Acting at the 11th hour, the federal government retreated Friday and approved a $40-million plan by the Deukmejian Administration to provide special help for homeless welfare families in California, state officials announced.
As a result, they said, the program, believed to be the only one of its kind in the nation, will start Monday as scheduled and benefit an estimated 30,000 homeless people who receive Aid to Families With Dependent Children.
The federal government had put the California program in jeopardy earlier by asserting that providing extra assistance to homeless welfare recipients unfairly discriminated against those who were not homeless. It threatened to withhold its 50% share of financing the plan.
As a result, state officials had been prepared to scrap the project, or at least delay its implementation beyond Monday. Meanwhile, a class-action lawsuit was filed in federal court here Tuesday against the federal Department of Health and Human Services, seeking to force federal participation.
However, at the close of business Friday, Jim Morgan, a spokesman for state Secretary of Health and Welfare Clifford Allenby, announced that the federal government had reversed itself and approved the California plan for at least one year, although state officials had sought a longer commitment.
He said local welfare offices throughout the state were being alerted and should be ready to accept applications for the aid from homeless people on Monday as scheduled.
Morgan said the federal action, negotiated both in Washington and at the federal agency's San Francisco regional headquarters, received federal approval after the California plan was "clarified."
Under the program, which includes seeking permanent housing for the homeless, qualified applicants will be entitled to $30 to $60 a day to pay for temporary shelter, as well as permanent housing payments to cover the cost of the last month's rent and other fees normally required to rent a home or apartment. Primarily affected are homeless mothers with children.
'Saw the Wisdom'
"This is good news," Morgan said. "The federal government saw the wisdom of the California plan. It was worked out in the spirit of cooperation."
The action also drew praise from Casey McKeever of the Western Center on Law and Poverty, which filed the class-action suit. However, he said he remained "disturbed that the federal government would make us go through all these needless hoops and cause as much grief and consternation among homeless families and people who work with them for no reason."
Last week, Allenby, a skilled state bureaucrat who has served under several governors, met with Health and Human Services Undersecretary Don Newman in Washington in an effort to persuade him that it was proper to provide larger grants to the homeless, in the belief that they would spend the funds to seek permanent housing.
But he said he returned with the impression that Newman and other Reagan Administration officials feared that other states would copy the California plan if it won federal approval.
Allenby reported that Newman indicated that he would reconsider the California plan if it were offered as a 3-year "demonstration project." As approved Friday, state officials said, it was scaled down to one year, a feature that attorney McKeever said bothers him.
In initially rejecting the California plan, federal officials said the permanent housing benefit ran afoul of federal regulations because rent deposits and other aid offered to the homeless would not be available to all AFDC recipients, including those who might be moving from one residence to another.
The California program for special assistance to the homeless was fashioned by the Legislature last year and signed into law by Gov. George Deukmejian as the result of a victory in the courts by welfare advocates who had sued the state.
An appellate court decision required the state to provide emergency shelter assistance as part of state-financed child welfare services to families, rather than restricting it to abused or neglected children who had been removed from their homes. Officials estimated that the cost of implementing the decision as staggering.
In a compromise that reduced the potential cost, the Administration and lawmakers reached agreement on a program that would provide benefits to the homeless under the joint state-federal Aid to Families With Dependent Children program, instead of under the state child welfare services program. The federal government pays for 50% of the AFDC benefits.