The Department of Health, Education and Welfare has suggested to President Carter that he consider imposing a special kind of "tax" on welfare recipients who live in federally subsidized housing.
The proposal has revived a controversy that seemed ended last week when HEW Secretary Joseph A. Califano Jr. said he would not try to cut back housing subsidies in order to finance welfare reform.
The new plan is the latest in HEW's continuing attempts to find money for improved national welfare payments while obeying Carter's edict to spend an extra federal dollars. Carter's welfare revision package is scheduled to be announced on Aug. 4.
According to administration sources, the proposal Califano sent the White House yesterday would reduce welfare payments to tenants in federally subsidized housing between 10 and 15 per cent.
A family of four receiving a guaranteed annual benefit of $3,800, for example, would be cut back between $380 and $570 if they lived in subsidized housing.
Unhappy Housing and Urban Developments officials say the plan would "penalize" some poor families and force them out of subsidized housing to seek slum housing on their own.
The plan was characterized by one top HUD official as "robbing the poor to pay the poor." Another said, "If enough people left those housing projects, we'd have a lot of defaults on our hands."
HUD officials estimate that 3 million families live in subsidized housing and that some 35 to 50 per cent - 1 million to 1.5 million - would be affected by the housing tax. These families are concentrated in urban centers in the Northeast, according to HUD experts.
Officials of the Office of Management and Budget contend that today's $4.9 million in federal housing subsidues benefits only 8 per cent of eligible such benefits. Given Carter's insistence in holding down federal spending, they argue that it is fair to "tax" the people in subsidized housing to help pay for improved benefits for all welfare families.
Drafts of the welfare revision plan arrived at the White House yesterday and intensive staff work was under way in preparation for a meeting Thursday at which Carter is expected to make at least some of the final decisions among the choices presented to him.
Officials said Califano had suggested a proposal which "came close" to meetind the no-additional-costs standard Carter had suggested. But cost estimate were still being tested againt various economic assumptions for fiscal 1981, the earliest year in which they said any welfare revision plan could be put in place.
The officials said that Califano also suggested a variety of options for improving the basic plan, if Carter decided to relax his stricture against higher initial costs for the program.