Only about a quarter of parents on welfare in California work the required amount, said Mike Genest, the governor's finance director, in a conference call Sunday with reporters. If the state fails to meet the federal work participation rates by 2008, California could face $149 million in sanctions next year and penalties of more than a half billion annually within five years. "All these actions are trying to ensure that people are seeking work, have the opportunity to do that and retain that work," said Joe Munso, deputy secretary for the state's Health and Human Services Agency. "We think these changes will move us toward achieving the goals the feds have set for us and hopefully to not have to pay hundreds of millions in sanctions." To help balance next year's budget, administration officials said Schwarzenegger also will propose suspending a 4 percent cost-of-living increase for CalWORKS families that was to take effect in July.

He also wants to cut welfare benefits to children of illegal immigrants after five years if their parents haven't become citizens. The package of reforms sparked immediate debate. Just two days after Schwarzenegger promised to govern as a centrist and work in a spirit of "post-partisanship," Democrats said the governor's proposals were sure to do just the opposite. "At a time when our state is enjoying unprecedented prosperity, we will not balance the budget on the backs of our most vulnerable citizens," said Assembly Speaker Fabian Nunez in a statement. "This is a punitive and unproven approach that will hit struggling families hard, particularly single mothers."

Senate President Pro Tem Don Perata, D-Oakland, however, issued a statement saying the governor's plan unfairly punishes children for the behavior of their parents. It's also incongruous with the governor's goal of expanding health care coverage in the state, he said. "It's ironic that the governor is proposing health care for poor kids while taking away their breakfasts," Perata said. Schwarzenegger is scheduled to release his health care plan today.