Clinton Unveils Welfare Reform : Legislation: His $9.3-billion plan stresses work, imposing 2-year limit on benefits for younger recipients. Initiative seeks to curb teen-age pregnancy, illegitimacy.

Decrying the “cycle of dependency” that keeps millions of Americans on welfare rolls for years, President Clinton on Tuesday unveiled a $9.3-billion reform initiative that would impose a two-year limit on cash benefits and require younger recipients to find work themselves or take a government job.

“We propose to offer people on welfare a simple contract,” Clinton said during an address in the lobby of a Kansas City bank where Harry S. Truman once worked and where former welfare recipients have become productive wage earners.

“We will help you get the skills you need,” Clinton said. “But after two years, anyone who can go to work must go to work, in the private sector, if possible, in a subsidized job, if necessary. But work is preferable to welfare and it must be enforced.”

If his package is enacted, the President said, 1 million people who would otherwise be unemployed and receiving welfare benefits will hold jobs by the year 2000. That would represent roughly one of every five adults who now receive Aid to Families With Dependent Children. Clinton’s plan applies only to AFDC and not to food stamps or other programs for the needy.

The initiative is designed to flesh out Clinton’s campaign promise to “end welfare as we know it” by addressing some of the factors that tend to make public assistance more attractive than gainful employment to recipients, particularly single mothers. Welfare reform is considered a central element of Clinton’s “new Democrat” agenda, which attempts to find common ground between traditional liberal and conservative approaches to social policy.

“Work,” the President declared in the lobby of Commerce Bank here, “is the best social program our country has ever devised.”

But White House officials acknowledged that the initiative probably will languish until the fate of Clinton’s health care reform campaign is resolved. Moreover, concerns about the cost of the welfare package and the eventual scope of its public employment provisions could endanger passage in an era of tight budgets and public skepticism about big social programs.

The welfare initiative attempts to discourage long-term dependency by extending both a carrot and a stick: welfare recipients would be provided with additional education, training, job placement services and child care to help them become self-sufficient. But if they failed to play by the new rules, they could see their benefits reduced or cut off.

But in taking a “tough love” approach to dependency, Clinton’s proposals must overcome a significant obstacle that has blocked past reform efforts: In most cases, it costs the government less money to simply send checks to unemployed welfare beneficiaries than to provide the kind of training, subsidies and public sector jobs needed to turn them into wage earners.

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Under the Clinton plan, public sector jobs would be provided to participants who hit the two-year limit without finding work in the private sector. Commerce Bank, for example, is active in a city program that trains and places Missouri welfare recipients in private jobs.

Clinton said that his plan makes it clear that both parents will be held responsible for the welfare of their children. It would emphasize establishment of paternity and crack down on fathers who fail to provide mandated child support. It includes measures to discourage teen-age pregnancy and illegitimacy, which Clinton says have contributed to welfare dependency.

“Children should not be born until parents are married and fully capable of taking care of them,” the President said.

Most of the plan’s provisions would apply only to adult recipients born after 1971, who represent the youngest one-third of the total adult AFDC population of 5 million. The age threshold is intended to reduce the total cost and lighten the administrative burden imposed on states, which would be required to create hundreds of thousands of education, training and subsidized work slots.

The President said that he would introduce his legislation in the next few days. It already faces competition from several congressional proposals that represent different visions of welfare reform. Liberals tend to oppose the proposed two-year limit as too severe, while conservatives argue that the Clinton plan does not do enough to discourage illegitimacy.

Members of Congress and welfare specialists differed sharply in their initial assessments of the President’s plan.

“It’s a step in the right direction,” said Rep. Dave McCurdy (D-Okla.), chairman of the centrist Democratic Leadership Council and sponsor of a moderate welfare reform bill.

Clinton’s plan, McCurdy said, shares core elements with both the moderate Democratic proposal and a leading Republican alternative. “It puts us all in the ballpark now,” he said. “Our bill, the Republican bill and the Clinton bill are in a range now.”

“For those of us who have worked on welfare reform, the President’s bill is a great disappointment,” countered Sen. Hank Brown (R-Colo.), co-sponsor of a Republican reform measure in the Senate. “He gets an A-plus for his rhetoric; he gets a flat F for the content of the bill.”

In unveiling his proposal, Clinton stressed that it must be accompanied by health care reform. Without universal health coverage, he said, welfare recipients will continue to be faced with an unacceptable trade-off: If they leave welfare for a low-wage job, they probably will have to give up the medical coverage the government provides them and their children.

“Until we fix that, we will never close the circle and have a truly work-based (welfare) system,” Clinton said.

Reforming welfare, he said, is a key part of the challenge to restore faith “in certain basic principles that our forebears took for granted--the bonds of family, the virtue of community, the dignity of work.”

The plan calls for no tax increases to finance welfare reform. Instead, the President proposed to offset its costs largely through reductions in entitlement programs targeted at the poor. The largest portion, an estimated $3.7 billion over five years, would come from denial of public assistance to noncitizens. Immigrants whose sponsors earn more the median income, now about $40,000, would not qualify for such benefits unless they become citizens.

