THE GOVERNOR'S 1996 BUDGET : Wilson Presents Major Welfare Reform Plan Emphasizing Work

TIMES STAFF WRITER

Finally, Gov. Pete Wilson has revealed just what welfare would look like if he could essentially do what he wants.

It is a plan that scraps the state's largest anti-poverty program, Aid to Families With Dependent Children. In its place, the governor suggests four substitutes designed to better match the state's various programs with the needs of modern welfare recipients.

Wilson said Wednesday that he designed the plan to eliminate major flaws he attributes to the current system: disincentives for marriage and work, welfare dependency and "autopilot" spending increases.

"The goal will be helping people to find work . . . and learn the dignity and self-esteem that goes with seeing their name on a paycheck they earned," Wilson said. "Those people who aren't yet prepared to work will get help. . . . And for those able to work who won't, their full grant will last just six months."

This is the plan that Wilson and his advisors designed from scratch, after years of proposing incremental reforms. Implementation of this far-reaching plan assumes not only approval by the Legislature but also President Clinton's signature on legislation to grant states far more authority to operate their own welfare systems.

Millions of dollars in the budget Wilson proposed Wednesday are contingent on Washington's approval of sweeping welfare reform by summer. Clinton vetoed such a bill Tuesday, complaining that it does not go far enough to protect children, move adults into the work force or provide health coverage.

But in California, Wilson's administration hopes that its welfare proposal will debunk Clinton's argument that, given the chance, states would shirk their responsibility to the poor.

"What we've done here is a statement to the president and the Democrats that a Republican governor's welfare plan is not a race to the bottom," said Eloise Anderson, director of the state Department of Social Services. "We are thinking about the well-being of children."

Wilson officials said their premise in launching welfare reform was to create a transitional system that will move adults into the work force as rapidly as possible. It was inspired partly by Riverside County's success with an aggressive effort to find jobs--even temporary assignments at minimum wage--for its welfare recipients.

As a result, Wilson's plan breaks down the pool of welfare recipients into four categories:

Ready to Work Program: For those who are currently working but still eligible for welfare, or have recent work experience. The program would focus on rapid reemployment by providing assistance such as resume writing and interview techniques. Cash grants would be phased out over two years.

Family Transition Assistance Program: For cases in which a parent has never worked or has a need for extensive training. The program would replace cash assistance with vouchers because officials said that recipients with drug or alcohol problems would be placed in this category. The duration of the assistance would be based on the amount of time required to prepare the recipient for employment--not to exceed five years.

Disability Family Assistance Program: For cases in which a parent or child is disabled. It offers cash aid as long as the recipient remains unemployable due to the disability. In some cases, the aid would be provided for life.

Child Only Program: For cases in which the parents are ineligible for aid and assistance is needed for a child. For example, this program would include illegal immigrant parents whose child is a U.S. citizen by birth.

State officials said they have not yet determined the grant levels that the programs would provide or the income levels that would make people eligible for assistance.

The Legislature has already cut welfare assistance by more than 20% since Wilson took office. On Wednesday, the governor proposed an additional 4.5% cut in the next fiscal year. He also said he will ask legislators to avert an automatic 13% increase that will take effect next year if new legislation is not passed.

Democratic reaction to Wilson's plan was muted Wednesday. Legislators complained about his plan to give more money to the wealthy with a tax cut and less to the poor. They also declined to engage in the debate until Washington approves a welfare reform plan.

But if the Legislature is assigned the task of designing a new welfare system from scratch, legislators promised that the debate would be profound and spirited.

"It's a battle between the haves and the have-nots," said state Sen. Diane Watson (D-Los Angeles), chairwoman of the Senate Health and Human Services Committee. "It's as simple as that."

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Budget Highlights

Gov. Pete Wilson has proposed a $61.5-billion state budget, and here are some of the major points:

* TAXES: A 15% cut in personal income and corporate tax rates over three years.

* SCHOOLS: Public schools get 3.3% increase; nearly 40 cents out of every general fund dollar going to elementary and high school education.

* HIGHER EDUCATION: Budget increased by average 4.3% and student tuition frozen.

* WELFARE: Cash grants to families with dependent children cut 4.5%. No reductions in SSI disability payments.

* PRISONS: Prison budget increased 10.8% to meet growing inmate population.

* HEALTH: Medi-Cal costs rise 2.8%, primarily because of more elderly and disabled people receiving aid.

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