Clinton Takes the Offensive on Welfare : Reform: The Administration calls GOP reform proposal a ‘cruel hoax’ that would put 5 million children at risk.

After weeks of holding up welfare reform as a prime area for bipartisan compromise, the Clinton Administration launched a frontal attack Thursday on the leading GOP proposal, calling it a “cruel hoax” that would eventually knock 5 million children off the welfare rolls.

Health and Human Services Secretary Donna Shalala said at a press conference that the GOP plan would dump millions of poor children abruptly into the hands of states, cities and charities unequipped to deal with them, causing extensive suffering.

The “human consequences would fall on children, and (the) financial consequences would fall on state taxpayers and private charities,” a battle-ready Shalala told reporters. “The solution to the welfare crisis is not to send children to orphanages--it’s to send their parents to work.”

Republicans shot back in a statement put out by the House Republican Conference, calling Shalala’s statements a “hysterical assault” that has to “make many people wonder whether the Clinton Administration is serious about reforming the broken system.”

The Shalala onslaught was timed to coincide with a scheduled television appearance by incoming House Speaker Newt Gingrich (R-Ga.), introducing the 1938 Mickey Rooney classic “Boys Town” on TNT as his favorite movie.

Earlier this month, Gingrich suggested that First Lady Hillary Rodham Clinton watch the movie instead of criticizing his advocacy of orphanages in those cases in which parents cannot take care of their children.

While both the Administration and congressional Republicans are committed to reforming the welfare system, they have strikingly different visions of what the new safety net for families with children should look like.

The Republican proposal would deny some benefits to children born to unwed mothers, children whose paternity has not been established and children whose mothers fail to get jobs after two or five years on the rolls--depending on which time limit states select.

The President’s plan, which was introduced into Congress during the last session, offered a balance of carrots and sticks, including making the government an employer of last resort for welfare recipients who reached the two-year limit for cash benefits.

Clinton has scheduled a bipartisan summit on welfare reform for mid-January to try to reach consensus with Republican governors and members of Congress.

But this first major skirmish between the Administration and congressional Republicans on welfare reform stripped away the very thin veneer of cooperation on the issue. The debate over the issue seems sure to escalate into a full-scale war once Congress convenes on Wednesday.

The Administration’s first strike, which was Shalala’s idea but approved by the White House, showed the Administration digging in to defend some key elements of its approach to welfare reform.

Although the Administration is expected to lose a lot of ground to Republicans on some parts of welfare reform, Shalala’s statements reflected the White House’s determination to shine a spotlight on the possible negative consequences of the GOP plan in an attempt to preserve protections for children, officials said.

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A new HHS analysis determined that if the GOP plan were currently in place, 5 million children whose families are receiving Aid to Families With Dependent Children--the main cash welfare program for families--would be cut off.

But the Republicans countered that the provisions of the Personal Responsibility Act, the welfare reform legislation attached to their “contract with America,” would not immediately affect those on AFDC.

“Not one child currently receiving AFDC today will have his or her benefits cut off upon enactment of the GOP bill,” said Rep. John A. Boehner (R-Ohio), chairman of the House Republican Conference.

Boehner stressed that mothers who would eventually be denied benefits would be eligible for food stamps, Medicaid and other aid.

“Secretary Shalala would have everyone believe that the GOP solution to welfare reform is to place children in group homes,” Boehner said, adding that “this is a total mischaracterization” of the proposal.

According to the department’s analysis, the Republican plan would leave the states without adequate funding to care for the children who would be cut off.

While at least half of the 10 million children now receiving AFDC would be dropped, only $293 million would be returned to the states for orphanages or foster care, which could finance 8,029 places in orphanages.

In California, 1 million of the 1.8 million children on the rolls would be excluded, but only $64 million would be made available to care for the children, which would pay for 1,758 children in orphanages, according to the Administration’s analysis.

The Administration relied on the Child Welfare League’s estimate that the average group home costs $36,500 per child per year.

Some welfare experts agreed with Republicans that the estimates were overstated.

“They have exaggerated the numbers so much that they’ve undermined their case,” said Doug Besharov, a welfare specialist at the conservative Enterprise Institute. “If you’re going to attack the idea (of orphanages), you want to be very careful about your numbers. They’ve created a static analysis. They assume no change in behavior.”

More on Welfare

* Reprints of the “10-Point Plan,” a point-by-point look at the GOP “contract with America,” are available from Times on Demand. Call 808-8463 and press *8630. Order No. 5603. $2. The full text of the “contract” is available on TimesLink.

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