SEIU may be linked to ultimatum on withholding stimulus funds
California officials say the union may have influenced a federal requirement that a pay cut be reversed for home healthcare workers.
By Evan Halper (LA Times)
Reporting from Sacramento -- 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.
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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.
SEIU spokeswoman Michelle Ringuette called suggestions that the union's involvement was inappropriate "absurd."
"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."
White House representatives did not respond to requests for comment.
During the conference call, state officials say, they were asked to defend the $74-million cut scheduled to take effect July 1. The cut lowers the state's maximum contribution to home health workers' pay from $12.10 per hour to $10.10.
The California officials on the call, who requested anonymity for fear of antagonizing the Obama administration, said they needed the savings to help balance the state budget.
The wages go to some 300,000 people who care for the elderly and ill in their homes. Those workers collectively pay millions of dollars in dues each month to SEIU and another union.
SEIU was among the biggest donors to President Obama's campaign, contributing $33 million. The union is also consistently among the biggest donors to Democrats in Sacramento and had aggressively fought the wage cut during state budget negotiations.
But Democratic lawmakers voted for the reduction in February as part of a budget deal they struck with Republicans, who have repeatedly targeted the multibillion-dollar home-care program.
The rapidly expanding program is intended to keep low-income elderly and disabled Californians out of nursing homes. People who qualify for the program can hire anyone they choose to take care of them, including relatives and friends.
The Obama administration has ruled that California must revoke the wage cut -- which would require a two-thirds vote of the Legislature and thus would need GOP support -- or lose $6.8 billion in federal stimulus funds.
The administration says the cut violates the terms of the stimulus money because it forces strapped local governments to make up the lost pay.
Belshe said the California program, called In Home Supportive Services, allows local governments to reduce caregiver wages if the state cuts funding.
At the direction of the state, she said, counties negotiated clauses into their labor agreements that allow them to change pay rates if state funding is reduced.
The union argues otherwise, pointing to contracts negotiated with various counties that labor leaders say prevent those counties from cutting salaries.
State Health and Human Services staffers who participated in the call said the Obama administration requested that SEIU representatives be included.The state officials said federal representatives sided with the state during the call.
But on April 30, California officials received a letter from the federal Center for Medicare and Medicaid Services informing them the wage cut must be rescinded.
Gov. Arnold Schwarzenegger has appealed to U.S. Secretary of Health and Human Services Kathleen Sebelius to overturn the ruling. The state is awaiting her decision
Urban Outfitters
This is too funny. Well, maybe now the State of California knows how businesses feel when Unions run to the state to tell businesses what to do.
1The unions backed Obama during the campaign and now they are starting to call in their chips. Of course Obama is going to force California to reverse their decision.
2As best I can tell, not all SEIU locals are in agreement on the California tax-extension propositions which come up for a vote on May 19. The state employees (Local 1000) are backing them; my local is not (I believe because of the so-called budget cap and "rainy day" fund).
However, to be fair and objective, is it fair for someone's pay to be cut because the employer's revenue stream is reduced? If the private company my husband works for has a bad quarter, should they cut his rate of pay? (His hours *do* fluctuate occasionally, but are still in the 37-40 range.)
California's budget problems are much bigger and more institutionalized than a few low-paid home health care workers.
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Conservative in exile
Washington and Sacramento: Stealing our children's futures.
Lain, if California was a business it would be in bankruptcy court. Private companies generally lay off employees in times of recession, which is why unemployment is so high. When was the last time the state of California laid of an employee?
Oh, and almost every major news paper in the nation, has cut the pay of employees, or have just completely folded. California is a microcosm of what is the future of our national government. But the Feds have the printing press, and at some point inflation is inevitable.
4lain, do not read into what I wrote, a disregard for those who are out of work, or who have to take pay cuts.
What no one has talked about yet, and what is also inevitable will be the poverty of your older population. A 40% cut in the value of the stock market, the .02% as an interest rate,where families planned on having 4%-6%, the collapse of the housing market. The house was and is probably the biggest asset most families have, and most of your older population have planned on selling the family home, once all the kids are gone, and moving into much smaller quarters, using the balance of the sales price to live on in retirement. Once we get into inflationary times those pensions we all relied on will become useless as inflation eats into the purchasing power, unless you are fortunate enough to have a federal government pension, which is indexed to inflation, they will be protected, but you will be paying for that protection, and will receive no benefit from that "investment".
5Anytime a worker has to take a pay cut, it sucks. But the alternative is to lay off some of those people to reduce the amount of money going out in wages. Neither alternative is good really, but with the pay cut, at least everyone keeps their job.
6Whether to cut the pay rate or the labor force should be up to the employees. Some organizations may be willing to do that; others not. If there's a contract in place, that means a new round of negotiations.
Personally, I think a person should be paid what their work is worth. If the state can't afford the program, they should cut back or eliminate it. I believe that furlough days and pay cuts only postpone the real problem, and I'd prefer to deal with our fiscal issues promptly and effectively. If that means a chain saw instead of a scalpel, so be it. Do you pull band-aids off slowly, or rip them off? Matter of opinion.
As for layoffs in California, my organization is losing about 200 classified (non-teaching) staff at the end of June (fiscal year). The *state* workforce has been growing, but that's only one segment of government employment.
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Conservative in exile
Washington and Sacramento: Stealing our children's futures.
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