Families Teeter at Edge of Uncertain Safety Net : Aid: For Buena Park’s Silva family, Wilson’s plan for a 25% cut in payments would make it ‘impossible’ for them to get by.

Barely six months ago, newlyweds Art and Lynette Silva envisioned a bright future as a young couple with a good job, a secure home and a loving family.

The loving family of four remains intact. But the job is gone--Silva was laid off just a few months after he was hired at a San Bernardino County warehouse--and the security has dwindled.

They left the home they had been renting from relatives to move to Orange County in search of work and wound up temporarily homeless. With meager prospects, the Silvas were eventually forced to sell their aging car to buy diapers and other essentials. Silva had only his bicycle to hunt for work.

Receiving offers of only menial, minimum-wage jobs, the family’s situation spiraled downward, leaving Silva with just one choice.

The family now subsists on a monthly welfare grant of $780.

With their benefits from Aid to Families with Dependent Children (AFDC) already stretched thin--$550 of their monthly benefit goes to rent--the Silvas and thousands of families like them in California are now faced with yet another daunting problem: how to survive on $200 a month less in welfare benefits.

“Impossible,” said Silva, 23, shaking his head. “We barely have enough for rent now, with only a little left over. We’d be pinched even more. What would we do?”

The prospects of less aid and hard new choices is one that will be faced by each of Orange County’s 87,000 welfare recipients if sweeping cutbacks proposed by Gov. Pete Wilson are approved for the November state ballot.

The most far-reaching attempt to reduce welfare costs in the state in nearly a decade would impose an across-the-board 25% cut in AFDC benefits; establish stricter residency requirements for aid; set a maximum monthly family grant, and offer benefit incentives to teen-age AFDC recipients to stay in school and live at home with their parents.

The proposals have created a firestorm of controversy, provoking a debate about how best to save money during a time of budgetary restraint, while still providing a safety net for the state’s neediest residents.

The debate has swept other states as well, leading to dramatic welfare overhauls, most recently in New Jersey and Michigan. Many believe that the outcome in California could determine national trends for the next decade.

Governor Sees Costs Spiraling Out of Control

The Wilson Administration contends that welfare costs are spiraling out of control and that the state soon will not be able to pay for the soaring levels of service. Spending for AFDC--the state’s largest welfare program, with more then 2.3 million recipients--is expected to top $2.8 billion this year, a 14.5% increase over last year.

“Open-ended entitlement programs are on a path to exhaust the resources necessary to keep the California dream alive for its 30 million residents,” Wilson said in December when introducing his welfare package.

Opponents say figures used to support the Administration’s position are misleading. They point out that California’s AFDC spending represents just 6.5% of the state’s $43-billion general fund and cite a recent study by the bipartisan Commission on State Finance, concluding that estimates of growth for the state’s welfare caseload are greatly exaggerated.

More important, critics said, the proposals are punitive because they would affect children most and could lead to increased homelessness and other social miseries.

“What the governor is doing is creating enemies, the enemy being low-income people,” said Patricia Whitney-Wise, executive director of the California Coalition of Churches, a Sacramento-based agency representing 18 Protestant denominations that oppose the initiative. “He is playing on people’s fears.”

Ironically, the initiative has fashioned an unlikely alliance between social activists and some abortion opponents, who believe that elements of the plan could lead to an increase in abortions among poor women and teen-agers.

While the most immediate goal is to save money, no one is quite sure what broader impacts would be likely or if, in fact, the changes would reduce welfare rolls.

The only certainty is that every welfare family in the state would have to contend with sharply reduced monthly benefits.

One Problem: High Cost of Living in Orange County

The Silvas have tried to imagine what that would be like, especially in Orange County, where they have found a much higher cost of living than in their previous home in Colton.

There, the Silvas’ monthly expenses totaled about $900, including $400 a month for a two-bedroom house rented from a relative, plus water, gas and electric and phone bills, food, and car insurance.

Even then, Silva earned $7.48 an hour in his job, and he had to work 10- to 12-hour days to get by.

“It was hard,” said Lynette Silva, 19. “But at least we had enough left over for a pizza on Fridays and sodas for the kids.”

Now, Silva is faced with deciding whether to accept jobs that pay little more than minimum wage or continue on public assistance. But, he asked: “Who on earth can work at McDonald’s if you’ve got a family to feed?”

