Fed Tells California: Can’t Cut Pay of Union Jobs To Save Budget; Threatens Loss of Stimulus Money

The Obama administration threatens to rescind billions in stimulus money if Gov. Schwarzenegger and lawmakers do not restore wage cuts to unionized home healthcare workers.
By Evan Halper
The Los Angeles Times
May 8, 2009
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.

Read the rest:

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Stimulus Not About Jobs, But About Control, Payback, Punishment by Fed Government — California Lawmaker Says

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