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    "ocrText": "Ronald Reagan Presidential Library\nDigital Library Collections\nThis is a PDF of a folder from our textual collections.\nCollection: Reagan, Ronald: Gubernatorial Papers,\n1966-74: Press Unit\nFolder Title: Issues - Welfare (2 of 3)\nBox: P32\nTo see more digitized collections visit:\nhttps://reaganlibrary.gov/archives/digital-library\nTo see all Ronald Reagan Presidential Library inventories visit:\nhttps://reaganlibrary.gov/document-collection\nContact a reference archivist at: [email protected]\nCitation Guidelines: https://reaganlibrary.gov/citing\nNational Archives Catalogue: https://catalog.archives.gov/\nHUMAN RELATIONS AGENCY\nFOR IMMEDIATE RELEASE\nSacramento, California\nContact: Walter Barkdull\nTelephone: (916) 445-6951\nDecember 21, 1970\nThe Reagan Administration moved today to halt public welfare grants and\nMedi-Cal services to unwed, pregnant girls if their family or the child's\nfather is capable of supporting them.\nThe action would also have the effect of preventing girls who have adequate\nfinancial resources available from having abortions at public expense, often\nwithout the knowledge of their parents.\n\"Unwed pregnant minors from middle and higher income families are being\ngranted aid, often without regard to the resources of their parents or the\nprospective father\", Lucian B. Vandegrift, Secretary of the Human Relations\nAgency, said. \"Many use the Medi-Cal eligibility to secure abortions at\npublic expense.\"\n\"The State has no business providing a financial incentive for immorality,\nirresponsibility, or family breakup, nor for saddling the taxpayer with\ncosts that either the girl's family or the father of her unborn child are\nperfectly able to pay\", Vandegrift said.\n\"Neither is there any logic to making a girl eligible for welfare on grounds\nthat aid is needed to protect her unborn child in order that she may have\nthe fetus aborted at State expense\", said Vandegrift.\nVandegrift emphasized that the new policy would not affect aid or reduce\nhealth services to girls with inadequate resources.\nFormal notice was published today (December 21) that a hearing will be held\nJanuary 22, 1970 on regulations proposed to enforce the change. Meantime,\nas a first step in carrying out Administration policy, Robert Martin, State\nDirector of Social Welfare, urged all county welfare directors to begin\nimplementation of the new policy immediately.\nmore\n- 2 -\nMartin said the regulations will require the county welfare departments to:\n1. Determine who are the parents of the minor unwed mother, and who\nis the putative father of the minor unwed mother's child; and\n2. Contact the parents and the putative father; and\n3. Determine the ability of the parents and the putative father to\nprovide financial support for the minor unwed mother and for the\nchild of the minor unwed mother, respectively; and\n4. Assume the income of the parents or of the unwed father is\navailable in accordance with the ability to support, if they are\nliving with the minor unwed mother; or\nIf they are living apart and refuse to make a contribution in\naccordance with their ability, refer the situation to the\ndistrict attorney for initiation of proceeding under Penal Code\n270 which requires parents to support minor children; and\n5. Deny aid if the minor unwed mother refuses to provide information\nnecessary for the county welfare department to proceed as indicated\nabove.\nThe new approach to the problem was taken after an extended critical review\nof present welfare practices and their purported basis in law and regulation.\nIt was estimated the action would save approximately $9 million in welfare\n1971-72\nand Medi-Cal expenditures in 1970-71.\nIn the first nine months of 1970, there were 42,000 legal abortions in\nCalifornia compared with 15,340 for all of 1969. Medi-Cal has paid for\napproximately one-third of the abortions.\nthe 10110wing legislators letters SHOULD De\naddressed to the legislator at:\nWilfare\n1971\nState Capitol Building\nSacramento, Calif. 95814\nSenator George Moscone\nSenator John Holmdahl\nSenator Nicholas Petris\nSenator Alfred Alquist\nAssemblyman John Vasconcellos\nAssemblyman Carlos Bee\nAssemblyman March Fong\nAssemblyman John Dunlap\nAssemblyman Robert Crown\nAssemblyman Edwin Z 'Berg\nAssemblyman John Miller\nSenator Clark Bradley\nSenator Alan Short\nAttached are sample letters. They are short enough to write\nby hand. That is the best way. You may write the letters\nexactly, or use your own words, or better yet compose your\nown. These are simply aids. Make as much or as little use\nof them as you like But please please for the sake of\nthe patient, his family and the future of an industry of\ngreat social importance write every one of the above\nlegislators.\nTwo hours is a very small investment for an enormous amount\nof good to be accomplished.\nHonorable\nState Capitol Building\nSacramento, Calif. 95814\nDear Assemblyman\n:\nWhen you return to Sacramento in January I\nhope you take some sanity back. The Governor's War on\nWelfare is just insane. The Governor is simple minded\nif he thinks he can balance the States budget without\nFederal revenue sharing. Yet he bucks it at every level.\nFor the last four years he has fought the youth\nin this state who had no vote. Now he is attempting to\ntell us that our hearts are running away with our heads\nwhen we attempt to give mere subsistence to the elderly\nand minimum medical care to the medically indigent. This\nis a political sickness that demands your primary concern.\nSincerely,\nHonorable\nState Capitol\nSacramento, Calif. 95814\nDear Senator\n:\nOur Governor's war on welfare is a disgrace. I\ndon't think the aged, infirm and the disabled and the dis-\nadvantaged should be destroyed to give the governor a\nheadline. It is cheap politics to victimize poverty and\nmedical tragedy.\nPeople know that the Governor uses publicity to\ncover up his ignorance while exploiting the irresponsi-\nbility of taxpayers. The state has been in deficit for a\nlong time. Why make the poor and the ill pay for it, they\ndid not create it.\nMy mother recently spent a week in a hospital\nhere at about $95.00 a day. She is now in a nursing home\ncosting $17.00 a day. As a taxpayer it is clear to mo\nthat if I have to pay for indefinite care for my mother\nor somebody else's I'd much rather get it for seventeen\ndollars than ninetyfive dollars. Is that how he saves\nmoney? No wonder they are forecasting a $500 million\ndeficit for next year.\nSincerely,\nHonorable\nState Capitol Building\nSacramento, Calif. 95814\nDear Mr. Assemblyman\n:\nIt looks like Nero is fiddling while Rome is\nburning. Inflation is eating everybody up. But that\ndoes not prevent fabulous pay raises for the Governor's\nstaff, a gala inauguration binge to celebrate the fact\nthat the governor has just out off the subsistance of\nthe casualties medical and social in our society.\nI heard the other day that it costs $11,000\nto kill 8 Viet Cong. It costs about $2500 to maintain\na prisoner in a State prison and $3600 for a woman. When\nthe first dollar out of my wages is taxes, the first heir\nin my estate is taxes, and when the first duty of my\nchild is to offer his life to his country, I think you\ncan provide a man an honest opportunity to make a living,\nand guarantee his dignity when his productive days are\nover. Especially provide against medical indigence which\nNOBODY can afford.\nSincerely,\nHIGHLIGHTS OF CALIFORNIA'S WELFARE REFORM PLAN\n1971\nHow It Affects People\n0\nSeparate elderly, blind and disabled from present welfare\nstructure and instead provide automated monthly pension checks for\naged and permanently disabled similar to Social Security system.\n0\nTransfer jurisdiction for all remaining adult recipients from\nsocial worker welfare bureaucracy to the state agency which handles\nemployment services and job training projects. Able-bodied recipi-\nents will be regarded as \"temporarily unemployed,\" not permanent\nwelfare dependents.\n0\nRequire able-bodied adult welfare recipients to be either: (1)\nSeeking emplyment, (2) Training for a job or (3) Participating in\nPublic Assistance Work Force as a condition for receiving welfare.\nThose who refuse work or training will be dropped from rolls.\n0\nIncrease monthly grants to remaining welfare recipients who\nhave little or no outside income by reducing or eliminating cash\npayments to families whose earned income exceeds 150 per cent of the\nestablished minimum cost-of-living \"need\" standard.\n0\nAn estimated 65 to 75 per cent of current welfare families\nwould receive higher grants and 25 to 35 per cent with significant\noutside income would have grants reduced or eliminated.\nHow It Affects Cost and Administration\n0\nTighter eligibility standards for welfare and realistic income\nlimitations aimed at curbing abuses plus other parts of reform could\nsave estimated $566 million to $836 million per year in state,\nfederal and local property taxes.\nO\nCompletely rewrite state welfare eligibility regulations and\nlaws to assure realistic limitations on amount of other income a\nfamily would have and remain eligible for aid.\n0\nHave State assume entire cost of automated payments and admin-\nistration of pension program for elderly, blind and permanently\ndisabled. Counties would administer AFDC program, under contract\nwith State.\n0\nStreamline administration through standardized eligibility and\naudits to assure that only truly needy people get welfare.\nHow It Curbs Welfare Abuses\n0.\nClamp a realistic ceiling on spendable income a family could\nhave and remain eligible for welfare.\n0\nTerminate welfare aid to illegal aliens and non-residents.\n0\nRestrict welfare households to a single grant, closing loophole\nthat has permitted unmarried couples to receive separate combined\ngrants that are higher than total aid given to legally married couples.\n0\nImproved legal procedures to trace absent fathers whose families\nare on welfare; financial incentives to counties to collect child\nsupport payments from absent parents.\n0\nExclude from Food Stamp eligibility able-bodies adults between\n18 and 65 such as voluntarily unemployed hippies and college students\nabove junior college level.\nHow It Affects Medical Payments\n0\nMake California's Medicaid Program (Medi-Cal) more comparable\nto health benefits working citizens can afford.\n0\nMedi-Cal gives welfare recipients free two to three times greater\narray of health care benefits than average taxpayer has under his\ncompany health plan.\nExample: Medi-Cal finances more than 20 services, including complete\ndental services, chiropractic treatment, occupational therapy, podiatry,\netc., all at no cost to recipient. Typical private plan offers only\nfive to seven basic hospital and physician cost coverage and taxpayer\nusually pays at least part of total cost.