Obama Administration Says No Final Decision Made on Stimulus Funds
On Monday, the Obama administration said it has not finalized a decision on whether a budget provision that reduced California's contribution to wages for home health workers will jeopardize $6.8 billion in federal economic stimulus funds, the Los Angeles Times reports (Nicholas/Halper, Los Angeles Times, 5/11).
In the state budget agreement approved in February, lawmakers approved reducing the state's contribution to wages for workers in the In-Home Supportive Services Program from $12.10 per hour to $10.10 per hour.
The cut is scheduled to take effect July 1 (California Healthline, 5/11).Â It is projected to save California $74 million in fiscal year 2009-2010.
On Monday, HHS spokesperson Nick Papas said, "No final determination has been made. We are continuing to work closely with the state of California, and a legal review of the requirements of the Recovery Act (the stimulus law) with respect to this issue is ongoing."
In response, California Health and Human Services Agency Secretary Kim BelshÃ© said, "We are encouraged the decision isn't final," adding, "We have received mixed signals from Washington. The process has been quite unusual."
California officials said an April 30 letter from the Obama administration indicated that the state would not be eligible for the stimulus funds unless the state rescinded the wage cut for IHSS workers.
An Obama administration official said Monday that the letter was sent "inadvertently."
Spotlight on SEIU
According to the Times, the situation has drawn concerns about the Service Employees International Union's influence on the Obama administration.Â SEIU officials asked the Obama administration to investigate whether the wage cuts violated provisions of the stimulus package and participated in a conference call with federal and state officials on the issue.
SEIU opposed the cuts, which will affect unionized home health care workers.
Speaking on the condition of anonymity, an Obama administration official said SEIU was included in the call with the aim of creating a dialogue "and in the interest of time and efficiency."
No one in the Obama administration would discuss the matter on the record, the Times reports (Los Angeles Times, 5/11).
- Los Angeles Times : SEIU's assertion that the wage cuts violate a provision of the federal stimulus package that bars states from reducing their health care spending "at counties' expense" is "unreasonable, and Washington should drop its threat to rescind the extra Medicaid dollars," a Times editorial states (Los Angeles Times, 5/12).
- Sacramento Bee : The governor "is right to appeal" the Obama administration's statements on the stimulus funding, and "he should take it to the president if necessary," according to a Bee editorial. "That Obama's people acted after entreaties from SEIU smacks of the very kind of special interest politics that the president campaigned against last year," the editorial states (Sacramento Bee, 5/12).
- San Diego Union-Tribune : Beyond concerns about fraud in IHSS and the California budget process, a Union-Tribune editorial maintains that the Obama administration's actions raise questions about its "use of stimulus funds as a tool of coercion." The editorial concludes, "Whatâs gone on to date isn't just disappointing and disturbing. It's scandalous" (San Diego Union-Tribune, 5/12).