President Carter asked Congress today to scrap the basis components of the nation's welfare system and replace them with a new $30.7 billion program of income supplements, work incentives and public service jobs.
Unveiling his welfare proposals, the President said he had concluded that the existing system "is too helpless to be cured by minor modifications.
"We must make a complete and clean break with the past," he said.
To accomplish that, Carter proposed abolishing the nation's three basic welfare programs - aid to families with depedent children, supplemental security income to the aged, the blind and the disabled, and food stamps.
In their place, he proposed a complex system at the heart of which would be two new basic welfare payments - an income supplement for the aged, blind, disabled and single-parent families with young children, and a work benefit, tied to work requirements and other incentives, for other poor people.
The President's proposals, contrary to his earlier statements on the subject, would increase the federal government's cost of welfare. The $30.7 billion in expenditures would be $4.4 billion more than the $26.3 billion the government now spends for welfare each year.
Officials of the Department of Health, Education and Welfare calculated the net increase in cost to be $2.8 billion, arguing the proposals would also result in some savings to the government, for example from lower unemployment compensation benefits and increased Social Security tax collections as more welfare recipients go to work.
In addition to the $30.7 billion the plan would cost the government $3.3 billion more because of a change in the earned income tax credit, raising the total price tag to $34 billion.This money was not included in the cost calculations, HEW officials said, because it would go to people who already earn enough to pay income taxes.
The President, who initially ordered HEW to devise a new welfare system with no increase in spending, defended the proposed increase, saying it will make possible "important improvements in our original plan."
This program will ot be incompatible with that dream to balance the budget," by 1981, Carter said.
His propals are bound to be controversial and their passage in Congress is by no means assured. But the President said he was encouraged by House Speaker Thomas P. (Tip) O'Neil Jr.'s decision to appoint a special committee to handle the legislation - a technique that was successful with the administration's energy program in the House - and to set a deadline for House action on the proposals of next spring.
Even with relatively early congressional action, Carter said, the new welfare system would be fully implemented until late 1980.
The basic components of the President's plan are the income support and work benefit payments. The principal difference between them is that income support payments are designed for people who are not required to work for various reasons, while the work benefit payments would be earmarked to supplement the income of people who can work.
Under the income support payment
The basic benefit for a family of four with no other income would be $4,200. Benefits would be reduced by 50 cents for each dollar the family earned ending when earned income reached $8,400 a year.
Benefits for the aged, blind, or disabled would be $2,500 for an indivual and $3,750 for a couple.Benefits would be reduced by 50 cents for each dollar of income, ending at $5,000 income for a couple. Those eligible for the income support payments would be the aged, blind, disabled and single-parents families in which there is a child 6 or younger. They would not be required to accept available work in order to receive the full benefits.
Single-parent families with children between the ages of 7 and 13 would be eligible to receive the become support payments. However such parents would be required to accept part-time work if it is available. If they refuse, their basic benefit would be reduced, from $4,200 to $2,300 in the case of a family of four.
Under the work benefit portion of the program, the basic benefit for a family of four with no other income would be $2,300. Those eligible for this benefit would be individuals, children couples, two-parent families with children and single-parent families in which the youngest dependent child is 14 or older.
All of these people would be required to accept full-time jobs, if available, to receive the full benefit.
The inclusion of a special category for single parents who would be required to accept part-time work represented one of the many last-minute compromises made in shaping the program. Initially, Carter planned to propost that all single-parent families with children below the age of 14 be eligible for full income support payments without a work requirement.
However, Sen. Russell B. Long (D- La.), chairman of the Senate Finance Committee, argued that there should be a work requirement except for single-parent families with children 6 or younger. Thus, the compromise was struck establishing the part-time work requirement for families with children between 7 and 13.
But in a dispute with another powerful committee chairman, Al Ulman (D-Ore.) of the House Ways and Means Committee, the President did not compromise. Ullman objected to basing the payments on family size.
Carter stuck with his original plan, proposing basic benefits of $1,900 for the head of a household. $1,100 for the first child and $600 for each additional child up to a miximum of a family of seven.
Other aspects of the programs include:
An expansion of the earned income tax credit up to a $600 maximum credit for a family of four. Currently, the maximum for a family of four is $400.
The creation of 1.4 million public service jobs, including 300,000 part-time jobs. The jobs would pay the federal minimum wage, which the President has proposed rise to $2.65 an hour next year.
Fiscal relief to the states for welfare paymemts totalling $2 billion, more than half of which would go to New York and California.
HEW officials calculated the fiscal relief to the District of Columbia at $36 million, to Maryland at $37 million and to Virginia at $8 million. Every state would be relieved of at least 16 per cent of its welfare costs, and for the states with the heaviest welfare burdens the savings would amount to 25 per cent or more, according of HEW.
Administration officials dubbed the proposal, "the program for better jobs and income." The President said he believed "a great deal of stigma" has been attached to the word "welfare."
At present, Carter said, it "is neither rational nor, is it fair, and the welfare system is antiwork and antifamily. It is unfair to the poor and wasteful of taxpayers' dollars. The defects of the current system are very clear."
The President, who was joined here for the announcemnet by HEW Secretary Ray Marshall, said the basis for his proposal was a belief in the importance of work and jobs rather than welfare and in the importance of holding families together rather than seeing them broken up, which he said the system encourages.
His program, Carter said, "will ensure that work will always be more protitable than welfare, and than a private or public job not supported by the federal government will always bring in more income than a special job created with federal funds."