\no\nReform program would require adult Medi-Cal recipients between\n21-65 to make token co-payment of $1 per doctor or dentist visit, a\nstep necessary to curb over-utilization and unnecessary costs.\no\nEstablish a level of eligibility which will assure that the\ntaxpayers' dollars will be spent to provide health care to the truly\nneedy only.\nWF\ncapsule\n1971\nAN OVERVIEW OF THE CALIFORNIA PUBLIC\nASSISTANCE REFORM PROGRAM\nIn my inaugural address to you January 4, I said that unless\nwe, as elected representatives of the people, are willing to com-\npletely reform welfare in California, our people will face a tax\nincrease every year into the future as far as anyone can see.\nThe fact is, California's welfare and health care system, which\nis nothing more than state implementation of federal programs,\nis a $3 billion moral and administrative disaster, a way of life\nwithout a goal, a road that can only lead to bankruptcy, unless\nwe have the courage to turn in another direction - before it's\ntoo late.\nEven more important, in human terms it is a tragic failure\nfor those among us who are destitute and who have nowhere else to\nturn for the most basic, minimum requirements of living. It is\nreplete with inequities that overpay the less needy who have other\nincome, while underpaying the truly needy who have none. It satis-\nfies no one - neither the taxpayer who is forced to shoulder an\never greater burden to feed its avaricious appetite, nor the person\nwho depends on it as his only source of life support.\nToday, we stand at the crossroads. We can continue to talk\nabout welfare, complain about it, watch it grow unchecked. Or,\nwe can take the steps necessary to control it and reform it SO\nthat instead of destroying our greatest resource - the people of\nCalifornia - it will maximize human dignity and salvage the\ndestitute.\nNow is the time, perhaps our last chance, to define goals and\nassign purposes of our own to this aimless, goal-less federal pro-\ngram. After doing so, we can perceive what has to be done for true\nreform.\nThe choice is clear and I ask you to join with me in making\nthis the year that we put partisanship aside and get down to the\nbusiness of controlling the monster that welfare has become.\nMore than ever before the people want welfare reformed, and\nthey have a right to expect us to do it.\nThe Goals\nToday, I am proposing for your careful consideration a program\nfor welfare reform in California.\nIts goals are simple and straight forward:\nTo increase our assistance to the truly needy who have no-\nwhere else to turn to meet their basic needs.\nTo require those who are able to work to seek work, train\nfor a job, or serve their community, if asked, as a rea-\nsonable condition for receiving welfare.\n- 1 -\nTo place Medi-Cal benefits on an equal footing with the\nhealth care benefits available to our working men and\nwomen who must pay their own health care needs them-\nselves.\nTo strengthen family responsibility as the basic element\nin our society.\nWith these goals in mind, we have adopted a two-fold plan.\nFirst, we must reduce the welfare growth rate by changes in eligi-\nbility determination and by a work and training program to move\npeople into private sector jobs. Second, we must close all possible\nlegal loopholes that lead to abuse.\nThe following message will show this to be the most sweeping\nand far-reaching program of legislative and administrative reform\never proposed in California. It will be followed shortly by\nspecific legislative proposals, at which time any further support-\ning information you may need will be supplied.\nI believe it also provides the best answer for solving the crit-\nical problems we face in welfare and Medi-Cal. Countless hours,\nover a period of six months, have gone into its formulation and\npreparation. We have gone through federal and State laws and\nregulations with a fine tooth comb, and we are convinced that our\nprograms can be implemented - assuming a constructive interpreta-\ntion of existing law and regulations by federal administrators.\nYou will note that our stated goals and purposes do not include\nfiscal savings for their own sake. However, it is a fiscally\nresponsible program. It meets the requirements of a balanced budget,\nwhile at the same time attempting to insure that, for the first\ntime in history, no California welfare family will have to subsist\nbelow the poverty level.\nWelfare's Growth\nToday, some 2.4 million Californians are receiving welfare and\nMedi-Cal benefits. Recipients fall into four major categories:\nAid to Families with Dependent Children (AFDC), Aid to Totally Dis-\nabled (ATD), Aid to Blind (AB), and Old Age Security (OAS).\nIf present laws and regulations are not changed, California's\nwelfare rolls could swell by as much as another 600,000 by July,\n1972, raising the total welfare population to roughly 3,000,000\npersons. It is definitely not a case of \"nothing ventured, nothing\ngained\". It is in fact a case of \"nothing ventured, much will be\nlost\".\nThis would mean that one in every 7 Californians would then\nbe on public assistance. No society can long endure a loss of\nthis magnitude in human resources, dignity, and morale.\nAs you know, the most rapidly proliferating program is AFDC,\nwhich now counts 1,600,000 persons on its rolls. That number will\nrise by another 550,000 persons by the end of fiscal 1971-72 if\nno reforms are adopted during the current legislative session.\n- 2 -\nThe numbers are especially staggering when you consider that\nonly ten years ago the total welfare caseload in California\namounted to only 620,000.\nCalifornia has only ten percent of America's population, yet\nwe have 16 percent of the nation's welfare cases.\nIn addition to slowing the growth of welfare and Medi-Cal\ndramatically, the reform program I am proposing will save at least\n$600 million in total federal, state, and county expenditures for\npublic assistance during fiscal 1971-72.\nIt is useless to hope that the federal government will increase\nits share of this burden in time to save us. Even the so-called\nlong range federal welfare \"reforms,\" which I oppose as being\n\"more of the same\", are hopelessly bogged down in Washington.\nWelfare's Budget\nIf the present unrealistic and inequitable laws and regulations\ngoverning California's welfare system were allowed to continue\nunchanged, based on current caseloads and costs, the state's\nshare of welfare would have to be $898 million during the coming\nfiscal year. The budget I have sent to you provides approximately\n$677 million in general fund support for this purpose. Clearly,\nif the Legislature does not act on welfare reform, our people will\nface increased taxes - not only this year, but on into the future,\nyear after year after year.\nIn addition to attaining the primary human goals listed previ-\nously, the program I propose for welfare will also save $220\nmillion of the general fund and will enable the state to operate\nwithin the amount of funds we have budgeted for 1971-72.\nLet me break it down for you into three major categories:\n$100 million would be realized from the adoption of tighter\neligibility standards to assure that only the truly needy\nreceive welfare.\n$90 million would result from the adoption of realistic\nincome limitations to assure more equitable cash welfare\ngrants for recipients with outside income.\n$30 million would come from reducing or eliminating un-\nnecessary red tape and paperwork, adopting changes in\nadministrative procedures such as increased auditing of\nabuses, requiring prior month budgeting to determine the\nsize of welfare grants, flat grant computations and\nother factors.\nA County-State Partnership\nIn the development of every facet of this reform program I have\ninsisted that these reforms cause no net shift of costs to the\nalready overburdened counties. I am confident that this will not\nhappen if the entire program is adopted.\nThe program I propose would relieve the counties of the full\nprogram costs in the AB, ATD, and OAS categories, and relieve them\nof the burden of being responsible for the administrative costs of\ndetermining eligibility and grant levels for AFDC applicants by\nshifting these costs to the state. These annual costs amount to\n$131 million, including $52 million in OAS and AB, $41 million in\nATD, and $38 million in AFDC.\nAlthough the state would assume the complete responsibility and\ncost for determining eligibility, I still believe such face-to-face\ndeterminations can best be made at the county level by people who\nare most familiar with the needs of the local community. Therefore,\nI am proposing that the day-to-day handling of this function be\nperformed by county employees, by means of contracts with the State\nDepartment of Social Welfare.\nI can think of no better or more innovative way of developing\na true partnership between the state and local governments than\nby enabling county employees to use their knowledge of the local\nscene and their dedication to the welfare of the truly needy in\nundertaking this task, with the state maintaining the financial\nsupport and providing necessary control and coordination for the\nprogram.\nIn order to partially balance the shift of these costs to the\nstate, I am proposing that the counties assume the responsibility\nfor an equal partnership in bearing the cost of AFDC grant payments\nto recipients. This will require a revision in the funding formula\nso that the counties pay 25 percent, the state 25 percent, and the\nfederal government the rest. This change in the counties' funding\nobligations will provide an incentive to them to exercise greater\ncare in controlling eligibility for the program through tighter\nscreening of AFDC applicants. The counties will thus assume an\nadditional cost of $84 million during the coming fiscal year.\nIn order to provide a more equitable balance in state-county\nshifts and to ensure that no counties will suffer a loss, we will\nphase the implementation of these shifts during 1971-72 SO that\n$92 million is assumed by the state and $84 million is assumed by\nthe counties. In effect the total cost shift to the counties\nwill be $8 million less than the expenses shifted from the counties\nto the state in 1971-72. In subsequent years the counties will\nreceive a $47 million per year benefit from these shifts. This\nnet benefit should more than offset any increased county cost\nwhich could result from possible growth in the AFDC program.