Joseph A. Califano Jr., the Secretary of Health, Education and Welfare, said yesterday that he disagreed with his department's suggestion that President Carter could help finance welfare revision by a kind of "tax" on families living in federally subsidized housing.
Califano told the convention of the National Urban League that he had advised Carter against reducing welfare payments 10 to 15 per cent for beneficiaries who also receive housing assistance.
"The Washington Post says I've got my greedy paws out for some of HUD's money," Califano said, referring to the funds that the Department of Housing and Urban Development uses to subsidize low-income tenants. "I should note that doesn't happen to be the case."
Red Granum, the deputy White House press secretary, said the "tax" proposal "is contained in one of the options before the President, but it is not an option recommended by Secretary Califano."
The text of the relevant portion of Califano's memo was obtained late yesterday by The Washington Post. It showed that the secretary argued that the merits favored the "tax" proposal but poltical considerations might make it imprudent to adopt.
Califano said "there are strong arguments of equity for providing lower cash assistance benefits to subsidized housing occupants than to those who do not receive housing subsidies." He said a 15 per cent "tax" on their welfare payments could provide "an additional $450 million for welfare reform."
But then he added: "My best political judgment is that the misery is not worth the fight, as I told the New Coalition [of governors and local officials] and the press last week. But some of your advisers do not agree with me. On the merits, most [except HUD] would impute something as a matter of equity."
Imputation is the technical term for reducing cash benefits for those receiving housing subsidies, whether through such "taxes" or other means.
When Califano was asked why he included in his memo to the President a proposal with which he personally disagreed, he said: "The President has charged me with the task of preparing a welfare reform program and if I am to serve the President properly, it is my function to make certain that he sees the important options in welfare reform, whether I happen to agree with them or not."
HUD officials, still nervous that some of their programs may be sacrificed to meet Carter's goal of a welfare package that entails no higher federal spending, had a different interpretation of the incident.
One senior HUD official said that having promised mayors and governors last week "that there wouldn't be a housing aspect to the welfare-reform proposal. I would think it is incumbent on Califano to formally say he's against the proposal."
"But," he continued, "it's laid out in such detail and the arguments art so well put forth that it's hard to believe it wasn't laid out for a reason."
Califano has publicly raised the question of why some poor families are receiving government housing subisidies while others, equally poor, are not.But he told mayors and governors last week that he had come to the conclusion that the place to deal with that question was in the fiscal 1979 budget reviews - and not in the welfare plan.
However, the Office of Management and Budget has also raised the issue of equity in housing aid and suggested in a memo two weeks ago that substantial funds could be transferred from housing to welfare revision in order to meet Carter's budget goal.
The more limited proposal outlined in Califano's memo to the President would reduce welfare payments to tenants of 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 it lived in subsidized housing.
The President is to meet with aides this afternoon on the issue, with his welfare proposals scheduled to go to Congress next week.