RIPPING UP WELFARE

By GEORGE J. CHURCH

Historic turning points in social policy are not always obvious when they occur. Certainly Franklin D. Roosevelt did not foresee that some provisions of the Social Security Act he signed in 1935 would burgeon over the next 61 years into a mammoth federally financed and regulated welfare program. Last week, though, the equally historic nature of the decision facing Bill Clinton was clear not just to the White House but the whole nation. So the President turned his deliberations over a radical overhaul of F.D.R.'s welfare system into a solemn little drama.

Or perhaps a bit of "Kabuki theater," as an official speculated, in which the actors played out stylized roles to a foregone conclusion. Several of the top 15 advisers who sat down with Clinton in the White House Cabinet Room for a supposedly decisive session Wednesday suspected the President had already made up his mind to sign the welfare-reform bill Congress was about to pass. A tip-off: Hillary Rodham Clinton was conveniently out of town at the Olympics in Atlanta and, White House watchers believe, already knew what her husband would do. If the First Lady had been in any real doubt about what her husband would do, Clinton watchers reasoned, Williams would have sat in to listen and report. Also, though no other participants knew it, senior policy adviser Bruce Reed had prepared only one advance draft of the speech Clinton would give, and it assumed a decision to sign (though Reed says he could have quickly revised it to defend a veto).

In retrospect, it seems inevitable that Clinton would sign. And not just to take away from Bob Dole one of the few issues the Republican contender had been counting on to gain traction in the campaign. Political strategists figured a veto might cost the President about five points in the polls, but Clinton could endure that with plenty to spare. A veto, however, would have repudiated the entire moderate, New Democrat stance--champion of family values, balanced budgets, more cops on the streets--that Clinton had been cultivating so assiduously since the rout of the Democrats in the 1994 elections. And, of course, there was that matter of his 1992 pledge to "end welfare as we know it."

Moreover, Congress had stripped out of its new welfare bill many of the harsh provisions that had provoked the President to veto two earlier versions. The decisive breakthrough began in early June, when two obscure G.O.P. Congressmen--John Ensign, a freshman from Las Vegas, and Dave Camp, a third termer from Michigan--conferred after a meeting of Republican members of the House Ways and Means Committee. Says Ensign: "We both looked at each other and said, 'This is crazy!' " What was crazy, they thought, was a decision of the G.O.P. congressional leadership to keep welfare reform combined in a single bill with drastic changes in Medicaid. That bill would be guaranteed to draw a third Clinton veto.

Ensign and Camp, however, wanted some real, popular legislation to present to their constituents. They got 52 House colleagues to sign a letter to Speaker Newt Gingrich and Senate majority leader Trent Lott urging that welfare reform and Medicaid be decoupled. Gingrich refused, but meanwhile Ensign was getting calls--30 in a few days, he says--from lawmakers who wanted to join his group. He and Camp got more than 100 House G.O.P. signatures on a second letter, and on July 11 the G.O.P. leadership gave in.

Clinton still kept silent, largely to see what further concessions he might win. Even during the Wednesday meeting in the Cabinet Room, held after a House-Senate conference had shaped a final bill, he did not tip his hand. Probably he wanted to assure both his Administration and the general public that he was weighing carefully all the "policy" arguments, for and against.

With his own troops, at least, he succeeded. "The single best meeting I've seen in this White House," raved a participant--who was among those who urged a veto. The argument was intense and at times passionate, though always respectful. At one point Henry Cisneros, Secretary of Housing and Urban Development, asked Clinton, "If this ends up hurting people, what will you say when people ask how you will remedy the pain?" The President did not reply. After the meeting, he called Vice President Al Gore (in favor of signing), chief of staff Leon Panetta (for a veto), chief lobbyist John Hilley and Reed into the Oval Office for a further, 15-minute talk. Only then did he go before TV cameras to tell the world he would sign, and to make the best Republican speech of the year so far.

First, though, Reed had to revise his speech draft a bit. During the Cabinet Room meeting, Clinton had said, "This is a decent welfare bill wrapped in a sack of s----." For the public the wording was cleaned up; now the President branded as "just wrong" a provision excluding legal immigrants from getting most federal benefits. He also assailed a cut of $24 billion in federal outlays for food stamps over the next six years. These were the provisions that led most of his advisers to argue for a veto. The President, however, said the two provisions could be changed by further legislation.

As to the core bill, though, Clinton remarked, reprising a famous line of his 1992 stump speech, that "a long time ago I concluded that the current welfare system undermines the basic values of work, responsibility and family, trapping generation after generation in dependency...Today we have a historic opportunity to make welfare what it was meant to be: a second chance, not a way of life." In a brief question-and-answer session, a reporter reminded the President that civil rights and child-advocacy groups angrily contend that the reforms will hurt children. But Clinton argued that those groups had never been his allies on this front: "[They] never agreed that we should do anything to give the states much greater flexibility if it meant doing away with the individual entitlement to the welfare check."

The liberals' rhetoric was far more strident: "shame" (protesters in the Senate gallery); "betrayal" (Ralph Nader ); "moral blot on his presidency" (Marian Wright Edelman, head of the Children's Defense Fund and an old friend of Mrs. Clinton's). Nonetheless the final bill sailed through House and Senate by lopsided majorities; not only did Republicans vote for it almost unanimously, but large numbers of Democrats felt freed by the President's decision to take the popular side of the issue. House Democrats split down the middle, 98 for, 98 against. Democratic Senators voted for it, 25 to 21, and the yes voters included two of the chamber's most stalwart liberals, Tom Harkin of Iowa and Barbara Mikulski of Maryland.

