party after he forces the State to provide some adequate health care?

You are clearly not from California.

[Jaradan]

LOL! That's right. (Written by a born and raised Californian)

Newsom for Governor 2010