If there was any doubt about labor’s influence, look west to the state of California’s troubles. Officials in Governor Schwarzenegger’s administration say that the SEIU may have had inappropriate influence over the Obama Administration’s decision to withhold stimulus funds for California if the Governor did not undo a scheduled wage cut for workers who are part of the SEIU.

Officials from the Schwarzenegger administration said that they were troubled that the SEIU was included in a conference call between federal and state officials, who were reviewing the wage cut and stimulus funding. The SEIU had lobbied the federal government to intervene.

The state’s health and human services secretary, Kim Belshe, expressed concern over the Obama Administration inviting a siginificant stakeholder into federal-state government negotiatons. According to a list provided by California officials, participants in the conference call included an SEIU lawyer from Washington, D.C. and a California-based SEIU lobbyist and policy staffer.

As part of its budget deal, California legislators agreed to cut $74 million in wages for home health workers. That cut would lower the pay for home health workers – members of the SEIU – by two dollars an hour. The Obama Administration ruled that California must rescind the wage cut or lose $6.8 billion in stimulus funds. Undoing the wage cuts will require a two-thirds vote in the state legislature, which The Wall Street Journal compared to “moving the Sierra Nevadas.”