“I had never been on welfare before I walked into that office with my kids, and it was embarrassing,” he said, sitting in the small living room of their Buena Park apartment scattered with unpacked moving boxes, an unadorned mattress and two scampering youngsters. “But I had to do it for my family.”

Despite their predicament, the Silvas think they will eventually get by. Sooner or later, a job will come through for Silva and perhaps an opportunity for both to go back to school. But they worry about what the future holds should Wilson’s welfare measures be adopted.

“What it is is forcing people to get off welfare,” Silva said. “It can only lead to more homeless people, more people desperate, more crimes. If people are hungry, they’ll do anything to feed their families.”

The Silvas speak from personal experience. After Silva was laid off from his job as a cabinetmaker and his unemployment benefits ran out, the family was homeless for several weeks, bumming couches from friends and even visiting a homeless shelter before deciding that it was not a fit place to rear children--even temporarily.

Eventually, the couple got emergency aid from the county for hotel lodging and money to place a deposit on their apartment. The ordeal was enough to raise the specter of desperation, Silva said.

Among experts, there is disagreement about the long-term impact of Wilson’s plan, in part because there is no real precedent for analyzing the carrot-and-stick approach. Critics said that may be reason enough to challenge the proposals.

“In general, we have a very strange approach to the development of social policy in the U.S.,” said Leonard Schneiderman, dean of the School of Social Welfare at UCLA, “and that is to go from an idea to full implementation, with very little intermediate testing of policy.”

Schneiderman said while Wilson’s goal of reducing welfare rolls is sound, the approach contains many flaws. The state, in effect, is taking the position that welfare recipients must be forced into the job market, that people are comfortable on welfare and do not really want to work, he said.

That represents a fundamental shift in California’s social policy, Schneiderman said.

One of the mainstays of Wilson’s position is that there are few incentives to move off AFDC. Wilson Administration officials said wages for a family of three would need to top $1,400 a month to make moving off AFDC economically advantageous, whereas minimum wage pays about $737 a month for full-time work.

AFDC grants are distributed on a sliding scale, based on the number of family members. A family of two, for example, receives $535 a month, a family of five $899 and a family of 10 gets $1,403.

“Many of these people have never been tied to the work force in the first place,” said state Health and Welfare Agency spokeswoman Kassy Perry. “Without work incentives built into the system, there is nothing to encourage them to move back into employment.”

Poverty Experts Wary of Emphasis on Work Incentives

To encourage that employment, the governor’s package would revamp the welfare jobs program Greater Avenues to Independence (GAIN) by emphasizing vocational training rather than education, but the plan includes no funding increase for the program.

About $15 million would be spent to establish a “jobs club”-- workshops that AFDC recipients could attend voluntarily to learn how to complete job applications, improve interview skills and search for jobs.

In addition, $4 million would be spent to post job opportunities available through the state’s Employment Development Department at county welfare offices.

State officials said these cutbacks reaffirm the original intent of the AFDC program as a transitional stop on the road to self-sufficiency.

On the contrary, “reducing incomes for poor families translates into an inability to pay for essential needs and thus means further homelessness, hunger and hardship,” said Casey S. McKeever, an attorney with the Western Center on Law and Poverty Inc. in Sacramento.

Suspension of cost-of-living adjustments and a 4.4% welfare cut last year resulted in a 13.4% drop in the value of AFDC grants since 1989, McKeever said. Even with food stamps, a typical California welfare family’s income is 14% below the U.S. poverty level.

The proposal also fails to account for the high cost of living in California, critics said. Fair-market rent for a two-bedroom apartment, for example, is $900 in Orange County but $804 in Los Angeles and $711 in San Diego.

Many also question the impact of work incentives for an AFDC population that consists primarily of female heads of households whose job prospects are traditionally far dimmer than for men.

Schneiderman, who spent five months of a recent sabbatical as a welfare caseworker, said repercussions of Wilson’s proposed measures--good and bad--will ultimately fall on children, who make up 70% of welfare caseloads.

The biggest financial burden may trickle down to county governments in such areas as higher crime rates, increased administrative costs, expanding jail costs and higher levels of emergency health care--for both physical and mental needs. Orange County officials said they are trying to determine what the local impacts would be.

The proposals have caused debate within the state County Welfare Directors Assn., which is considering what stand to take.

