NEWS ANALYSIS : Wilson Welfare Plan a Bid to Rebuild Appeal

SACRAMENTO —  After spending much of his first year in office battling Democrats over spending cuts and fellow Republicans over tax increases, Gov. Pete Wilson now has taken a bold step to seize the political initiative by proposing a sweeping ballot proposition that would slash welfare benefits and give him broad new budgetary powers.

The proposed constitutional amendment unveiled by Wilson this week could be a defining issue in state elections in 1992, stir up a bitter debate dividing ethnic groups and economic classes, and go a long way toward deciding whether Wilson can shore up his fading popularity and establish himself as a potential presidential candidate, political observers say.

Wilson came up with the welfare proposal after a punishing year that saw him alienate many Republicans by signing the largest tax increase in state history, anger homosexual rights activists by vetoing an important gay rights bill and challenge state employees over pay cuts.

Though Wilson himself will not be running for office, many observers consider 1992 a crucial election year for the governor, and a key Wilson aide said he believes the welfare initiative “has the potential to be a defining issue in the 1992 legislative elections.”

The governor, at a time when public opinion polls show his support waning, must help win California for President Bush as well as try to win two U.S. Senate seats for the Republicans.

On top of that, Wilson fought Democrats over the redrawing of legislative district boundary lines this year and succeeded in gaining a court-drawn plan that many regard as favorable to Republicans. The governor will be expected to produce some victories in those races.

Phil Angelides, chairman of the California Democratic Party, predicted that the Wilson initiative will result in “a real pitched battle” between Wilson and Democrats in 1992.

The welfare initiative calls for a nearly 25% reduction in financial aid to 2.2 million Californians on the Aid to Families with Dependent Children program. It also seeks to restructure some of the incentives in the welfare system, denying extra benefits to AFDC mothers who have additional children and imposing economic penalties on AFDC recipients who move here from other states or who live in a home with an able-bodied person who is not working.

Aside from the proposed changes in the welfare system, the initiative would give Wilson broad new powers to bypass the Legislature and impose unilateral budget cuts on programs not protected by the California Constitution whenever there is a gap between revenues and expenditures of 3% or more. Gaps that high or higher have developed in the last two budgets. Democrats already are zeroing in on the new powers sought by the governor, saying Wilson wants to become “dictator.”

Leo McElroy, a veteran Sacramento-based manager of initiative campaigns, said Wilson may find “a real audience” in California for his welfare plan. “The economy is going bad and there are a lot of people out there looking for someone to blame. Up until now, people have been blaming politicians. Wilson is trying to give them another target, welfare recipients,” McElroy said.

Even so, McElroy said he does not consider the Wilson initiative “a slam dunk.” He said Wilson may have made a mistake by adding the sections giving him broad new powers. “A lot of people are going to view this as an effort to achieve extra powers for the governorship and do it under the cover of rewriting welfare laws,” he said.

National political analysts say Wilson’s proposal is consistent with efforts under way in numerous other states to control soaring welfare costs.

“It’s an idea that is picking up steam all over the country,” said Thomas E. Mann, director of governmental studies for the Brookings Institution in Washington. “The fiscal plight of the states is leading to somewhat desperate efforts to trim spending.”

Bill Schneider, a political analyst with the American Enterprise Institute, said: “Welfare reform is going to be a national issue next year. In an era of tight budgets and limited flexibility, welfare is the most inviting target. It is probably the least popular domestic program.”

The last time a welfare reform proposal was put before voters in California, in 1984, it was soundly defeated, with 63% of the voters against it and only 37% in favor.

But Wilson’s aides point out that the 1984 initiative was sponsored by a legislator, Assemblyman Ross Johnson (R-La Habra), as opposed to a governor with far more political resources at his disposal, and ran up against a well-funded campaign by hospitals because it would have reduced health benefits. The Wilson plan would not touch medical benefits.

The latest Los Angeles Times Poll found that Californians strongly support Wilson’s efforts to limit benefits to new residents of the state, but, in answer to another question, only 3% of the respondents of the survey cited welfare as being responsible for California’s budget problem. The statewide survey found that 29% of the respondents blamed the Legislature for the budget problem and 20% blamed Wilson.

The survey also found that more than half of the public opposed “further welfare cuts in welfare benefits for low-income people.”

Wilson aides say the governor’s plan comes against the backdrop of soaring caseloads in the state’s Aid to Families with Dependent Children program, which serves 2.2 million Californians and is the largest of the state’s welfare programs. Since 1988, AFDC caseloads have been growing at a rate that is four times faster than the population as a whole, according to the state Health and Welfare Agency. The AFDC program costs $5.6 billion annually, with 50% of the costs picked up by the federal government. California, with 12% of the nation’s population, pays 26% of the amount states put into AFDC.

The $663 monthly grant in California for a family of three compares to the $184 monthly benefit in Texas, $294 in Florida, and $403 in Pennsylvania.

Under Wilson’s plan, benefits would be immediately dropped by 10%, to $597, for a family of three. In six months, welfare families with able-bodied adults who were not working would lose an additional 15%, dropping the grant down to $507.

Wilson argues that California’s benefits are so high that they are a magnet to welfare recipients from other states. State studies show that 7% of the AFDC caseload is composed of people who had lived in other states within 12 months of starting to receive aid in California.

Martin Anderson, a fellow at the Hoover Institution in Palo Alto and a former Reagan Administration official who wrote a book about the welfare system, said Wilson must walk a fine line during the campaign.

“By and large if you ask people about welfare, most have no problem whatsoever with paying a reasonable amount to support the truly needy. But what drives them up the tree is thinking that people are abusing the system or are receiving assistance even though they are capable of working,” he said.

Anderson also said, “The people who are going to attack him better be careful because he can step back and say: What is your answer? What is the Democratic alternative? Do they want to raise taxes?”

The governor was criticized immediately for sounding some of the same anti-welfare themes voiced by candidates from the extreme far right, such as Republican presidential candidate David Duke, the state legislator and former Ku Klux Klan leader who recently lost a gubernatorial election in Louisiana.

Wilson, chafing at the comparison, has publicly attacked Duke several times in recent weeks.

Angelides, the Democratic Party chief, said, “It’s interesting to note that the governor went to great extents personally to distance himself from David Duke because if he didn’t we might be confused by his words and actions.”

One effect of Wilson’s proposal is to win back at least some support from critics from within his own party in California. Wilson alienated many Republicans here when he signed more than $7 billion in tax increases last summer.

Assemblyman Tom McClintock (R-Thousand Oaks), a conservative ideologue who is one of Wilson’s harshest critics, is one of those applauding the welfare plan, saying, “I compliment him for finally recognizing the damage that’s been done and moving substantively to correct it.”

The governor’s proposal, according to observers from both political parties, raises a number of legal questions. One Republican legislator familiar with initiative measures said the proposal may violate the state law limiting initiatives to one subject, since it raises issues dealing with both the welfare system and the separation of powers between the governor and Legislature. Experts on welfare law also said Wilson would need numerous administrative waivers from the federal government before he could do such things as deny additional benefits to women who have more children.

Wilson and his aides said that, while they expect legal challenges, they believe the initiative is on firm footing. They contend the initiative deals with only one subject, the state budget, and they note that the California Supreme Court has been generous in its interpretations of what defines single subjects. Kassy Perry, a spokeswoman for the state Health and Welfare Agency, said discussions have already been held with Bush Administration officials over possible waivers and the talks have been “encouraging.”