Gov. Jerry Brown and Democratic lawmakers were divided Tuesday over the thorny issue of remaking California's welfare program and whether to allow some parents to receive cash aid without finding work.

The dispute continued three days before the constitutional deadline for passing a state budget, with Brown issuing a public rebuke, saying the Democratic budget was "not structurally balanced and puts us into a hole in succeeding years."

Legislative Democrats tried to minimize the dispute, saying they were "99 percent" in agreement with Brown's $91.4 billion spending plan.

Brown invoked former President Bill Clinton in urging them to restructure the state's welfare-to-work system, known as CalWORKs, by imposing harsher consequences for parents who do not seek work.

"Last year, legislators enacted major reforms that cut spending on prisons and eliminated redevelopment," Brown said in a statement. "This year, we need additional structural reforms to cut spending on an ongoing basis, including welfare reform that's built on President Clinton's framework and focused on getting people back to work."

Brown's plan would cut off parents from welfare grants and child care after two years instead of four if they do not work or pursue training. It would also cut "child-only" grants by 27 percent, from $516 to $375 monthly for a family of three. Many child-only cases involve parents who exhausted their time limit or are ineligible to receive aid because they are disabled or undocumented with legal children.

The governor's reference to Clinton harkens back to the 1996 federal law that imposed stricter welfare requirements. Those changes dropped the number of recipients in California from a monthly average of 2.67 million in 1995 to 1.41 million in December 2011.

Despite imposing stricter reductions in welfare payments and shorter time limits since the recession, California has an outsized share of the nation's welfare population – one-third of the U.S. recipients for a state with one-eighth of the population, according to federal data. Different factors contribute, including aiding children whose parents are ineligible.

In a Senate budget hearing Tuesday, Democrats said Brown's plan would harm children because it imposes harsh consequences for not finding work when unemployment remains high at 10.9 percent.

"I don't know that President Clinton was dealing with an economy like ours today," Sen. Mark Leno, D-San Francisco, said after a Brown aide referred to the 1996 change.

Senate Democrats also halved a Brown cut to in-home care workers in committee Tuesday. Police arrested 10 demonstrators who blocked the governor's office as part of a protest organized by the Service Employees International Union.

Brown's welfare plan would save $880 million to help bridge a $15.7 billion deficit. Democrats instead want to save a smaller amount – $327 million – by allowing parents of young children to receive welfare grants without having to find a job.

For the last three years, the state has allowed parents of one child younger than 12 months or two children younger than 6 years to receive aid without meeting work requirements. The time they do not work does not count against their four-year time limit.

The state saves more money in the short term because child care, transportation subsidies and job training are more expensive than monthly cash grants. The maximum grant for a single parent with two children is $638, while child care for one child alone is nearly the same amount, said Brian Uhler of the Legislative Analyst's Office.

Brown officials say exempting parents from work requirements does not help parents build skills to stay employed in the long run. That factor was less concerning when the policy began as a one-time patch in the 2009-10 budget. Brown has proposed a phase-out starting in October.

About 50,000 families qualify for the exemption, Uhler said. That's one-sixth of the roughly 300,000 California families with adults receiving welfare aid based on federal data.

"Incentivizing work is a good thing, it's the right thing," said Senate President Pro Tem Darrell Steinberg, D-Sacramento. "But … reform disguised as a way to take people on the edge, trying to obtain self-sufficiency, and cut off their assistance is not reform."

Brown may be concerned about voters as he seeks an $8.5 billion tax initiative in November.

"Bill Clinton's approach to welfare reform appealed to swing voters in the 1990s and presumably would appeal to them just as much today," said Dan Schnur, director of the University of Southern California's Jesse M. Unruh Institute of Politics. "(Brown's) challenge is dealing with legislative caucuses paying more attention to their constituencies than to Brown's initiative."

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