\nIn addition, the counties will pick up the non-federal costs of\nproviding emergency special needs to recipients at a cost of $5\nmillion. To ease the fiscal burden on the counties, the state is\nplanning to reduce its mandated requirements for social services\nto the minimum required by federal law. This is expected to en-\nable the counties to save at least $30 million in 1971-72.\nAs a part of the overall welfare reform program, the counties\nwill assume another $13 to $33 million in expenses as the result\nof a tightened definition of those eligible for \"Aid to the Totally\nand Permanently Disabled\". In narrowing the requirements for\neligibility, some temporarily disabled persons who cannot qual-\nify under the new definition may revert to county general relief\nor the AFDC program.\n4\n$81 Million County Savings\nIn addition to the favorable balance of savings shifted to the\ncounties, they can reap at least an additional $81 million savings\nif the entire welfare program which I am proposing is adopted.\nI have on many occasions affirmed and reaffirmed the policy of\nthis Administration that we are not going to push the tax burden\nonto the counties by making \"savings\" at the state level. We have\nbeen scrupulously careful in observing this policy during the\nplanning of this program. And I sincerely hope that the counties\nwill be able to take advantage of the $81 million in additional\nsavings - through the full enactment of the program by the\nlegislature.\nA Comprehensive Work Program\nOne of the most innovative aspects of the welfare reform pro-\ngram contemplates separating potentially employable, able-bodied\nwelfare recipients from those who are non-employable because of\nage, physical handicap or other reasons.\nIf a recipient is determined to be potentially employable, he\nwill be placed under the overall jurisdiction of the State Depart-\nment of Human Resources Development and assisted in his search for\nemployment by employment-oriented HRD personnel.\nUnder the \"employables\" plan, social workers assigned to employ-\nable welfare recipients will work under the direction of HRD with\nthe primary purpose of placing these recipients in jobs. These\nsocial workers will, of course, receive retraining that will enable\nthem to effectively stress employment services in their day-to-day\ncontacts with the employable recipients assigned to them.\nIf no private or public sector job, or training opportunity is\nimmediately available to the employable recipient, he will be\nexpected to participate in public assistance work projects aimed\nat helping make California a better place in which to live. But\nparticipation in such work projects will not be a substitute for\na permanent job.\nIn sum, the public assistance work concept will not only pro-\nvide welfare recipients with an opportunity to perform a valu-\nable service to their community, but also they will receive some\ntraining along the way and get used to a job routine while await-\ning the opportunity to get off welfare completely.\nIf, after classification as an employable the recipient refuses\nto seek work, or to take an available job, or to participate in a\njob training program, or to take part in a public assistance work\nprogram, he will be ineligible for further welfare assistance.\nWe will seek appropriate administrative changes or legislation\nat the state level - and waivers at the federal level, if necessary -\nto implement the mandatory work program.\n- 5 -\nMedi-Cal Reform\nI would like to conclude this Overview by drawing your attention\nto one of the most significant and comprehensive reforms of our\nentire program.\nAs you know, ever since the state's Medi-Cal program was written\ninto law six years ago, the working men and women of California\nhave been forced to underwrite Medi-Cal's virtually unlimited scope\nof benefits - a health care program they could not afford to pro-\nvide for themselves or their families.\nBecause the serious flaws in the original structure of Medi-Cal\nhave been compounded by a caseload explosion in our welfare\nsystem, Medi-Cal costs to the taxpayers have escalated to an\nintolerable level.\nIt is grossly unfair to expect the already overburdened taxpayers\nof California to bear the brunt of Medi-Cal's excesses.\nAs you well know, anyone who gets on welfare automatically\nqualifies for the entire spectrum of Medi-Cal services. The Medi-\nCal card provides some 20 different services - every one of them\npaid for in full by the taxpayers. They are far more extensive than\nthose provided in the average health insurance plan available to\nthose not on welfare or not indigent.\nThe typical group health plan available to the average taxpayer\nand his family covers only about one-third the basic categories\nof medical services provided under Medi-Cal. And most of the\nprivate group plans require partial payment by the taxpaying\nfamily for the services they receive. Let me emphasize that this\nis above and beyond the basic premium they must pay in the first\nplace.\nBut those welfare recipients on Medi-Cal pay absolutely nothing\nfor a much broader range of services.\nTo restore fairness and equity to Medi-Cal, I will propose reforms\nin the Medi-Cal Program that will bring its benefits more closely\ninto line with those which the average citizen taxpayer can afford.\nThe first key element in this program is the provision which\nwould establish a uniform, statewide level of eligibility to assure\nthat the taxpayers' dollars are spent to provide health care to\nthose who are truly in need.\nMedi-Cal Coverage\nThere is currently a variety of health care programs for the poor.\nThe welfare-linked Medi-Cal program is the largest.\nHowever, another 800,000 indigents who do not qualify for welfare\nmust obtain their health benefits through county hospitals. Each\ncounty sets its own eligibility standards for these indigent\nrecipients and determines how much health care each one is entitled\nto. Generally, these indigent citizens are restricted to only about\none-third of the benefits available to welfare recipients.\n6\nThe Medi-Cal Reform Program I am proposing would erase this\ninequity by establishing a uniform standard of eligibility, which\nwould have to be applied equally in every county in the state.\nThe second principal element of our Medi-Cal Reform Program would\nbe the establishment of a level of health care benefits for both\nwelfare recipients and non-welfare indigents similar to those generally\navailable to the average taxpayer through private health plans.\nUnder the current Medi-Cal program, welfare recipients have\nvirtually unrestricted access to an unlimited range of services.\nBut the non-welfare indigent has very limited access to a greatly\nreduced - though reasonable -- schedule of services - despite\nthe fact that the indigent might well have a greater, far more\nlegitimate need for medical help than the Medi-Cal recipient.\nAgain, to serve the cause of fairness, I intend to seek legisla-\ntion to balance equally the scope of Medi-Cal benefits available to\nboth indigents and welfare recipients so that their benefits are\nbrought into line with those the average citizen can now afford.\nCo-Payment\nThe third major provision of our Medi-Cal Reform Program will\nrequire a recipient to exercise a degree of self-control in obtain-\ning his health care benefits.\nI will seek legislation to require that every Medi-Cal recipient -\nboth the welfare recipients and non-welfare indigents --- make a\ntoken co-payment toward the services he receives. This legislation\nwould require that each recipient would pay $1 per doctor visit,\n$1 per drug prescription received, $1 for the purchase of a pair\nof eyeglasses, and $3 per day in a hospital or nursing home.\nThe co-payment would merely be collected by the provider of the\nservice, who in turn would reduce his bill to Medi-Cal by the same\namount.\n- 7 -\nPROBLEM\n0 The present welfare system in California costs more than $3.5 billion\nin tax money each year and represents a staggering financial burden on\nthe working citizens of this state.\nO Legal loopholes mandated by Federal regulation and law have permitted\nsome families with incomes of $12,000 to $15,000 a year to remain\neligible for welfare benefits that are financed by citizens with less\nincome.\nO Some of the worst abuses involve the Aid to Families with Dependent\nChildren category of public assistance; a majority of AFDC welfare\ncases involve public support of families in which the male parent has\neither abandoned his responsibility to provide for his children or is\notherwise absent.\nO The present welfare system is a hodge-podge of confusing and sometimes\nconflicting regulations which perpetuate welfare as a way of life and\nallows outrageous abuses which are unfair both to the truly needy and\nto the taxpayer.\nSOLUTION\nO Governor Ronald Reagan has proposed a comprehensive, 70-point welfare\nreform program to completely change the direction of public assistance\nin California; key points of the program include:\nO Separating the elderly, the blind and disabled from the present\ndemeaning welfare structure and instead providing these groups with\nmonthly pension checks through an aútomated system similar to Social\nSecurity.\n-2-\n0 Treating all remaining adult welfare recipients as potentially\nemployable and requiring these able-bodied recipients to be either\nseeking a job, training for employment or participating in a Public\nAssistance Work Force as a condition for receiving welfare.\n0 Correcting the flagrant abuses of the present welfare system through\ntighter eligibility standards, eliminating red tape, and imposing a\nrealistic limitation on the amount of outside income a family might\nhave and remain eligible for aid.\n0 Enacting tough new legal steps to track absent AFDC fathers and collect\nchild support from them to reduce the tax burden on the taxpayer.\nRESULT\nO This complete overhaul of the welfare system in California will\nresult in a saving estimated at $566 million in state, federal and\nlocal taxes.\nO Governor Reagan has demonstrated rare political courage in undertaking\nthis massive effort to reform welfare.\nO He has the support of responsible working citizens of this State in\ntrying to bring welfare under control.\nSTATE OF CALIFORNIA\nWELFARE REFORM ACT OF 1971\n(Signed into law August 13, 1971)\n513 796\nELIGIBILITY FACTORS\nTreatment of Income\nThe bill eliminates the requirement under California law that a recipient\nbe allowed unlimited exemptions to his earned income for work-related\nexpenses, etc.\nIt changes a code section to require that earned income be disregarded\nonly to the extent required by federal law, rather than the former pro-\nvision that it be exempted to the maximum extent permitted by federal law.