County to Give Cash Instead of Food Stamps : Aid: The innovative program, being hailed as a national model, is designed to save money and boost self-esteem.

In an innovative program designed to save money and increase the self-esteem of food stamp recipients, San Diego County will begin distributing cash instead of coupons Sept. 1, county officials said Monday.

Called a “full cash-out implementation,” the program is being hailed by county, state and federal officials as a model for national welfare reform, said officials familiar with the plan.

Board of Supervisors Chairman Leon Williams and other officials said that giving food stamp clients cash instead of coupons will reduce program costs while increasing the recipients’ self-esteem.

They said they expect no more fraud than under the current food stamp program, which has spawned a black market in which the coupons trade for less than their face value. Under the new system, recipients will need proper identification to cash the checks issued by the county.

According to the county Department of Social Services, 46,000 households and about 139,000 people receive food stamp assistance in San Diego County, the fifth most populous in the United States. The county proposed the ambitious plan to state and federal officials last year and initiated a pilot program involving 20% of the county’s food stamp clients in July, 1989.

The pilot program was a huge success, Williams said, and the county received the federal government’s approval to expand the program to include all food stamp households.

An official announcement is expected today by federal, state and county authorities.

County officials familiar with the plan say it will save $600,000 in administrative costs at the state, county and federal levels between September and next July, when the new fiscal year begins. The cost of the food stamp program in the county, now about $67 million a year, is funded entirely by the U.S. Department of Agriculture.

By mailing food stamp clients a monthly check instead of coupons, the county saves thousands of dollars in postage for the 590,000 food stamp packets it mails each year. In addition, the county will be able to close its food stamp issuance center and will no longer have to pay an armored transport company to handle the coupons.

“The pilot program was such an overwhelming success last year. We projected a savings of $86,000 but saved $150,000 instead,” said a county official who asked not to be named before the announcement planned for today.

This source and others predicted that the new cash-out program will become a model for the rest of the country, much like the workfare program, which also originated in San Diego County in the 1970s. Under workfare, adults able to work are required to perform some sort of public service in order to receive benefits.

“Workfare was a pioneer program that was eventually adopted by the state and federal governments. A lot of people predict the cash-out program will eventually go the same way as workfare,” the county official said.

Supervisor Williams and other officials said that giving food stamp clients cash instead of coupons will reduce cost while increasing the recipients’ self-esteem.

“Food stamps put a person at a disadvantage. It’s a put-down and a humiliating thing to have food stamps in a grocery line,” Williams, who championed the cash-out program, said in a telephone interview. “ . . . You have to take away factors that diminish a person. You have to give a person back his or her dignity.”

Some critics within the Social Services Department have warned that giving food stamp recipients cash instead of coupons might lead to more abuse of the program and eventually increase its cost.

Legally, food stamp coupons can be used only to purchase food, not liquor, cigarettes or other non-food items. A cash-only program will make it impossible to monitor how the money is being used, said one Social Services employee, who did not want to be identified.

However, Williams and other county sources said they are confident that the cash-out program will not be abused.

“I don’t see where giving them food stamps instead of cash is any protection to society,” Williams said. “Anybody can abuse their resources. . . . Some people were (so) humiliated at having to use stamps that they would sell them for 50 cents on the dollar to get cash to buy groceries.”

“There have always been abuses,” said another county source. “ . . . Now there are no strings attached. But we’re confident that most people, the overwhelming majority, will use the cash honorably. Just like they used the food stamp coupons honorably. We have confidence in them.”