Earlier, in writing about California’s fiscal meltdown, I noted that Barack Obama has threatened the state with a suspension of its stimulus funds, on which Sacramento depended for its budgetary calculations. The story behind that threat is worth pursuing. In attempting to bridge a huge shortfall, the state lowered compensation to for home health care workers, saving $74 million. Obama wants those cuts rescinded, and it’s not hard to see why:
Reporting from Sacramento — The Obama administration is threatening to rescind billions of dollars in federal stimulus money if Gov. Arnold Schwarzenegger and state lawmakers do not restore wage cuts to unionized home healthcare workers approved in February as part of the budget.
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.
In other words, Obama has unleashed his inner “madman” in the exact same cause he did with Chrysler and GM bondholders. He’s doing it to support the unions. The SEIU appealed directly to Obama, as the LA Times reports, when the budget cuts hit. Rather than rely on California to determine its own compensation plan, Obama simply threatened them with economic ruin if they didn’t fall into line. I’m surprised he didn’t threaten to sic the White House press corps on Arnold Schwarzenegger.
The irony here is that Sacramento is doing the exact same thing to its own citizens. With most of them poised to shoot down higher taxes and more spending in a series of referendums next week, Schwarzenegger has published his intent to close firehouses and police stations, and to empty prisons and let convicts free on the streets. That “madman theory” gets around, doesn’t it?
This should make clear Obama’s prioritie as President. He couldn’t care less about California defaulting or automakers going under, but a $2/hr pay cut for 400,000 union workers is the center of his universe. I’d suggest changing “Hail to the Chief” to “Look for the Union Label,” but Obama would probably approve it.