\nWork-related expenses are restricted to a flat $50 per month, plus reason-\nable and necessary costs of child care. Previously, state law placed no\ndollar limitation on work-related expenses.\nIncome Considered\nProvisions are included to require that income from interest on savings\naccounts and casual income be considered in determining eligibility and\ngrant.\nIn addition, state law will now require that all lump sum income received\nby applicants and recipients be considered as income in the month that it\nis received.\nThe new law also provides that the income of any person who has a contract\nof employment on an annual basis, but who works and receives income in\nfewer than 12 but more than 8 months must be averaged over a 12-month\nbasis for the purpose of determining eligibility.\nEligibility Determination\nThe bill also requires that eligibility must be verified through cross-\nchecking by the County Welfare Department before an applicant receives\nwelfare. Previously, an applicant was granted aid on the basis of his\nsimple declaration that he was in need. In addition, all redeterminations\nof eligibility as well as initial applications must now contain a written\ndeclaration by the recipient, under penalty of perjury, that all informa-\ntion he has given is true.\nPersonal Property Limitations\nThe bill places limitations on the amount of personal property a person\nmay own and still be considered exempt from the eligibility process. Up\nuntil now, there has been no statutory limit on any personal property\nother than cash and negotiable securities.\n-1-\nPersonal Property Limitations (Continued)\nIt allows an applicant or recipient to retain items of personal property\nup to a market value of $1,000 plus the value of wedding and engagement\nrings, family heirlooms, and clothing. Included is a limitation on furn-\nishings and other household equipment to a reasonable value.\nGRANT DETERMINATION\nMaximizing Grants\nPreviously, state law has directed those administering welfare to secure\nthe maximum amount of aid for the recipient regardless of the techniques\nused to achieve it. The new bill deletes the word \"maximum\" so that the\ndirection will be to secure the aid to which the recipient is actually\nentitled-- no more, no less.\nGrant Level\nA standard AFDC payment level (flat grant) will now allow maximum effi-\nciency in the delivery of welfare grants. In addition, the AFDC grant\npayment level has been increased to a level 30 percent higher than that\npaid prior to June of this year. AFDC recipients also will receive\nautomatic annual cost-of-living increases in grants, based on federal\nindices, beginning in 1973. Net income will be subtracted from the\npayment level instead of the standard of assistance, thus reducing grants\nto those with significant outside income.\nWELFARE WORK PROGRAM\nThe new bill provides for the establishment of a three-pronged work\nprogram.\nFirst, a job development program, set up under the State Personnel Board,\nwill develop jobs leading to permanent employment for welfare recipients.\nWork will be contracted with the State Department of Human Resources\nDevelopment under WIN (Work Incentive Program). All jobs developed will\npay the prevailing wage.\nSecond, career opportunities will be developed for under-educated, low-\nincome persons employed by the State.\nThe third portion of the work program is entitled the Public Assistance\nWork Force and requires the Department of Human Resources Development to\ndevelop and implement a plan for community work experience programs so\nthat welfare applicants and recipients may receive work experience that\nwill assist them to move into regular employment. In this program, if\nthe adult recipient refuses to accept work, training or participate in\na public assistance work force, his portion of the family's welfare grant\nwill be terminated.\n-2-\nRELATIVE'S RESPONSIBILITY\nMany provisions of the bill relate to responsibility of relatives in\ncaring for those persons who have no other source of income. These\nprovisions are broadly divided into two categories: the responsibility\nof a parent to support his or her child; the responsibility for an adult\nchild to support his or her aged parents.\nParental Responsibility to the Child\nThe bill includes the requirement that a portion of the stepfather's\nincome be used for the support of the stepchild. Since California is a\ncommunity property state, the wife's interest in the income of the hus-\nband is considered available for the support of her children. A second\nprovision dealing with collection of support monies from absent parents\nrequires that social security numbers of both parents be placed on birth\ncertificates to assist in locating the absent parent. Another provision\nallows for the enforcement of the support obligation of the absent parent\nof an AFDC child by the attachment of his or her earnings or by levying\nliens after court proceedings. In the collection of absent parent sup-\nport payments, an incentive fund will allow the counties a greater share\nof repaid or recovered monies from the collection of absent parent support.\nFor the first time the absent parent becomes legally indebted to the\ncounty for any aid paid to his children.\nAdult Child's Responsibility to Support Aged Parent\nThe bill requires that the children of a person receiving Aid to the Aged\n(OAS) support such person to the extent of their ability. In addition,\nthe bill increases the amount of support an adult child must contribute\nto the county for the support of the parent, under OAS. It changes the\ncurrent Welfare & Institutions Code OAS Relative's Responsibility scale\nto reflect the increased contributions, while also taking into consider-\nation the adult child's ability to pay.\nRESIDENCY\nResidence Requirements\nThe new bill requires that welfare be granted only to California residents\nand establishes a one-year residence requirement for recipients under the\nAFDC program. The one-year residence requirement takes affect only when\nthe unemployment rate in the county, in which the recipient resides,\nexceeds six percent. At such time, all recipients who have been in the\nstate for less than one year would no longer be eligible in that county.\nOut-of-State Recipients\nThe bill provides that the continued absence from the state by a welfare\nrecipient for a period of 60 days creates a presumption that the recipient\nintends to establish residence elsewhere and therefore is no longer eligi-\nble for aid in California. The previous system allowed a recipient to\nremain out of the state for at least one year before any action was taken.\nUnder this provision, the counties will now be required to make necessary\ninquiries of such recipients when they leave.\n-3-\nIllegal Aliens\nThis new law excludes illegal aliens from collecting welfare benefits in\nCalifornia. An alien, upon application, will receive welfare if he\ncertifies under penalty of perjury that he is in this country legally or\nholds sworn verification from two U.S. citizens of having resided in the\nUnited States for over five years. Verification of his alien status by\nthe United States Immigration Service will be required.\nPROGRAM ADMINISTRATION\nConfidentiality\nThe new law permits the inspection of state income tax records, unemploy-\nment insurance records, and county records by the State Department of\nSocial Welfare for purposes directly related to the administration of\nwelfare. These provisions will allow cross-checking to gain factual\ndata on the income status of applicants, recipients and responsible\nrelatives alike. In addition, the cross-checking will provide additional\nassistance in tracking down absent parents.\nSimplified Administration\nAnother provision allows the State Department of Social Welfare (SDSW)\nto contract with the counties, enabling SDSW to simplify and tighten\neligibility and grant determinations.\nRestitution for Underpayments, Overpayments, and Fraud\nThe bill simplifies and standardizes the amount of time for which either\na recipient or the state can reclaim errors in grant determination.\nAnother provision requires that aid paid to a recipient who later is\nproved to be ineligible must be repaid to the state. Counties are\nauthorized to pay an applicant up to $100 for immediate assistance.\nHowever, verification of the applicant's eligibility must be made within\nfive days or the county must bear the cost of such payment.\nMismanagement\nThe new law requires, rather than merely permits, counties to provide aid\nin the form of goods or services (in-kind) to recipients when a recipient\nhas mismanaged the welfare payments that he has been receiving.\nFunding of Programs\nBeginning in 1972, the State will assume 50 percent of the non-federal\nshare of county administrative costs in eligibility and grant determination.\nIn addition, the State will pay 100 percent of grant payments in the aged\nand blind programs, and 50 percent of the grant payments in the disabled\nprograms, beginning in 1972.\n-4-\nAB949\nMEDI - CAL REFORM ACT OF 1971\n(Signed into law August 13, 1971)\nEligibility\nFor the first time, about 800,000 needy Californians also will be able\nto obtain a uniform, broad spectrum of health care services under Medi-Cal.\nHeretofore, they were able to obtain limited assistance from county facil-\nities only. About 250,000 of them are under 21 years of age. This will\nbring the total under the program to more than three million persons.\nFormerly, the health care for these patients was financed with state and\ncounty dollars. Now federal financial participation will be available.\nServices\nThe bill establishes a basic schedule of benefits estimated to cover 95\npercent of health care needs. A supplemental schedule of benefits pro-\nvides for remaining \"catastrophic\" care.\nIt also institutes utilization controls based on a maximum of 24 annual\nvisits for services rendered by most health care vendors, and requires\n*departmental approval for a wide range of non-emergency services and for\nservices above normal usage.\nCo-payment\nThe new law encourages patient responsibility by requiring co-payment for\napproximately 50 percent of the beneficiaries. These beneficiaries have\ncertain resources and income which indicate their ability to meet part of\ntheir cost of health care.\nCo-payment will require $1 for each visit to a provider of health services\nand 50 cents toward the purchase of each drug prescription. This feature\nis a two-year experiment in California and is scheduled to end June 30,\n1973.\nThe bill strengthens provisions for establishment of pre-paid health plans\nunder which health care providers furnish services as a group as an alter-\nnative to the present system of unorganized fee-for-service arrangements.