In the 1990s, President Bill Clinton announced a historic shift in government support for the poor. By requiring parents to work instead of merely handing them checks, Clinton vowed to “end welfare as we know it.”

This week, California’s Gov. Arnold Schwarzenegger is taking that goal quite literally, proposing to eliminate cash assistance for the state’s poorest families altogether. Legislators, poverty researchers and poor parents alike greeted with astonishment his unprecedented call to drop the state’s welfare-to-work program, known as CalWORKs.

The governor’s proposal would make California the only state in the nation to reject Temporary Assistance to Needy Families block grants, the federal program that allows states to draw funds as long as they impose strict time limits and work requirements on recipients.

Rejecting the $3.7 billion federal grant would save the state its matching portion of $1.8 billion. But it also would result in the loss of $600 million in federal stimulus funds — money economists and poverty watchers say is desperately needed to invigorate a moribund economy.

The proposal landed in uncharted territory in the Capitol and beyond, with no one able to predict what legislators ultimately will do as the extraordinary recession deepens.

As of late Wednesday afternoon, Schwarzenegger’s proposal to eliminate CalWORKs appeared to be, if not dead on arrival in the Democrat-controlled Legislature, then on life support. Legislators from both parties signaled they would oppose a wholesale elimination of programs serving California’s neediest, including CalWORKs and the Healthy Families insurance program for the children of the working poor.

Even a leading conservative suggested a more surgical approach. “There can be a phasing down, a scaling back” that might over time result in equal savings, said Assemblyman Jim Nielsen, R-Redding, who has been tapped to help lead the Republican Caucus in negotiations to close the state’s $24 billion deficit.

Democrats, too, have responded with shock to the governor’s proposals, unveiled after voters last week shot down a slate of ballot measures that would have pumped billions into the state’s coffers by extending taxes and borrowing from Wall Street.

“Particularly in these extraordinary economic times, it’s hard for me to believe that the Legislature would ever agree to that — or that this is a serious proposal even from this governor,” said former Assemblywoman Dion Aroner, a Berkeley Democrat and architect of California’s welfare-to-work program.

But with the deficit continuing to grow, Schwarzenegger’s proposal seems certain at least to lead to major changes in the welfare program, which by most accounts has been a notable success, moving millions of families off the public dole and into the work force.

And Schwarzenegger says ending the program, which now serves 1 million children and 300,000 adults, is, frankly, only a start.

By week’s end, the governor says, he will unveil another $3 billion in cuts. He has said he knows there are faces behind all the dollars disappearing but that he has no other choice.

That’s hard for Michelle — a San Jose mother of a 2-month-old — to believe. The loss of CalWORKs would mean no diaper money, no rent payments and no independence from her baby’s father, who she said abused her and kept drugs in the house. Her $584 monthly grant has allowed her to receive child care, attend DeAnza College and buy groceries while she works her way to self-sufficiency.

Michelle, who is 26 and did not want her last name used, echoed other CalWORKs clients interviewed who said quite simply that the assistance keeps their families off the streets.

“CalWORKs is a lifeline between whether we eat or not and whether we have a roof over our head or electricity and gas,” said Vivian Hain, a Berkeley single mother of three who testified about Schwarzenegger’s proposal before state legislators Wednesday.

Assemblyman Jim Beall, D-San Jose, argues for administrative cuts — reserving money for benefits rather than state workers who handle cumbersome paperwork and investigators who chase down the low number of “welfare cheats.”

Eliminating CalWORKs would result in “a lot of little kids begging on the streets,” Beall said.

Adult CalWORKs recipients have a lifetime limit of 60 months on aid. In exchange for cash benefits that average $526 per family, they are required to work or look for work. The program also offers job training and child care.

Sharon Parrott, a senior analyst at the Washington, D.C.-based Center on Budget and Policy Priorities, called Schwarzenegger’s plan “draconian” and never before attempted in U.S. history.

“The hardship this would wreak would be very, very significant,” Parrot said. “Certainly, California’s budget problems are dire, but it seems hard to imagine that this is the only option left.”

Barbara O’Connor, director of Sacramento State University’s Institute for the Study of Politics and Media, said it’s “counterintuitive and unlikely” that Democrats will go for the end of welfare. But she added: “Anything is possible in this wacky environment.”

Staff Writer Mike Zapler contributed to this report. Contact Karen de Sá at kdesa@mercurynews.com or 408-920-5781.