SACRAMENTO, Calif. — With deficit forecasts growing darker by the day, Gov. Arnold Schwarzenegger is considering a plan to slash California’s safety net for the poor by eliminating welfare and health insurance for low-income families and cash grants to college students.
The proposal surfaced in testimony by the administration at a joint legislative hearing Thursday. It followed the governor’s decision to withdraw a week-old plan to borrow $5.5 billion to help balance the budget.
Officials in Washington offered little hope they would agree to guarantee billions in emergency short-term loans, even if massive spending cuts can be quickly enacted.
To balance the state’s books, Schwarzenegger is eyeing the dismantling of the state’s CalWorks program, which serves more than 500,000 poor families with children, as well as the outright elimination of Healthy Families, which provides medical coverage to 928,000 children and teenagers. Mothballing the two programs would save the state about $1.4 billion in the coming fiscal year, officials said.
Also potentially on the chopping block is CalGrants, a financial assistance program that offers cash grants to lower- and middle-income college students.
Schwarzenegger is considering big cuts in other areas in the aftermath of voters’ rejection Tuesday of nearly $6 billion in funding measures.
Among the possibilities are also reductions in funding for courts, state universities and prison programs.