\nThe *department is given flexibility in developing a variety of pre-paid\nplans. Other sections of the bill provide incentives for the movement of\npatients and providers into pre-paid systems. The department would remove\ncertain payment and administrative restrictions which are placed upon\nother health care services.\nThe legislation also requires establishment of uniform accounting and\ncost reporting systems for providers of health care services to accurately\ndetermine and control Medi-Cal costs. It establishes a 17-member commis-\nsion to make recommendations to the director on:\n1. The Medi-Cal budget;\n2. Reimbursement rates for services;\n3. Proposed regulations.\nThe commission is to be composed of representatives of health care\nproviders, the public, the counties, the Legislature, affiliated\ndepartments,_and_the_consumers,\n*Department of Health Care Services\n-5-\n8-17-71\nWilfare\nJanuary 8, 1971\nMr. Jenkins:\nThe following was dictated to me, over the telephone, for your\ninformation.\n\"Since signing my final decision of January 8, 1971 in\nthis matter, I have received a telegram dated 1/8/71\nfrom Ronald Reagan, Governor of California, requesting,\non behalf of the State of California, that proceedings\nin this matter be staid pending a determination of two\ncases in the courts of the State of California. A copy\nof this telegram is attached.\nIt appearing from the requestof the State of California\nthat, although the State is yet to take any action that\nwould correct the lack of conformity with Federal require-\nments of its program of Aid to Families With Dependent\nChildren, it has taken steps to achieve such conformity\nand intends to do so if permitted as result of the final\nresolution of defending State court proceedings, I hereby\nwithdraw and rescind my final decision of January 8, 1971.\nJohn D. Twiname\nAdministrator Social and\nRehabilitation Services \"\nThe above was issued January 8, 1971.\nP.B.\nFYI\nJanuary 5, 1971 - Dictated by Lucian Vandegrift's secretary\nLetter dated\nJanuary 4, 1970\nTo: Mr. Twiname\nFrom: Robert Martin\nRegulation 44-313, maximum state participation base -- children's\nprograms, is in effect. Implementation of the regulation has\nbeen delayed by a preliminary injunction against the use of an\nequitable adjustment (California Welfare Rights Organization vs.\nMartin) and a temporary restraining order (Levine VS. Martin and Orr).\nIt is my intention to implement regulation 44-313 when I am\nlegally free to do so.\nSincerely,\nRobert Martin\nWilfare\n2 letters dicated 2-25-71 by Jane Sudderth, Washington, D.C.\nTo: Wilbur Mills, Chairman, Ways and Means\nRussell Long, Chairman, Senate Finance\nDear Mr. Chairmen:\nThe Winter Legislative Session of the National Governors\nConference does not entertain resolutions or motions of\naffirmation.\nHowever, following the breakup of yesterday's final plenary\nsession, I was able to contact individually 27 of my fellow\ngovernors. Twenty-four of them signed the attached letter to\nyou. Three of them will contact you directly. I will notify\nthe remaining 23 of this action, and afford them the opportun-\nity to join us.\nOur sense of urgency in this matter, which I know you share,\nhas dictated this unusual procedure.\nThe names and states represented by the signatories are as\nfollows:\nRichard B. Ogilvie, Illinois\nThomas J. Meskill, Connecticut\nJohn A. Love, Colorado\nStanley Hathaway, Wyoming\nCarlos Camacho, Guam\nJohn A. Burns, Hawaii\nCecil D. Andrus, Idaho\nDaniel Evans, Washington\nRussell W. Peterson, Delaware\nRobert Scott, North Carolina\nRonald Reagan, California\nJack Williams, Arizona\nTom McCall, Oregon\nEdgar D. Whitcomb, Indiana\nArch A. Moore, West Virginia\nLinwood Holton, Virginia\nRobert Ray, Iowa\nJohn West, South Carolina\nDeane C. Davis, Vermont\nMarvin Mandel, Maryland\nNelson Rockefeller, New York\nWalter Peterson, New Hampshire\nWilliam Milliken, Michigan\nFrancis Sargent, Massachusetts\n2-2-2-2-\nWe hope this expression of concern and support from the governors\nwill be of assistance to you and your committee.\nBest personal wishes,\nSincerely, RR\nCC: James Hall\nJames Crumpacker\nJerry Martin\n2-25-71\nDear Mr. Chairman:\nThe undersigned respectfully request immediate Congressional\naction to provide the governors necessary authority to cope\nwith the current and rapidly expanding crisis in the existing\nwelfare system.\nSeveral necessary reforms cannot await development of overall\nreform, namely:\n--a realistic and workable feeling on total amounts which\ncan be retained by welfare recipients under the \"thirty and a\nthird\" formula.\n--a - more effective state and local review authority to con-\ntrol eligibility determination.\nsufficient authority to implement a workable public work\nforce program for employable recipients.\n-congressional encouragement for the state to apply for,\nand the Department of Health, Education and Welfare to grant,\nthe necessary waivers to allow states enough flexibility to\nexplore solutions to present defects by instituting innovative\ndemonstration projects.\nEnclosed for your urgent consideration is a copy of the Report\nof the Committee on Human Resources of the National Governors\nConference which outlines the fiscal crisis faced by the states\nand their localities and makes specific recommendations to the\nCongress for providing desperately needed fiscal relief.\nFROM THE OFFICE OF\nMarch 15, 1971\nSENATOR CLAIR W. BURGENER (R-Rancho Santa Fe)\nRoom 5091\nIMMEDIATE RELEASE\nState Capitol Building\nSacramento, California\nContact: Bruce Gray\n916 445-3731\nSenator Clair W. Burgener (R-Rancho Santa Fe) and Assemblyman\nWilliam Campbell (R-Hacienda Heights) said today they will introduce\nlegislation to completely reform and overhaul California's welfare and\nMedi-Cal programs.\nThe Rancho Santa Fe lawmaker said he will introduce a package of\nthree welfare reform bills this afternoon. Co-authors with Senator\nBurgener are Senator Fred Marler (R-Redding) and Assembly Minority Leader\nRobert Monagan (R-Tracy).\nAssemblyman Campbell will introduce the Medi-Cal reform legislation.\nIt will be co-authored by Senator Robert Lagomarsino (R-Ventura).\nThe overall legislative program was presented to the legislature\nby Governor Ronald Reagan in a 180 page message March 3.\nThe program is designed to assure that the truly needy receive\nthe assistance and care they require at a cost the taxpayers can afford.\nThe three welfare reform bills deal with:\n1. The need to strengthen the family as the basic unit of our\nsociety, by re-establishing the basic concept---parents\nsupport of, and responsibility for, their children.\n2. The need for redirection and reform of the present welfare\nsystem.\n3. The need for accountability in the system.\nThe first two measures require a 2/3 vote for passage because of\nthe proposed assumption by the state of county costs. The third bill\nneeds a simple majority.\n-2-\nThe Medi-Cal reform legislation proposes to alter the way\nhealth care is delivered, the way it is used, and the way it is\nfinanced---under the current Medi-Cal system.\nOutlines of the bills are attached.\n###\nWELFARE REFORM LEGISLATION\nA.\nFamily Responsibility Act of 1971\n1. Absent parent\n2. Stepfather support obligation\n3. OAS Responsible Relative Scale Revision\n4. Adult child responsible for parent\n5. Property lien on estate of recipient\nive\n6. Child protection services\n7. Social Security number on birth cirtificate\nB.\nThe Fair Share Act of 1971\n(1) State to assume responsibility for ATD, AB, OAS\n(2) Establish flat grants\n(3) Work related expenses\n(4) Equitably adjust grants\n(5) Funding of special needs\n(6) Spendable income limit\n(7) Treatment of recipient income\n(8) Single grant to ATD\n(9) Inclusion of all income in determining\neligibility and grant\n(10) Lump sum payment as income\n(11) Revise maximum grant concept -- Section 10500\n(12) Income averaging\n(13) County-State formula change\n(14) Redefine totally disabled\n(15) Modified equit. apportionment for ATD\n(16) College students on aid (AFDC) Sec. 11253\n(17) Limit ownership of income producing property\n(18) Spend property reserve for special needs\n(19) Maximum limit on exempt property\n(20) Standardize eligibility requirements\nC.\nAccountability Act of 1971\n(1) Residency and aliens\n(2) Reduce period of absence from state\ndisqualifying recipient\n(3) Uniform welfare fraud penalties\n(4) Revise confidentiality statutes\nFAMILY RESPONSIBILITY ACT OF 1971\nSummary\nUnder existing law a significant amount of public assistance is\ndirectly attributable to a disintegration of family responsibility.\nFor example, in 1970 there were about 230, 000 welfare families\nwith absent parents and only about 15% of the absent parents were\nmaking a contribution to their children's support. Their total\ncontribution was $36.5 million and averaged out to about $75 per\nparent. If all absent parents contributed the same average amount,\nabout $240 million -- rather than $36.5 million -- would have been\nrealized in child support payments.\nSimilarly, significant sums are expended every year because of\nthe need to protect children from the violence or neglect of their\nparents, because of the need to provide support to aged persons\nwho have adult children with good incomes, and because of the\nneed to provide support for children who have stepfathers with\ngood incomes.\nWhile it is not possible to enforce all aspects of family responsi-\nbility by law, it is possible to provide more effective and mean-\ningful enforcement of the basic support obligation of the parent\nto the child and of the adult child to the parent.\nAnalysis of the Act\nThe effect of the Act can be most easily understood by dividing\nit into the five general areas with which it is concerned. These\nareas relate to:\n1. The absent parent,\n2. The stepfather support obligation,\n3. The adult child support obligation,\n4. Property liens on estates of recipients of aid, and\n5. Child protection services.\nThe Absent Parent\nThe bill would amend seven code sections and add one new section\nto provide for more prompt and effective enforcement of support\nobligations and to require additional information to facilitate\nlocating the absent parent. To these ends:\n1. Section 10125 of the Health and Safety Code is amended to\nrequire the social security numbers of the father and mother to be\nplaced on birth certificates.\n2. Section 11265 of the Welfare and Institutions Code is\namended to require that the certificate of eligibility now required\nfor welfare families include the name, social security number, and\npresent location of the absent parent.\nFAMILY RESPONSIBILITY ACT OF 1971\nPage 2\n3. Section 11353 of the Welfare and Institutions Code is\namended to require the absent parent to include in the statement\nnow required from him, a description of his real and personal\nproperty, an estimate of its value and his social security number.