Now this is a federal intervention I can believe in:

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….

The SEIU said in a statement that it had asked the Obama administration for the ruling.

Combined with the CFT lawsuit this action shows a new aggressiveness coming from progressive unions, and is precisely the right strategy to take against those who would demand or accede to the economically insane policy of wage cuts for these workers. The failure of the May 19 election proves the failure of an accommodationist strategy – Republican demands for government destruction can only be countered through strong pushback.

This is also a welcome step from the federal government, which did not have to make this ruling. It would be nice if DC would get even more aggressive about oversight of the stimulus money. The education stimulus, for example, ought to have been conditioned on states refusing to layoff teachers or cut education budgets.

By demanding this federal ruling, and by suing over the Prop 98 funds, SEIU and CFT have done far more to help prevent crippling budget cuts than the millions spent by CTA and other progressive organizations trying in vain to convince Californians to accept a bad deal that will make the budget situation worse, not better.