So the nation is embarked on an immense experiment in social policy whose outcome will not be clear for years. And there may never be one all-embracing answer as to whether it will work. The central themes of the about-to-be law are clear enough. There will be no more guarantee of a federal check to poor people for as long as they may need it. Instead, Washington will make block, or lump-sum, grants for each state to distribute to the poor (along with some state funds) under guidelines intended to prod state and local authorities to prod the clients into finding jobs: generally a two-year limit on payments for any one stretch of time, and five years' lifetime for those who drift on and off welfare rolls.

But within those limits--and even they can be stretched--states can design pretty much any kind of program they want. They can decide just how hard someone applying for welfare must look for a job--for example, how many prospective employers must he or she phone or visit a week? The states can vary how much to pay for rent and food, how much for bus or train rides (or even gasoline) to enable welfare clients to travel to new jobs; even how much in day-care vouchers to enable working mothers to pay someone to take care of their young children. An intriguing possibility: a welfare mother who finds a job may use part of her grant to pay another welfare mother to watch the new worker's children as well as her own, thus putting the same dollars to double duty.

Even the system created in 1935, for all its strict federal rules, was never really unitary. Clinton notes that the basic monthly benefit for a welfare family ranged from $187 (in Mississippi) to $655 (in Vermont). But now, more than ever, there will be 50 separate systems. In fact more, since many states may, and should, permit variations from locality to locality.

Many plans also may, and should, change over time. Some ideas will work; some will not. Plans that succeed in rural or suburban areas may fail dismally in big cities. Welfare mothers who are easy to place in jobs during prosperous times may be next to impossible to put on payrolls when recession strikes. Some may lose jobs they found earlier and go back on the dole. And some of the many experiments that states have already begun, under waivers of the old law that the Clinton Administration has been granting liberally, may point the way for others. Two of special interest:

WISCONSIN: The President made a point of praising it, along with Oregon and Missouri, for taking federal money that once went in cash grants to welfare parents and using it to subsidize the wages employers pay to welfare clients whom they hire. That, however, is only one noteworthy aspect of the Wisconsin Works plan, dubbed W-2, that Republican Governor Tommy Thompson expected to put into effect by fall of 1997. Some others: the state plans to step up its own welfare spending sharply, paying out about $40 million more in the first year of W-2, or 13% more than it now spends annually. Much of the new money will go for child care--a necessity, since mothers with children older than 12 weeks will be required to work, and the number of children in subsidized day-care programs is expected to double, to 70,000.

Many of their parents, and other welfare recipients who cannot find jobs in the private economy, will be placed in community-service or so-called transitions jobs for up to four years. Critics, however, fear the state's day-care system will be swamped, private jobs will not open up in the numbers needed, and the make-work jobs will prove a transition to nothing. A current pilot program called Work Not Welfare, however, has had considerable success in moving people off welfare. In Fond du Lac County, the welfare caseload dropped nearly 50% from January 1995 to this past June--partly because many people who applied for welfare decided not to accept it when they found out they would have to work. Officials are not in the least apologetic about that. If people who figure it is easy to get on welfare find it is not and decide they can get along without it, well, so much the better.

MARYLAND: Prior to last September, relates social worker Janice Hicks, when people sought welfare payments in Anne Arundel County, "we'd just give them this application and say, 'Go for it.' " Now, under a pilot program that may be extended statewide, an applicant is immediately told he--or more often she--must spend four weeks looking for a job. Really looking: 10 or more interviews or job applications a week, to be verified by getting prospective employers to sign forms attesting that the interviews really took place. If a job is offered, it must be accepted. Period. The rule is, "Any job is a good first job." Social workers will offer various kinds of help: day-care vouchers, transportation vouchers, even mock interviews an applicant can watch on videotape to see how he or she comes across and correct flaws. Social workers are notably unsympathetic to pleas that the applicant is unemployable. They may suggest that even an applicant with the most minimal education and skills can get a job as a day-care assistant, or perhaps dog washer for a veterinarian. Those who really can't find a job in four weeks are placed in a training program, but officials prefer to stress jobs, not schooling. The idea is that an applicant who finds work can then arrange for further education and vocational training--"just like you and me," says Hicks.

In Anne Arundel, a racially mixed suburban community that includes Annapolis and has a strong economy, the approach works. But how about in Baltimore, where the number of available jobs has been declining? City officials at first were dubious, but they now seem to be catching some of the can-do spirit. One idea is to make liberal use of transportation vouchers to encourage--or push--welfare clients to look for jobs in nearby suburbs. Fine for Baltimore, which has excellent public transit. Los Angeles, though, would have to try something else: it has almost no public transportation, and residents of the Watts ghetto who do not own cars are isolated even from other parts of the city, let alone the suburbs.

These are only a few of the conundrums states and localities must face as they build a new welfare system (or 50, or 100 new ones). And no one can be sure how the whole process will turn out. But there is no such uncertainty about the system's being scrapped: it has contributed to, if not created, an underclass culture of idleness, dependency and self-perpetuating poverty. The new welfare law has many flaws, and will lead to harrowing uncertainty and real hardship for at least some of the poor. But the President is gambling that it's better to suffer that than to continue a system that even the fiercest critics of the new law concede needs an overhaul.

--Reported by Ann Blackman, James Carney and J.F.O. McAllister/Washington, Wendy Cole/Fond du Lac and Tamala Edwards/Baltimore

With reporting by ANN BLACKMAN, JAMES CARNEY AND J.F.O. MCALLISTER/WASHINGTON, WENDY COLE/FOND DU LAC AND TAMALA EDWARDS/BALTIMORE