\n4. Section 11476 of the Welfare and Institutions Code is\namended to require the county departments with respect to an\nabsent parent whose location is known:\na. to, upon receipt of the application for assistance,\nimmediately serve the absent parent with notice of his\nresponsibility rather than to interview him as soon as\npossible; and\nb. upon failure to respond to the notice within five days\nor upon response, but with failure to obtain a support agree-\nment within 30 days, to refer the matter to the District\nAttorney; and\nC. to refer immediately all cases to the District Attorney\ninvolving absent parents where he so requests.\nRelated amendments would also require the development of\nappropriate forms, prompt cooperation between counties and prompt\naction by the District Attorney.\n5. Section 270 of the Penal Code is amended to add punish-\nment by imprisonment for five years to the alternatives available\nfor willful failure of a father to provide support, and language\nrelating to being out of state or failure to comply with court\norders which become unnecessary is deleted.\n6. Section 11489 is added to the Welfare and Institutions Code\nto allow enforcement of the support obligation of an absent parent\nby attachment of his earnings and to provide that a claim for\nexemption is not effective against such attachment. A conforming\namendment to Section 690.6 of the Code of Civil Procedure relatint\nto exemption from attachment is also included.\nFAMILY RESPONSIBILITY ACT OF 1971\nPage 2a\n7. The act also contains an incentive to the counties to\npursue enforcement of child support by providing that they will\nreceive 75% of the state-county share of the support money\ncollected. Under existing law they receive only 32.5% of such\nmoney.\n8. In addition, each county grand jury would annually review\nthe county's nonsupport program and the functioning of the agencies\nrelated thereto. Child support would be given priority over other\ndebts owed to creditors in dissolution and related proceedings.\nIn the conciliation court law procedures, there would be provision\nfor a financial referee and supportive staff who could work with\neach family with children for the purpose of obtaining agreement\nsubject to judicial review. Provision is made for immediate entry\nof a support order by the conciliation court on welfare cases.\nThe presence of the parents would be required at all support\nproceedings. Any document served on a parent in connection with\na child support proceeding would specify the amount of child\nsupport requested. Provision for awarding fees to the prevailing\nparty as a means for reducing capricious and vindictive petitions\nhas been incorporated. Provision is made the the court will have\ndiscretion to order the payment of reasonable attorney's fees and\ncourt costs where the District Attorney is required to enforce a\nchild support order pursuant to Section 4702 (c) of the Civil Code.\nFAMILY RESPONSIBILITY ACT OF 1971\nPage 3\nThe Stepfather Support Obligation\nExisting law provides for consideration of the stepfather's\nincome in determining the amount of the grant to a welfare family\nand refers to the stepfather's obligation of support. The U.S.\nSupreme Court, however, in Lewis V. Martin found that California\nregulations were invalid because they were in conflict with\nfederal law which allows consideration of stepfather support only\nif he is legally obligated under state law for such support or\nif he actually makes contributions. This bill would amend the\nlaw to conform it to the court's decision and to provide for\nenforcement of his obligation. To these ends:\n1. Section 11351 of the Welfare and Institutions Code is\namended to provide that eligibility for aid and the amount of\ngrant shall be based only upon actual contributions from the step-\nfather but that if a child is not receiving support, the matter\nmust be referred to the District Attorney.\n2. Section 11350.5 is added to the Welfare and Institutions\nCode to provide that the term \"parent\" as used in Section 11350,\nrelating to the authority of a county to recover assistance pay-\nments from a parent with sufficient assets, includes a stepfather.\n3. Section 11351.1 is added to the Welfare and Institutions\nCode to provide that a wife's community property interest in her\nhusband's earnings shall be liable for the support of her children --\nhis stepchildren.\n4. Section 11490 is added to the Welfare and Institutions\nCode to provide that the term \"parent\" as used in Article 7,\nrelating to the enforcement of support liability by the District\nAttorney, includes a stepparent.\nThe Adult Child Support Obligation\nAs a result of a California Supreme Court decision (County of\nSan Mateo V. Boss) adult children cannot be required to contribute\nto the support of their parents under Sections 12100 and 12101 of\nthe Welfare and Institutions Code. A change in the law is required\nto remedy this situation. Also, the existing contribution scale\nis unrealistic and should be increased. To these ends:\n1. Section 206 of the Civil Code is amended to make it clear\nthat a child has a responsibility to maintain his parents when\nin need.\nFAMILY RESPONSIBILITY ACT OF 1971\nPage 4\n2. Section 12101 of the Welfare and Institutions Code is\namended to increase the contribution scale amounts and to provide\nfor annual adjustment to reflect cost of living changes.\n3. Section 12101. 1 of the Welfare and Institutions Code is\nadded to provide that any contributions will be paid to the\ncounties as recoveries on aid granted.\nProperty Liens\nThere is no provision under existing law for recovery of money\npaid in welfare from the estate of the recipient. In fact,\nrecipients are allowed to build up various reserves in real and\npersonal property which goes to their heirs or designees. This\nbill would provide that aid granted to an OAS recipient would\nconstitute a lien on his estate. Thus:\n1. Section 11007.5 is added to the Welfare and Institutions\nCode to impose a lien upon the estate of an OAS recipient to the\namount of the aid or to the extent to which the estate exceeds\n$20,000, whichever is less.\n2. Section 11007 of the Welfare and Institutions Code is\namended to delete the provision that aid shall not constitute a\nlien upon any property of the recipient.\nChild Protection Services\nIt is necessary in some cases to provide protective services to\nchildren as a result of abuse or neglect of the parents. Existing\nlaw provides for holding financially responsible parents liable\nfor the cost of the care and maintenance of such children. There\nis doubt as to whether existing law adequately covers the period\nof time after the child is removed from the home and prior to the\nentry of a court order. Also liability should extend to all\nnecessary social services rendered the child. To these ends:\n1. Section 903 of the Welfare and Institutions Code is amended\nto make it clear that liability commences when the child is removed\nfrom the home or taken into custody.\n2. Section 903.15 is added to the Welfare and Institutions\nCode to provide that liability exists even if the court refuses to\nmake the child a ward of the court unless the court finds the\nchild was taken into custody unlawfully.\nFAMILY RESPONSIBILITY ACT OF 1971\nPage 5\n3. Section 914 of the Welfare and Institutions Code is\namended to provide that the value of social services rendered\nto the child shall be included in determining the amount of\nliability.\nMEMORANDUM Re: Provisions of Fair Share Act of 1971\nThe following is a discussion of problems within the existing welfare system\nwhich are intended to be corrected by the Fair Share Act of 1971. Reference\nwill be made to the specific changes within the act as they relate to these\nproblems.\n1) Loopholes related to recipient income.\nOne of the basic unfair characteristic of the existing welfare system is that\nit permits the disregarding of much of the income at the recipients disposal in\ndetermining eligibility and grant amount. As a result, the benefits received\nby a recipient frequently bear little relation to the resources at his disposal.\nThis means that a truly needy recipient, without financial resources in addition\nto welfare, might receive little, if any, greater welfare benefit than a similarly\nsituated recipient who might have hundreds of dollars of monthly income, and\ntherefore a much greater amount of spendable income. The following\nare proposed:\na) Amend Section 10008 to modify the provision stating that earned\nincome of a recipient shall not be considered to the maximum extent\npermitted by federal law.\nb) Repeal Sections 11009 and 11009.1 providing for the disregarding of\ncertain forms of income, and amend Section 12157 which permitted the\ndisregarding of certain casual income.\nc) The present system permits the disregarding of certain lump sum income.\nAmendments to Sections 11262 and 12657 are intended to expand the\ncategories of lump sum income required to be utilized by the recipient\nto meet his needs. Section 12052 is amended to delete the provision\n-2-\nfor considering certain lump sum income as personal property.\nd) Under the present system, with the numerous deductions and\nexemptions from gross income available to a recipient, it is\npossible to be eligible for aid even with an income of $1,000 a\nmonth. The addition of Section 11008.2 would restrict the\neligibility of any recipient if his total gross income exceeded\n150% of the standard of need for such recipient.\ne) Under the present system, a person who, because of the nature of\nthe type of his employment, is subject to seasonal unemployment,\nmight be eligible for assistance regardless of the amount of money\nearned during that portion of the year he was employed. Examples\nare teachers, members of the construction and lumbering industries,\nand cannery workers. To correct this abuse, Section 11266 is added\nto require consideration of an applicant's annual gross income.\nf) Under the present system, a recipient may deduct as \"work-related\nexpenses\" many expenses which relate to everyday living. To restrict\nsuch deductions to a reasonable level, Section 11008.1 is added to\npermit the Department to specify standard deductions for work-related\nexpenses.\n2) The present system permits a recipient to be eligibleeven if owning certain\nincome-producing property. Amendements to Sections 11151 and 11152 would\nrequire the consideration of income-producing property in determining eligibility.