The Reagan administration yesterday approved controversial new regulations to deny welfare aid to any of 3.9 million families with personal property worth more than $1,000, aside from items "necessary" for day-to-day living.
An aide to Richard S. Schweiker, secretary of health and human services, said the secretary attempted to curb possible harshness in the new rules mainly by allowing each state to define what assets are necessities.
Schweiker signed the rules, which will govern eligibility for the largest welfare program, Aid to Families with Dependent Children (AFDC), and sent them to the White House Office of Management and Budget for review and clearance.
At the OMB, a spokesman promised "very expedited treatment" so that the regulations can be published and public comments received and considered before Oct. 1. He said the agency will focus on the paperwork that may be created by the rules, not on their substance.
The $1,000 limit, which applies to assets other than equity in a home and car, was imposed by a provision of the Omnibus Budget Reconciliation Act, the key budget-cutting measure sought by President Reagan and signed by him in August. The limit had been $2,000, by regulation rather than law.
At first, the provision was little noticed. When it came to public attention two months ago, however, welfare experts expressed alarm that it could force the states, which pay approximately half the costs of the program, to send out hordes of inspectors to assess items such as used clothing, old furniture, and pots and pans.
To eliminate such a possibility, Schweiker defined the word "home" to include all of the items essential to everyday life, not simply the structure in which a family dwells.
"I just didn't feel we should be forcing people who are on the AFDC rolls to sell their furniture and equipment," he said. "That makes no sense at all."
Schweiker did not specify in the regulations what items are "necessary." Instead, said press spokesman Laura Genero, he is leaving that to the states. As to enforcement, she said, he intends to consult with state welfare officials and is considering the possibility of a standard form in which each AFDC recipient would be required to list all of the household's so-called income-producing assets. The form would warn that falsification would be an offense.
Schweiker did not release the text of the draft rules pending OMB action on them, causing welfare experts to qualify their comments. The initial tentative reactions included praise from the National Governors Association, sharp criticism from Maryland, and milder criticism from Virginia.
At association offices here, T. Scott Bunton, staff director of the Committee on Human Resources, told The Washington Post he was "quite satisfied" with Schweiker's approach because it lets each state, as in the past, decide what household items a family needs to get along. In July, Bunton had voiced the fear that the provision in the reconciliation law could mean that "welfare agencies are going to have to go in and evaluate dishes, old clothing . . . . "
In Baltimore, however, Luther W. Starnes, executive secretary to the director of the Maryland Department of Human Resources, asserted in a phone interview that the new rules "would be an administrative nightmare."
He said that officials in Maryland, where the maximum grant to a family of four is $320 a month, are already doing "the best we can" to provide AFDC to those who need it, to review the rolls, to deal with "already complicated and detailed" welfare forms, and to do that spot-checking currently required by the federal government.
Any additional forms, verification and enforcement would be "administratively extremely difficult, even if we had the staff, which we do not," Starnes said.
Emphasizing that "nobody wants more than the states to maintain the integrity of the program," because they pay half the bill, Starnes said the new rules would be "oppressive to the clients, excessive to the agency." Sending investigators into a home to check on a valuation also could raise civil liberties problems, he added.
"You have to wonder if the returns from enforcement would be worth it," Starnes said.
In Richmond, similarly, Robert C. Osburn, information officer for the Virginia Department of Welfare, said, "We hope that we do not spend more money administering the program than would be realized through exempting certain articles." He also was concerned about errors in valuations, saying that "case workers do not know the value of articles."
Starnes said there is "no question" that a new form and a possible requirement for spot-checking would require expansion of his department's staff and make for an "impossible situation." As it is, he said, the staff is working "to capacity and beyond," and some employes are being laid off because of fund shortages of the kind affecting many states as well as the U.S. government.
The number of Marylanders on AFDC is 220,000. The state's 50 percent share of the program is $110 million plus $6.5 million for administrative expenses. How many might lose benefits is unknown. Nationally, press aide Genero said she had no figure on how many of the approximately 11 million AFDC beneficiaries may be affected.
Starnes said he thought that the provision in the reconciliation law and the regulations were "inconsistent" with the objectives of Reagan and Schweiker to "get the government off the backs of the people," partly because the rules would "add to the cost of government."