Some pretty embarrassing chatter has come to light in recent days, better illuminating the new relationship between the state of California and the new federal leadership. This month, it was alleged that the Obama administration threatened to withhold nearly $7 billion in federal funding, that otherwise was supposed to go to California as part of the federal stimulus program, to help pay for medical costs attached to Medicaid.

As is stands, the state had faced a project budget deficit of $42 billion at the bleakest point, in February, before a tentative budget balancing deal was agreed upon. Now, the projected cash shortfall has risen to over $20 billion. While that is going on, the Service Employees International Union, is apparently griping over $2 per hour.

The murky situation appears to hinge on two factors: first, legislators in the state of California proposed cutting $74 million from home health care workers' maximum salaries (per hour) as part of a complex plan to balance the budget; secondly, that at some point, the union serving those employees, the Service Employees International Union, is accused of putting pressure on the federal government to withhold certain federal funding dollars (ostensibly to the tune of $6.8 billion) until the salary caps were removed. The alleged phone call between White House officials, California officials and SEIU officials, is said to have taken place on April 15. Flash forward more than a month later, and whether or not the state will receive those federal dollars... is still unknown.

According to the Los Angeles Times, signals have been mixed, at best, from the president's staff. The LA Times writes that "state officials said they had explicitly been told. Gov. Arnold Schwarzenegger's administration said they were notified by senior Obama staff on May 3 that California's plan to cut wages for unionized home healthcare workers violated the law that authorized the stimulus package."

It gets even murkier. SEIU officials are not even trying to hide their interconnectedness with the big guy. In a May interview in the Las Vegas Sun, the president of the SEIU, Andy Stern, stated that his union pumped more than $60 million into the effort to back Barack Obama's bid for the presidency. If this doesn't create confusion, or a clear conflict of interest, then nothing will.

According to the Wall Street Journal, officials in California had "agreed to... wage cuts for unionized home health-care workers. The Service Employees International Union huffed to the higher power in Washington, which duly agreed to hold California's stimulus hostage. Governor Schwarzenegger has sent a letter asking the feds to reconsider."

Bottom line: the state of California is in a fiscal mess, and every dollar counts. With the expected rejection of the six May 19 ballot initiatives (some to "save" money by shuffling around funds, one to raise taxes), voters in the Golden State are making it clear that wasteful and ineffective governing is unacceptable. Having a powerful union stepping in and dictating how millions of taxpayer dollars should be spent (to help their employees, and damn the fate of the rest of taxpayers) and whether or not federal dollars should reach California, should be just as disgust-inciting, as any other irresponsible move meant to adversely affect state residents.

Blocking $6.8 billion, and all over $2.00 less per hour, per employee... it makes you think. Perhaps the SEIU should offer to pay any state workers who lose their jobs as a result of the funding freeze, as the SEIU appears to believe the difference between a little over $12 per hour and a little over $10 per hour, is so vital, particularly in this economy.