Another $1.6 billion would come from capping AFDC’s emergency assistance program, which states use at their own discretion to help poor people. The remainder would come in offsets from an assortment of programs, including an extension of the corporate Superfund tax, a limit on benefits paid to drug addicts and alcoholics, reduced crop support payments for affluent farmers and changes in a federally subsidized day care food program.

The Clinton plan would require hospitals to devise procedures to establish paternity when possible. Tougher child support regulations, including a national clearinghouse to track fathers who fail to make their payments, would cause government child support collections to more than double, Clinton said. New teen-age pregnancy prevention programs would be established in 1,000 middle schools and high schools in disadvantaged neighborhoods.

The age threshold would focus most of the changes on younger participants. By the year 2000, an estimated 14% of potential recipients under 29 would have left the rolls, while another 26% would be working in subsidized, or part-time, jobs, according to Administration estimates.

To discourage recipients from having babies, mothers of infants would be exempt from work requirements for only 12 months after their first babies were born and just three months for subsequent births. Under current law, the grace period is three years.

States would be allowed to impose restrictions to prevent parents from receiving additional benefits by having more children. That concept is opposed by liberals, who argue that it will punish children without really discouraging women from having more.

“With this proposal, he is exposing some of America’s most vulnerable children to deprivation and poverty,” said Deborah Lewis, legislative counsel for the American Civil Liberties Union.

Conservatives, however, argued that the President’s initiative does not go far enough to have an impact on the problem of welfare dependency.

Robert Rector, a welfare specialist at the conservative Heritage Institute, said that the plan reflects the President’s “complete avoidance of the central problem--that one-third of children are born out of wedlock. He’s paralyzed.”

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One of the central issues driving welfare reform is concern about the dramatic increase in out-of-wedlock births. The Clinton plan would require teen-age mothers to live with their parents, except in extreme circumstances, as a condition of receiving benefits. It calls for a national campaign to discourage teen-age pregnancy, involving schools, churches and communities.

The plan gives teen-age mothers special consideration. The clock on the two-year limit would not begin running until they reach the age of 18. States would be given the option to use monetary rewards and sanctions to encourage young parents to remain in school.

“The proposal would make what are probably the most substantial changes in the welfare program in decades--perhaps since AFDC was created in 1935,” said Robert Greenstein, executive director of the Center on Budget and Policy Priorities.

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Times staff writers Ronald Brownstein and Jeff Leeds in Washington contributed to this story.

The Plan at Work

If passed, the President’s plan to overhaul the nation’s welfare system will require:

TRAINING: Each woman on welfare, working with a caseworker, would be required to develop an employment plan. This plan would identify the education, training and job placement services she needs to move into the work force.

LIMIT ON BENEFITS: 1. Recipients over 18 face a 24-month, lifetime limit on cash benefits. 2. Mothers who exhaust their cash benefits and have not found a job on their own would be enrolled in a subsidized, private-sector job or community service paying the minimum wage for 15 to 35 hours a week. Parents who refuse to take a private sector job would be kicked out, but those who are unable to find such a job would be allowed to remain in the program indefinitely.

CHILD SUPPORT CRACKDOWN: The child support system would include regular updating of child support awards, new penalties for those who refuse to pay and a national child support clearinghouse to track payments and catch parents who flee across state lines to avoid paying.

NEW RULES FOR IMMIGRANTS: New restrictions on welfare benefits for legal immigrants whose relatives can afford to support them.

ANTI-FRAUD MEASURES: A national public assistance clearinghouse would track recipients, monitor earnings and check compliance with time limits and work requirements.

CAMPAIGN AGAINST TEEN PREGNANCY: A $400-million campaign against teen pregnancy.

Welfare in America

The main target of the Clinton plan--Aid to Families with Dependent Children (AFDC)--is a $23-billion state-federal welfare program that supports more than 5 million families with children, most of them headed by single mothers.

AVERAGE MONTHLY PAYMENT: $379

TOTAL NUMBER OF FAMILIES: 4.4 million

% OF RECIPIENTS ALSO GETTING FOOD STAMPS: 87% (Food stamps is a separate program, administered by the Agriculture Department. It is not affected by the Clinton initiative)

WHO GETS AFDC

RACE Black: 39% White: 38 Latino: 17 Asian: 3 Other: 3

MARITAL STATUS Single: 40% Divored: 20 Separated: 32 Married: 13 Widowed: 5

AGE Under 22: 36% 22 to 30: 42 31 to 40: 9 Over 40: 13

WHAT THE PUBLIC THINKS

A Los Angeles Times Poll taken in April found: 91% of Americans favor training/work program such as Clinton proposes

7% of Americans oppose such a plan

REASONS FOR JOINING AFDC

Divorce/separation: 45% Unmarried woman becomes female head of household: 30 Earnings of female head of household fall: 12% Earnings of others fall: 3%

REASONS FOR ENDING AFDC Marriage: 35% Children leave home: 11 Earning of female head of household rise: 21 Earnings of others rise: 5 Other benefits rise: 14

Categories do not add up to 100% because “other answers” are not included

TROUBLING TRENDS

Proportion of never-married women receiving AFDC 1980: 31% 1984: 36 1988: 46 1992: 52

Sources: Congressional Budget Office; Congressional “Green Book,” a statistical overview of entitlement programs; American Public Welfare Assn.; Los Angeles Times Poll

* RELATED STORY: A17