In response to an opinion issued by the Department of Health and Human Services, which was itself a response to a request from SEIU, the Obama administration has ruled that the State of California’s plan to cut its contribution to home care worker wages by 20 percent violates the terms of the American Recovery and Reinvestment Act (ARRA).

The California State Legislature had voted to lower the state’s contribution to its In-House Supportive Service (IHSS) program from $11.50 to $9.50 per hour because of a $40 billion budget shortfall. The wage reduction was projected to save California $74 million.

SEIU and its California affiliates, representing 250,000 home care workers, opposed the move and requested an opinion from the HHS about whether such a cut violated ARRA’s “maintenance of effort” clause. “Maintenance of effort” is a federal requirement that says federal grant recipients can only remain eligible for full funding if they maintain a certain level of state and local spending (“Obama’s Administration Sides with Union on California’s Proposed Wage Cuts,” CNS News, May 8).

HHS issued its opinion in agreement with SEIU’s position. As reported in the Los Angeles Times, California Gov. Arnold Schwarzenegger’s administration “said they were notified by senior Obama staff on May 3 that California’s plan to cut wages for home healthcare workers in the Medicaid-funded program violated the law that authorized the stimulus package” (“White House officials say no decision has been made to rescind state’s stimulus payment,” May 11).