Economy

Feds say California can cut pay for home-healthcare workers

WASHINGTON -- Gov. Arnold Schwarzenegger said Wednesday that the federal government has ruled the state did not violate the law by cutting pay for home-healthcare workers earlier this year.

Schwarzenegger made the announcement in Washington after meeting privately with Health and Human Services Secretary Kathleen Sebelius.

In a letter to Schwarzenegger, the department said the state remains eligible to receive another $8 billion in stimulus money for its Medicaid program.

Last month, the Obama administration said the state may have violated the new federal stimulus law by cutting the state's contribution of pay for unionized home-healthcare workers from a maximum of $12.10 to $10.10 per hour.

Schwarzenegger said the federal government was satisfied that the state did not violate the law after he cleared up "confusions" with Sebelius.

"We are very happy to report that they will bring to California the billions of dollars that were promised through the economic stimulus package, and as I said I'll be fighting for every dollar for California," Schwarzenegger told reporters.

Schwarzenegger said the money will be "very important" as the state sets out to resolve a $21.3 billion funding shortfall.

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