Under present law, "welfare" payments do not go to all poor people, only certain categories of the poor - the aged, blind and disabled, and families where the children are present and the father is not. There are also some states where a family is eligible if the father is present but unemployed. In addition, almost all poor people, whether on welfare or not, are eligible for federal food stamps.
President Carter's plan would do away with this categorization of the poor and would merge the separate welfare and food stamp programs into a single system of federal assistance. Essentially, all poor people would be eligible for welfare, and the new assistance would not cease abruptly at some arbitrary poverty line. It would be phased out as family income rises, and many families in the middle income regions would still receive limited amounts of assistance mainly through a system of special "earned-income" tax credit.
About 30 million people now receive welfare in some form, at a cost to the federal government of $25 billion to $30 billion a year, depending on who is doing the calculating.
Carter proposed a $30.7 billion program of income supplements, work incentives and public service jobs to replace the three basic existing welfare programs - Aid to Families with Dependent Children (AFDC), Supplemental Security Income (SSI) for the aged, the blind and the disabled, and food stamps.
The Carter plan would:
For the first time set a minimum floor under almost every family's income. The floor would be $4,200 a year for a family of four, $2,500 for an aged, blind or disabled individual, and would be paid by the federal government.
Require the head of a single-parent family with children between the ages of 7 and 13 to work in order to avoid having its minimum income floor cut nearly in half - to $2,300 in the case of a family of four.
Create a "work incentive" by allowing families on welfare to keep 50 cents of their welfare grant for each dollar they earn on a job. A family of four would be eligible for some federal payment until its earned income rose to $8.400 a year.
Create 1.4 million public service jobs, including 300.000 part-time jobs, for those who can't find private jobs. Federal officials differ as to whether 800,000 of them would, in effect, be transferred over from the existing Comprehensive Employment and Training Act (CETA) program.
Provide $2 billion in fiscal relief to the states, with much of that going to the two with the largest welfare caseloads, New York and California.
Eliminate the food stamp program.
Expand the earned income tax credit up to $600 for a family of four. The maximum is now $400 for such a family.