Carter administration officials yesterday announced changes in their welfare revision plan under which the basic federal grant to needy families would be less than first proposed, but states would have a greater incentive to supplement those families' incomes.
Most welfare recipients still would gain under the proposal officials said. Whether federal this would also go up, or would stay at present level as the President has said he wants, was not clear last night.
Health, Education and Welfare Secretary Joseph A. Califano Jr. also disclosed yesterday, after a meeting with state and local government officials, that he has given up any idea of suggesting that federal housing programs and benefits be reduced in orders to finance welfare revision.
Califano's new welfare proposals wera generally welcomed by the state and local officials, but the HEW secretary emphasized that no final decisions have been made by the President on the welfare plan.
Califano's said the welfare plan should be ready before Congress leaves for its summer recess on Aug. 8 but major decisions on the financing and components of the program remain uncertain.
Among them is whether the present $5.5 billion program of "counter-cyclical" aid to states and citieentity or be folded into the jobs part of the new welfare scheme.
Mayor Lee Alexander of Syracuse, head of the U.S. Conference of Mayors, said he had been assured by the Labor Department that the counter-cylical program would be retained beyond its scheduled expiration date next year, if unemployment is over 6 per cent.
But department officials said "no decision" has been made on that question and will not be until this fall's budget reviews.
Califano said that, for the moment at least, his department envisagesBoth figures are in 1976 dollars and refer to the benefit for a family in which no adult is deemed employable.
While reducing that basic grant, Califano said, HEW would add to its previous plan a 75 per cent subsidy for state supplemental benefits up to $4,200 a year, and a 25 per cent subsidy for further state benefits sufficient to bring the family of four up to the average nonfarm family of four is $5,850, but Califano said the subsidy ceiling would vary from state to state in order to take account ofdifferences in the cost of living.
Even at the reduced $3,800 level, officials said, most welfare families wouldreceive higher benefits than they do at present, because most states do not currently provide that much.
Massachusetts Gov. Michael S. Dukakis, a Democrat, said he thought the change would help states like his own that currently pay higher-than-average welfare benefits. Other state officials said they thought many of the current low-benefit states, clustered in the South and West, would take advantage of the 75 per cent Federal subsidy to improve their benefit levels.
Califano said the alteration in the formula was not a money - saving effort, but HEW officials were unable to say with certainly last night whether the revised program could be financed with no increase in federal expenditures, as President Carter has indicated he hopes.
They said a variety of options would be given the President next week, with some "packages" involving no boost in federal expenditures and others entailing additional costs.
Under all proposals, income incentives would be provided for welfare beneficiaries to supplement their grants with jobs, and able - bodied adults not caring for small children would be required to work if employment were available.
Califano's announcement that current housing subsidies would not be folded into the welfare - revision program represented at least a temprorary victory for urban and housing advocates in an intense bureaucratic struggle.
A memorandum from the Office of Management and Budget, which became public last week, suggested the possiblity of "cashing out" many of the current housing subsidies as a way of financing the expanded federal share of the welfare bill.
Publication of the story in The Washington Post brought heavy pressure from mayors and housing industry spokesmen. Califano said yesterday that while he was still concerned about the "inequities" of some low - in - come families receiving housing benefits while most do not, that issue "will not be part of the welfare - reform proposal."
He noted, however, that the future of housing subsidies could still arise as part of this fall's budget review process.
On another point. Califano reject Sen. Daniel P. Moynihan (D.N.Y.) for an immediate $1 billion federal paymen to relieve state welfare costs. Califano said he and the President both believed that any fiscal relief should be debated as part of the welfare - revision package.