Welfare Plan Gouges State, Lawmakers Say : Legislation: California would likely receive far less federal funds for immigrant programs under reform proposal by Clinton, politicians and local officials warn.

California would pay a disproportionate share of welfare reform costs if the Clinton Administration proceeds with plans to fund new programs by reducing benefits to legal immigrants, California members of Congress and local officials warned Monday.

The still-to-be-released Administration proposal, along with competing welfare reform measures awaiting action in Congress, would divert money from benefits for low-income legal immigrants to job-training and child-care programs for all welfare recipients.

California, with its large immigrant population, receives more than 40% of federal dollars spent on immigrant programs; the state is likely to receive less than 20% of the job-training and child-care dollars.

While California has a large share of the country’s non-citizen immigrants--36%--and a large percentage of them are poor, the number of citizens on welfare are not disproportionate compared to other states.

“The money taken out of the state would be far greater than the money that would come in for increased services,” said Robert Greenstein, executive director of the Center on Budget and Policy Priorities. “California would be financing welfare reform for much of the rest of the country.”

“This could have a substantial impact on the state of California and local governments,” said Rep. Robert T. Matsui (D-Sacramento). “It’s unbelievable what may happen to L.A. County, where there are a lot of recent immigrants.”

Presidential adviser Bruce Reed, a key architect of the Administration’s welfare reform plan, said “it’s not clear that California would be a net loser” under the plan because the state would be freed from some of its obligations to support legal immigrants. The immigrants’ sponsors would be forced to make up the difference.

But California officials said they fear that the state would be overwhelmed by the numbers of indigent immigrants applying for general assistance and medical benefits if they lost federal and state aid under the Supplemental Security Income program.

“These people still have to find ways to survive,” Matsui said. “The taxpayers in California will end up paying for it.”

The SSI program provides monthly benefits of up to $446 for indigent individuals and $669 for couples who are blind, disabled or elderly and ineligible for Social Security.

The number of legal non-citizen immigrants receiving SSI assistance nationally has surged from about 128,000 in 1982 to 601,000 today. The Administration--in an effort to fulfill the President’s pledge to “end welfare as we know it” without increasing costs--is designing a plan that would limit welfare payments (primarily Aid to Families With Dependent Children) to two years and provide more job training, child care and subsidized employment to help people leave the welfare rolls.

Although it remains unclear how the program would be paid for, the most commonly discussed funding sources are a gambling tax and a reduction in SSI benefits for immigrants who have sponsors in the United States.

Matsui, an influential member of the House Ways and Means subcommittee on human resources, which will consider welfare reform legislation, said support is strong in Congress for offsetting the cost of new welfare programs by reducing or eliminating immigrants’ benefits. Although he said he opposes that option, bills introduced by House and Senate Republicans, as well as a bipartisan Senate bill introduced Monday, all would divert SSI funds to help pay their costs.

California lawmakers and officials argue that the funding mechanism unfairly punishes California for a phenomenon over which it has no control: the large number of needy immigrants who choose to live in the state.

“The federal government is abdicating its responsibility to legal immigrants,” Rep. Xavier Becerra (D-Los Angeles) said. “One of the reasons it has support in Congress is that it (the funding plan) only hurts a few states.”

The Administration proposes lengthening the period of time before elderly and disabled immigrants are eligible for SSI. One option is to make permanent a temporary provision passed by Congress last year that makes immigrants eligible after five years of residence instead of three years.

The change would provide from $2.7 billion to $6.8 billion for welfare reform during the first year, according to an Administration official, who spoke on condition of anonymity. The entire welfare reform package, which is likely to be introduced in Congress this month or next, is expected to cost between $10 billion and $13 billion for the first five years.

A bipartisan welfare reform bill introduced Monday by Sens. Tom Harkin (D-Iowa) and Christopher S. Bond (R-Mo.) would rely even more heavily than the Administration plan on cuts in immigrant benefits, likely raising the cost to California even more.

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This measure proposes considering the income of an immigrant’s sponsor when determining eligibility for Supplemental Security Income, food stamps, Aid For Families With Dependent Children and Medicaid, until that immigrant becomes a citizen.

The plan favored by most House Republicans and endorsed by a group of centrist Democrats goes much further, cutting the costs of services for legal immigrants by $5 billion annually, according to a draft estimate by the Congressional Budget Office.

Although presidential adviser Reed argued that the Administration’s proposal would not necessarily punish California disproportionately, he said that the financing plans in the competing packages would result in a significant “cost shift to the states.”

Under the House Republican plan, 520,000 legal immigrants nationwide would lose SSI benefits, 950,000 would lose Medicaid benefits, 900,000 would lose food stamps and 420,000 would be taken off AFDC rolls, according to an estimate by the Congressional Budget Office. Almost 44% of those receiving SSI benefits are in California.

California officials said the proposed funding package would be particularly unfair considering that the state’s coffers are overburdened by the heavy influx of immigrants and that its economic recovery lags far behind the rest of the country.

The cost of supporting 85,000 non-citizen immigrants in Los Angeles County who now receive AFDC would be $146 million, said Bill McFadden, chief of government relations at the Department of Public Social Services in Los Angeles County.

“We end up at the very bottom bearing the burden but we have no control over the entry of immigrants,” said Angelo Doti, director of financial assistance for the Orange County Social Services Agency.

Doti said general relief rolls and county medical costs could rise exponentially if plans proceed for funding welfare reform through cuts in legal immigrants’ benefits.

“That’s really nice that the federal government is trying to protect itself by turning off these funding spigots,” Doti added sarcastically. “But these people don’t just go away and their needs don’t just go away.”