\n3) The present system permits a considerable value of property to be held ar\na reserve, without affecting eligibility. In addition, it permits unlimited\nownership of certain types of exempt property, such as furnishings, jewelry,\n-3-\nboats, and certain other personalty. Amendments to Sections 11154 and 11257\nwould require use of a portion of the personal or real property reserve to\nmeet nonrecurring special needs. Amendments to Sections 11155 and 11258 would\nlimit the value of property which could be excluded in determining eligibility.\n4) Sections 11403, 11451.5 and 15200 are amended to change the state-county\nAFDC participation ratio from 67.5-32.5 to 50-50.\n5) In 1965 the definition of permanent and total disability was expanded to\ninclude impairments substantially precluding the individual from engaging in\nuseful occupations within his competence. As a result, a person whose only\ndisability is social instability might receive benefits. Furthermore, a\nheavy reliance has been placed on the individual's own evaluation rather than\non medical review. An amendment to Section 13501 would return to the pre-1965\ndefinition of totally and permanently disabled.\n6) Section 10500 provides that persons administering aid shall, among other\nthings, secure for every recipient, \"the maximum amount of aid to which he is\nentitled\". When liberally construed, this has been interpreted by some persons\nas requiring presumptions in favor of increasing a recipient's aid. The amend-\nment to Section 10500 would delete the word \"maximum\".\n7) Under the present system, a family unit may be receiving aid in more than\none category. For example, the father may be disabled and receiving an ATD\ngrant, and the children qualify for an AFDC grant. When such grants are\nadministered separately, certain of the items which comprise the minimum basic\nstandard of adequate care or need may be duplicated. Section 11452.5 is added\nto prevent such duplication in determining aid grants.\n-4-\n8) Under the present system, each county performs its own independent operation\nto determine who is or is not eligible to receive public assistance. This has\nresulted in a situation where persons who might be declared eligible in one\ncounty would be ineligible in another, further resulting in recipients moving\nfrom one county to another to take advantage of a more liberal interpretation.\nAmendments to Sections 10800, 10804 and 11050 will make the State responsible\nfor the determination of eligibility, providing that the Department may contract\nwith the county for the actual performance of this function. The amendment to\nSection 11056 will require actual verification of need and determination of\neligibility.\n9) The present system provides for a limit on benefits under AFDC known as the\nmaximum participating base (MPB). This implemented by Section 11450. This act\nwill repeal the existing Section 11450 and add a new section of the same number\nto eliminate the MPB concept, and equitably apportion the total dollars available\nfor the AFDC program by applying a uniform adjustment factor to the appropriate\nminimum basic standards of adequate care in determining grants. The adjustment\nfactor would be a percentage by which appropriations meet estimated expenditures.\n10) The present system calculates the grant on the basis of a minimum standard\nof need, and in adding certain other needs called \"special needs\". Many of\nthese \"special needs\" are in fact common to the majority of needy persons. An\namendment to Section 11452 would provide, for the AFDC program, that such common\nrecurring special needs be averaged and be provided for as a flat grant. The\naddition of Sections 11452.1 and 11452.2 will provide that the counties make\ngrants for such special needs that are not common to the majority of needy\npersons, or are of a nonrecurring and unusual nature.\n-5-\n11) Sections 15201, 15202, 15203 and 15204 have been amended to provide that\nthe State assume full financial responsibility for the adult aid categories,\nthat is, the ATD, OAS, and AB programs.\n12) Under the present system, an AFDC recipient, ordinarily only eligible to\nage 18, may remain eligible for aid until age 21, if attending school. The\namendment to Section 11253 would provide for eligibility of an AFDC recipient\nstudent until leaving high school or attaining the age of 18, whichever is\nlater.\n13) The amendment to Section 13702 provides for an increased grant to ATD\nrecipients in the event funds appropriated exceed expenditures for the program.\nACCOUNTABILITY ACT OF 1971\nBILL SUMMARY\nResidency and Aliens\nCourt decisiors have invalidated state durational residence\nrequirements. An applicant for welfare only needs to indicate\nan intent to remain in California to qualify for welfare. As\na result, many aliens not legally within the United States have\napplied for and become eligible for welfare assistance.\nThe bill will ensure that only those aliens who have legally\nestablished a permanent residence in California could qualify\nfor welfare assistance, (Sec. 9)\nPeriod of Absence from State\nUnder current interpretations of residency laws it is possible\nfor public assistance recipients to leave California for extended\nperiods of time and still remain eligible for welfare aid. The\nbill provides that the continued absence of a recipient from\nCalifornia for 60 days or more (rather than one year) shall be\nprima facie evidence of his intent to have changed his residence\nto another state (Sec. 8). The bill requires counties to re-\ndetermine residence of recipients who have been continuously\nabsent from California for 30 days (Sec. 8).\nIt is also possible for a public assistance warrant mailed to a\nCalifornia address to be deposited in a California bank by some-\none other than the recipient, who may be in another state. The\nbill requires public assistance warrants to be personally\nindorsed by the recipient payee (Sec. 11).\nUniform Welfare Fraud Penalties\nThe criminal penalties for welfare fraud under present law vary\ndepending upon the program involved. In some cases the fraudulent\nobtaining of welfare funds is a misdemeanor although theft of the\nsame funds from a private agency would be a felony. The bill pro-\nvides for uniform penalties for welfare fraud similar to those\nprovided in the Penal Code for perjury, grand theft, and petty\ntheft (Secs. 7, 10, 12-18).\nBILL SUMMARY\nPage 2\nUnder current law, one method of recovering an overpayment of\naid is to adjust the recipient's grant, but only two monthly\ngrants may be adjusted in this manner. The bill (Sec. 6) would\nextend this from two months to six months and to one year in the\ncase of willful fraud. The bill includes provision for the\nrecipient's right to a hearing prior to such a reduction in aid\nand sets forth criteria for any such reduction.\nConfidentiality Laws\nExisting law does not permit welfare officials to examine tax\nrecords or the records of HRD of applicants for public assistance\nto assist in determining eligibility for aid. The bill would\npermit access to such records for the purposes indicated (Secs. 1-4).\nThe existing confidentiality law is so restrictive that counties\ncan't even obtain information from other counties about recipients.\nThis has resulted in some recipients receiving aid in more than\none county at the same time. The bill will permit welfare records\nto be released to other county welfare departments, the Department\nof Social Welfare, and other public agencies for purposes directly\nconnected with the administration of public social services (Sec. 5).\nMEDI-CAL REFORM LEGISLATION\nThis legislation proposes to alter the way health care is delivered,\nthe way it is used, and the way it is financed under Medi-Cal.\nWith these changes, we propose to broaden eligibility, place some\nresponsibility for the use of services upon those eligibles, provide\na uniform scope of benefits, increase federal matching funds, reduce\ncounty costs and attract prepaid health programs.\nELIGIBILITY\n1. Medi-Cal Reform proposes to continue to cover all Welfare cash\ngrant recipients as it has done before as well as another segment\ncalled the Medically Needy Only. This group is eligible for Welfare\nexcept that they have too much income. The Welfare categories are\nOld Age Security, Aid to the Blind, Aid to the Disabled and Aid to\nFamilies with Dependent Children.\n2. In addition, the same uniform scope of benefits proposed for\nWelfare recipients would be extended to about 800,000 poor who are\nnow eligible for varying levels of care from county or state and\ncounty-sponsored programs. This group includes about 270,000\npersons under the age of 21.\nBENEFITS\nHistorically, Medi-Cal has offered every officially-recognized\nhealth service available without restriction. The cost has doubled\nin less than five years - from $600 million to $1.2 billion.\nDuring this time, every provider of service except hospitals\n(exempt by Federal law) has been placed under some kind of fee\nlimitation. No restriction has been placed on the user.\nUnder Medi-Cal reform, these services would continue to be available\nunder separate but related plans. A basic schedule of benefits\nwould cover the vast majority of patients. For example, 65 days\nof hospitalization is proposed which statistics show would cover\n95 per cent of the need. For those with major illnesses, a\nsupplemental scope of benefits would be available. Under this\nsupplementary schedule, for example, there would be an additional\n300 days of hospital care.\n-2-\nUSER RESPONSIBILITY\nMedi-Cal Reform proposes that the user under Medi-Cal make some\ndecisions about his health needs just as taxpayers with privately-\npaid plans do. This would be accomplished in two ways:\n1. The Medi-Cal beneficiary would be allowed 24 visits yearly for\nphysician office visits, therapy and the like, with a maximum of\nfour physician visits per month and two for all other services.\nIn addition, he would be allowed two drug prescriptions per month.\nThese limits, of course, do not apply while the person is in the\nhospital where he may get laboratory and x-ray treatment as pre-\nscribed as well as medicines.\n2. Co-payment would be required where it is not prevented by\nfederal law or regulations on four services. This will give the\nuser some responsibility for health services just as many private\nhealth plans provide.\nIt would require $1 for each visit to a provider, for each pair\nof eyeglasses, for each drug prescription and $3 for each day of\nhospital or nursing home care. Of course, if it is determined that\nthe individual has no income, these token co-payments would be\neliminated.\nREFORM FINANCING\nThe basic scope of benefits for Medi-Cal recipients under Welfare\neligibility would be financed:\n1. 50 per cent with federal funds\n2. All other costs would be financed by 70 per cent state funds\nand 30 per cent county funds.