President Reagan's proposed welfare and food stamp cuts would hit the working poor much harder than those who rely on welfare alone and as a result would discourage welfare clients from working, according to an analysis by the University of Chicago's Center for the Study of Welfare Policy.
The study dealt with low-income working households that now depend on welfare and food stamps to supplement their earnings. The administration would reduce their benefits, since they are not the poorest of recipients. On the strength of calculations for 10 states, the center said this would leave many such households little better off than if they quit working and depended entirely on welfare and stamps.
"In all states the difference between the total income of an earner and non-earner decreases dramatically under the administration's proposals," said the center.
In Louisiana, for example, a non-working welfare mother with two children now gets $330 a month from the Aid to Families with Dependent Children (AFDC) program and food stamps. But one who works and nets $95 a month after deduction of work expenses has total pay, AFDC payments, earned income tax credit and food stamps of $394.
Under Reagan's proposals, however, both families would end up with net income from all sources of $306 a month after four months on the rolls.
These changes would result from Reagan's proposals to reduce food stamp benefits more than at present for each dollar a recipient earns, to reduce the amount of income allowed for work expenses and to reduce AFDC benefits more than at present when a person earns money.
A calculation for Michigan shows that a non-working mother with two children gets welfare and food stamps totaling $532 a month now, while one who earns $193 a month after deduction of allowable work expenses ends up with combined net earnings, food stamps and welfare benefits of $636.
Under Reagan's proposals, the center said, the non-worker would get $508 a month while the worker would get only $512.
Calculations with similar results were made for all 10 states studies. They included Arkansas, California, Louisiana, Michigan, Mississippi, Missouri, New York, Oklahoma, Texas and Utah.
Among the principal authors of the study was Tom Joe, a special assistant to the undersecretary of Health, Education and Welfare during the Nixon administration.
The study also said that the overall disposable income of welfare recipients would drop, driving families further into poverty, despite Reagan claims that the changes wouldn't hurt "the truly needy."
"Non-earners will drop several percentage points [in income], while earners fall an average of 21.5 percentage points in the states selected for study."
Thus, in Arkansas, a non-working mother of two receiving a maximum AFDC payment plus food stamps would drop from 54 percent of the poverty level (which is $7,070 for a non-farm family of three) to 50 percent. A working mother with average earnings there would drop from 74 percent of the poverty level to 56 percent.
In California a similar working mother would drop from 122 percent of the poverty line to 89 percent; in Louisiana from 67 percent to 52 percent; in Michigan from 108 percent to 87 percent, and so on.