California accuses Obama of allowing SEIU dictate stimulus policy

posted at 1:36 pm on May 11, 2009 by Ed Morrissey
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Only a couple of months ago, these two titans of politics embraced each other on the dais.  Arnold Schwarzenegger pronounced Barack Obama’s intellect and philosophy “beautiful,” and Obama called the Governator an “innovator” in return.  Some of us wondered whether they’d get a room, politically speaking, but as it turns out, there have been allegations of cheating in this romance.  Schwarzenegger’s administration accused the Obama White House of sharing confidences with another sweetheart when it assumed their couple counseling session would remain private.

Can’t someone get these two kids together again?

Officials in the governor’s office say a politically powerful union may have had inappropriate influence over the Obama administration’s decision to withhold billions of dollars in federal stimulus money from California if the state does not reverse a scheduled wage cut for the labor group’s workers.

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.

It has become clear that the Obama administration has exerted influence on behalf of Big Labor in every setting it can.  They forced Chrysler bondholders to acquiesce to a scheme where they got 30 cents on the dollar, while the UAW wound up with a majority of Chrysler despite owning no stake in Chrysler beforehand.  They’re pushing a similar deal with GM, using the TARP money to dictate an outcome for the unions that would have made no economic sense at all in a regular bankruptcy proceeding.

If California’s allegations are correct, however, this is even more of a blatant payoff for the Obama labor constituency.  The SEIU should have had no place in negotiations between California and the White House on stimulus spending.  Their inclusion makes the stimulus bill an explicit political patronage slush fund, given to those states who dance to the White House tune.

Actually, that’s not entirely accurate.  It’s the Labor tune to which they’ll have to dance, and everyone else who comes into contact with the Obama White House.  It’s the Chicago Way instead of the Beltway these days.  If Arnold wants to hang out with the “beautiful” people, he’d better learn the new rules.

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