\nUnder the present schedule, Medi-Cal is financed 50% by federal\nfunds, 40% by state funds and 10% by county funds. This does not\nnecessarily include the cost of health care for all of those 800, 000\nproposed to be brought under the new program. Some counties now\npay for this group entirely: others have chosen to share the cost\nwith the state.\nUnder the reform the 270,000 children's health care costs could be\nmatched by federal funds.\nFor the major illness portion of health care costs, the state and\ncounty would share the burden at a constant ratio of 70-30%\nrespectively if federal funds were not available. This method\n-3-\nwould cover the poor adults who are not eligible for welfare.\nADMINISTRATION\nMedi-Cal Reform proposes that the state establish standards, and\nadminister a basic schedule of benefits on a fee for service\nbasis.\nThe county would continue to determine eligibility and administer\nthe supplemental schedule of benefits which covers major illnesses.\nThe county would be responsible for seeing that this supplemental\nhealth care is provided on a prepaid basis -- that is, a fixed\namount for each eligible in its jurisdiction.\nThe county could act as its own prepaid health care organization\nor it could contract out any or all of the services, providing a\nchoice of three variations to the user.\nWelfam\nFOR RELEASE ON DELIVERY\nAPRIL 19, 1971\nAT 11:30 A. M., APRIL 19, 1971\nOffice of the White House Press Secretary\n(Williamsburg, Virginia)\nTHE WHITE HOUSE\nTEXT OF AN ADDRESS BY THE PRESIDENT\nREPUBLICAN GOVERNORS' CONFERENCE\nWILLIAMSBURG, VIRGINIA\nThe last time we were together we talked about revenue sharing. Our seven\nlegislative proposals for revenue sharing have now gone to the Congress, and\nI would say I am more optimistic about success now than I was then.\nRevenue sharing, when it is enacted, will go far toward alleviating the\nfinancial burdens of State and local government. But it is hardly enough to\nmake such great efforts to solve these problems on one hand, while on the\nother we pursue policies which compound the problem. I am speaking of the\npresent disastrous system of public welfare. Rising welfare costs are not\nonly placing heavier and heavier burdens on the Federal budget, they are\ncrushing our States and cities. And they will continue to do so until some-\nthing is done about it.\nWhat we need is not a tinkering with the present welfare system which would\nmerely relocate the financial disaster areas from the States and cities to\nWashington. We need an entirely new approach that will reach to the reasons\nfor soaring welfare costs, and not deal simply with the results as we are\ndoing now.\nAs you know, we have an entirely new approach in this administration's\nproposal for welfare reform which is before the Congress. I consider it\nour most urgent legislative proposal, because the welfare problem, allowed\nto run unchecked, would soon erode the benefits to be gained from reform\nin other areas. The House of Representatives has recognized its importance\nby designating it House Resolution number one. And it is going to be White\nHouse Priority number one until it is enacted.\nWe in this administration have urged welfare reform for three years. We\ndiscussed it in the 1968 campaign, and the country responded -- and I mean\nthe whole country -- not just the taxpayer who sees his money going down\nthe drain, but also many of the welfare recipients who see their lives going\ndown the drain.\nWhile we're trying to bring some order into this chaos at the Federal level,\nsome of you have moved on your own at the State level with the same purpose.\nI want especially to commend Governor Reagan and Governor Rockefeller for\ntheir efforts in this area -- for biting a bullet the entire country is going to\nhave to bite if we are going to bring the financial -- and worse, the human --\ncosts of the present welfare system under control.\nThe abuses in the system are not only unconscionable, but contagious as well.\nIt is a system which not only destroys the incentive of those who are on\nwelfare to get off it, but attacks the motivation of those who are not on\nwelfare -- the working poor -- to stay off.\n(MORE)\n- 2 -\nIt is incredible that we have allowed a system of laws under which one person\ncan be penalized for doing an honest day's work and another person can be\nrewarded for doing nothing. It can happen and does happen under the present\nsystem. The person on welfare can often have a higher income than his\nneighbor who holds a low-paying job. Tragically, these situations often\nexist in the same neighborhood, side by side in the same apartment houses --\nand the effect is corrosive. It creates bitterness on the part of the worker.\nIn the end, I suspect, it causes resignation and we end up with another\nperson on welfare.\nAt a time when we see all about us the problems of the disintegration of the\nfamily, we continue with a system that encourages family disintegration.\nA man out of work, or one struggling to support his family on a low income,\nsees that his family can have a higher income on welfare and yet he is torn\nby the knowledge that they cannot qualify as long as he is there. So he leaves.\nHis children grow up either entirely without a father, or with a father who\nsneaks in and out of the house one step ahead of the welfare worker. What\nconclusion should his children draw about the morality and the compassion\nand the justness of a system which forces their father to desert them in order\nto feed them?\nThe fact is that the welfare establishment and system in the United States\nis a monumental failure. It makes the taxpayer furious. It makes the\nwelfare recipient bitter, and it inflicts the distillation of all this anger and\nbitterness on the children who will inherit this land. It is a disgrace to the\nAmerican spirit.\nSo I do not advocate broadening welfare. I do not advocate simply refining\nthe system. I advocate a fundamental change of direction.\nI do not advocate putting more people on welfare rolls as some have\ncontended I advocate getting more people off welfare rolls. And the way\nto get them off is to provide incentives and disincentives which will make\nthem get off while providing an opportunity for people to recapture the\nsense of dignity that comes with knowing that what you have, you have earned.\nI have been guided from the outset by that principle and I reaffirm my\ncommitment to that principle now.\nI do not believe in a guaranteed annual income. I do believe in a system\nwhich insures that a man is rewarded for working and not penalized, and\nI think it is a very sensible investment to insure that that reward is there\nin order to keep people safely out of the reach of welfare.\nI advocate a system which will encourage people to take work. And that\nmeans whatever work is available. It does not mean the attitude expressed\nnot long ago at a hearing on welfare by a lady who got up and screamed:\n\"Don't talk to us about any of those menial jobs. 11 I am not sure what she\nconsiders a menial job but I have probably done quite a few in my lifetime.\nAnd I never thought they were demeaning.\nIf a job puts bread on the table and gives you the satisfaction of providing\nfor your children and lets you look everyone else in the eye, I do not think\nthat is menial. But it is just this attitude that makes others -- particularly\nlow-income workers feel somehow that certain kinds of work are demean-\ning. Scrubbing floors or emptying bed pans is not enjoyable work, but a lot\nof people do it and there is as much dignity in that as there is in any\nother work to be done in this country - including my own. In the course\nof reforming the welfare system, we have to re-establish the recognition\nof that fact.\n(MORE)\n- 3 -\nI do not think we can tolerate a system under which working people can be\nmade to feel like fools by those who will not work. To the contrary, I think\nthose who refuse to register for work and accept work or training should\nbe ineligible for welfare payments, and we have written such a stipulation\ninto our welfare reform proposal.\nIn addition, we have urged including in this proposal the language of\nSection 208 of the Social Security Act which clearly defines fraud, and\nestablishes fines and other appropriate criminal punishment for abuses of\nthe new welfare system.\nSo to those who see our present welfare reform proposal as a simple refine-\nment of the old program, let me say as strongly as I can that this is not\nthe case. We have no intention of measuring the success of this Nation's\nwelfare programs by the money spent and the number of people supported.\nWe are going to measure it by the money saved and the number of people\nwho are given back the incentive and the opportunity to support themselves.\nWe are going to measure it by the dignity it promotes, and not by the dole\nit provides.\nOne of the great strengths of America has always been that we believed\nin the value of work -- and we need a system of caring for the poor that\nrewards and encourages work.\nAnother great strength of America is that we believe in a helping hand for\nthose in genuine need. The Bible tells us that charity is the greatest virtue --\nand, by charity it means love. It blesses both the giver and the receiver.\nBut it is not charity to maintain a system which permits or encourages\nhuman beings to let die within themselves the energies, the dignity, and\nthe drive that give meaning and satisfaction to life itself.\nIt is not charity to bind human beings into a cycle of despair and dependence\nwhen with a little courage and a little imagination and a little common sense\nwe can end this cycle.\nA long time ago this Nation proudly acquired a reputation as a refuge for\nthe tired and the poor. Those \"huddled masses\" who sailed into New York\nHarbor so they might hold their heads up again have their counterparts\ntoday in slums all over this Nation -- and our task, together, is to provide\na system that will help them to raise their heads in pride and dignity a\nsystem fair to the poor, fair to the taxpayer, and true to the spirit of\nindependence that has built America and made it great.\n#\n#\n#\nWELFARE\nPress Cont.\n6-9-71\nDo you consider your program dead?\nA. No, as long as there is a welfare program working. They\nkilled mine and submitted this other. My concern was I don't\nwant to answer questions as most of the writing press has departed.\nI want it perfectly clear that his attempt to portray this\nas a compromise is not a compromise at all. It is an entirely\ndifferent concept and nothing but a bundle of band aids and will\nnot reform welfare."
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