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May 21, 2009

Obama Backtracks on Threat to California

By Clarice Feldman

It seemed outrageous when Obama threatened to deny California stimulus funds if it reduced SEIU member health care workers' wages, and , indeed, that threat seems to have only been empty posturing, according to Peter Nicholas of the LA Times:

The Obama administration has backed off its threat to withhold billions of dollars in stimulus money from California, telling Gov. Arnold Schwarzenegger the state did not violate federal law in cutting pay for home healthcare workers in a bid to help balance the budget. In a letter that was given to the governor this morning, the U.S. Department of Health and Human Services said the state remains eligible to receive another $8 billion in stimulus money for its Medicaid program, a ruling that may offer some solace for state officials coping with the resounding voter defeat Tuesday of five ballot measures aimed at closing California's huge budget shortfall.
Is the LA Times story about the walk back, suggesting that if California voters had agreed to the proposed tax increases, the threat would have been followed through on?
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