“My association has an interest in making sure we are fully reimbursed for implementing” the proposals, said Frank Mecca, the group’s executive director. “There could be some significant costs to local welfare programs.

“We’re also in the process of studying the public policy issues,” he said. “While the governor is trying to create work incentives, there is a large concern that people will have grants reduced at a time that even our government is describing as the longest and deepest recession since the Great Depression.”

Orange County Legal Aid lawyer Crystal Simms agreed.

“It’s ridiculous to think these people can go out and find a job in six months, especially in this economic climate,” Simms said.

For the Silvas, the debate can be reduced to a simple, familiar adage: “Walk a mile in my shoes.”

“If the politicians were at our level, there’s no way they would cut back” benefits, Silva said. “To live it is . . . a whole different thing.”

Types of Welfare Programs Welfare is an all-encompassing term used to describe public assistance; however, there are four different welfare programs. They are: * Aid to Families with Dependent Children (AFDC): A cash assistance program for families with needy children. Families are eligible when one or both parents are absent, disabled, deceased, unemployed or working fewer than 100 hours a month. The program is administered by the county, but eligibility is set by state and federal laws. * Food stamps: Provides low-income families with redeemable coupons to supplement food purchases. The amount of food stamps depends on the total income and number of people in a household. Requirements are set by the federal government. * Medi-Cal: A state-administered program paying health care costs for those who receive public assistance cash grants such as AFDC, as well as those eligible only for medical assistance. * General relief: Funded by the county for eligible residents who do not qualify for any other public assistance. The program is mandated by the state. Source: Orange County Social Services Agency

AFDC Growth Aid to Families With Dependent Children (AFDC), the state’s major welfare program, have increased more rapidly in Orange County than it has throughout California during the past five fiscal years. Average cases per month O.C. increase 1987-’91: 54% Expenditures Per Year O.C. increase 1987-’91: 68% Statewide increase: 40%

The Silvas’ Monthly Budget Art and Lynette Silva and their two children receive an AFDC grant of $780 and food stamps worth $170 each month. Their largest expense, rent for their Buena Park apartment, consumes 70% of their AFDC grant. A typical monthly budget: Income AFDC grant: $780 Food stamps: $170Total: $950 Expenditures Rent: $550 Food: $200 Transportation: $80 Utilities: $70 Other: $50 Source: the Silvas

Wilson Welfare Reform Plan Gov. Pete Wilson has proposed a November ballot initiative that would bring about a sweeping overhaul of the state’s welfare system. Major provisions include: * Grant reductions: Grant levels in Aid to Families With Dependent Children would initially be reduced by 10%. After six months, they would be reduced an additional 15% for families with an able-bodied adult continuing on aid. * Maximum family grant: Benefits would not increase for additional children born to mothers on aid. * Residency requirement: Families living in California for less than 12 months would be eligible for aid based on the amount they would have received from their last state of residence. * Work incentive: Welfare recipients would be able to earn more income and still remain eligible for aid. * Teen pregnancy disincentive: Unwed teen-agers would receive aid only if they remain at home. Payments would be made directly to parents or guardians. * Cal Learn: A $50-per-month cash incentive would be provided to teen-age welfare recipients who remain in school. Dropouts would have their grants reduced by $50. Source: California Health and Welfare Agency

AFDC by the Numbers The costs and average monthly caseload of the Aid to Families With Dependent Children program have steadily increased in both Orange County and the state during the last five years. Average Monthly Caseload: 1991 Orange County: 27,823 Statewide: 706,510 Annual Cost: 1991 Orange County (in millions): $230 Statewide (in billions): $5.2 Average Costs The average monthly cost per AFDC case dipped in the fiscal year ending June 30, 1991, both in Orange County and statewide, after a three-year upward trend. The county average, however, remained higher than the statewide average. 1991 Orange County: $689 Statewide: $612 County Costs Although most of the cost of the AFDC program is borne by the state and federal governments, each county must foot a small percentage of the total payments. Orange County’s contribution increased 74% between the fiscal year ending June 30, 1987, and the end of fiscal 1991. 1991 (In millions): $13.8 AFDC Ethnic Composition In January, the most recent month for which information is available, most AFDC recipients in Orange County were either Latino or white. Latino: 38% White: 32% Vietnamese: 19% Black: 5% Cambodian: 2% Others: 4% Source: Orange County Social Services Administration, state Department of Social Services