Clinton Yielding Control on Welfare : Reform: He tells those at ‘summit’ to work through Republicans in Congress. The President indicates he will assume the role of mediator to ‘try to find a consensus.’

Bowing to new political realities, President Clinton demonstrated Saturday that he is ceding control over welfare reform to congressional Republicans and signaled that his role will be largely that of a mediator trying to find consensus.

In his most explicit remarks on welfare reform since the Republicans swept to power in Congress, Clinton told governors, congressional lawmakers and Administration officials gathered for a bipartisan “welfare summit” to work through Rep. E. Clay Shaw Jr. (R-Fla.), chairman of a House panel drafting welfare reform legislation.

The President’s role will be to “bring all of the parties together and try to find a consensus,” said a senior Administration official who attended the closed-door meeting. The official added that the White House, which last summer prepared detailed welfare reform proposals, has no plan to send an overall reform proposal to Congress.

When the White House announced late last year that the President would hold a bipartisan welfare summit, election-weary Democrats praised the move as a way for Clinton to regain the initiative on an issue that the Republicans were quickly making their own. But as the date for the session approached, Administration officials tried to diminish expectations, and Shaw referred to it as “the amazing shrinking summit.”

During 5 1/2 hours of debate Saturday, Clinton pointedly avoided setting forth his own specifications for welfare reform, according to officials who attended. Instead, he urged others to advance the solutions he favors by asking a series of questions.

An ebullient Shaw emerged from the session saying that Clinton “acknowledged that we’re in the lead, that our legislation is way out ahead and that everybody should work with us, which I really appreciated.”

“The direction we’re going has a lot of support,” Shaw said. “It raised my confidence level that we are on the right track.”

Participants said Clinton’s new welfare reform strategy shows on a larger scale that he is adjusting his role in Washington following the GOP election victories in November. Instead of drawing up and advancing highly detailed legislative initiatives, as he did during his first two years in office, he is adopting the role of a conciliator, hoping that will accomplish more than sending ideas into the teeth of Capitol Hill opposition.

The Republican welfare reform plan is the subject of hearings before Shaw’s Ways and Means human resources subcommittee and is expected to go to the full committee within the next several days.

The proposal, outlined in the House Republican “contract with America,” would lead to sweeping change by preventing mothers younger than 18 from collecting cash benefits, denying families financial aid unless the paternity of the children is established, cutting families off welfare after two years even if they don’t have jobs or other means of support, and making most legal immigrants ineligible for public assistance until they become citizens.

While those ideas are clearly at the vanguard, few expect they will pass as written. Many lawmakers say they expect that the final plan will be somewhat gentler.

As the GOP plan moves forward, governors have been using their influence to persuade Washington to hand control of the welfare programs to the states.

“Why do we have to come to Washington to get permission to serve the people better and more effectively?” asked Republican Gov. Arne Carlson of Minnesota at a press conference. He is one of six governors invited to the summit session.

Congressional Republicans and the White House have taken pains to accommodate the governors. House Republicans have already agreed to alter their proposal to give states more flexibility to craft their own programs.

From Saturday’s meeting, it was clear that neither Republican nor Democratic governors like conservative micro-management any better than they like liberal micro-management from Washington.

For example, Gov. Thomas R. Carper of Delaware, a Democrat, said that before the debate is over, Congress will likely strike the provision mandating that states deny cash benefits for mothers younger than 18. “The states don’t want to,” he said.

Although he took no firm positions during Saturday’s meeting, Clinton also expressed his opposition to that provision of the GOP plan during his radio address earlier in the day. “We shouldn’t cut people off just because they’re poor or young or unmarried,” he said.

During a press conference following the welfare meeting, White House Chief of Staff Leon E. Panetta said the President had not changed his position.

“The Administration is concerned that we provide a safety net,” he said, stressing that there is a “national interest” in protecting poor children.

More than 14 million American adults and children currently receive Aid to Families With Dependent Children, the main cash welfare system for families. The program has been condemned for encouraging dependency and subsidizing unwed parenthood.

After the meeting, the White House said the participants reached consensus on several broad points: The system is broken and any attempt to fix it should encourage work; a time limit should be placed on benefits; teen-age pregnancy should be discouraged, and men should be held responsible for their children.

But Sen. Bob Packwood (R-Ore.) said such agreements represented mere “surface consensus” and glossed over deep philosophical disparities between the various parties. For example:

* There is not yet agreement over how much flexibility states will be given in managing their welfare systems.

* No solution has been reached on whether recipients should be guaranteed jobs. The Administration had wanted to provide subsidized jobs for parents who exceed the time limit for benefits without finding work on their own, but Republican governors and members of Congress oppose that as too expensive.

* No consensus has been reached on whether welfare reform should cost money or save money in the short run. “We didn’t really talk about that,” Office of Management and Budget Director Alice Rivlin said after the meeting.

Solutions to these differences will be worked out, Packwood said, within the next several weeks in the House and within two or three months in the Senate.

In another indication of how illusive consensus on the welfare issue will be, two hours after the meeting concluded, Republican governors and congressmen were already trying to scuttle a compromise promoted by Democratic Gov. Howard Dean of Vermont, head of the National Governors Assn.

Dean wanted the governors’ group, which is holding its annual winter meeting here this weekend, to back a plan offering states a choice between block grants for welfare and a more flexible version of the present system.

The second option would appeal to states that favor preserving the principle of individual entitlements, a pillar of the present system.

But Republicans scotched the idea at a press conference after the White House meeting. Michigan Gov. John Engler called it “improbable,” and Shaw added: “There is no way that is going to happen.”

Times staff writer Bob Shogan contributed to this story.