GOP Drops Bid for Lifetime Aid Ban for Teen Mothers, Babies : Congress: They instead would bar unwed recipients from receiving benefits until they are 18. Action increases likelihood of accord on welfare.

Republicans have decided to drop a provision of their welfare reform plan that the White House and congressional Democrats considered most onerous--making teen-age mothers and their babies permanently ineligible for cash benefits.

The decision was made this week during closed-door meetings of GOP members of the House Ways and Means Committee, according to Nancy L. Johnson (R-Conn.), a senior member of the panel.

“That was a particularly nasty provision,” Johnson said. “The great majority (of committee members) were uncomfortable with a lifetime ban.”

The concession increases the likelihood of agreement on a new welfare system--an accord likely to result in the biggest changes in the system in 50 years.

The Ways and Means Committee is expected next week to consider and then vote on the central tenets of the sweeping GOP welfare plan, part of the Republican “contract with America.”

The GOP measure would bar states from using federal money to provide cash benefits to unwed mothers under 18. But once those mothers turned 18, states could provide them with cash benefits.

Democrats had been particularly opposed to the idea of permanently denying cash benefits to children born to unwed mothers. Teen-age mothers would have been eligible for cash assistance only if they had additional children after turning 18.

“That was one of the meanest things” in the Republican plan, said Rep. Harold E. Ford (D-Tenn.), the ranking Democrat on the subcommittee that drafted the major provisions of the plan.

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Dropping the permanent ban on cash benefits for children of young mothers is “a major step for the Republicans but they should go further,” Ford said. He suggested that the majority should adopt the Democratic approach, which would provide cash benefits to teen-age mothers provided they live with their parents or guardians.

Some conservative Republicans, however, are likely to be unhappy with the decision to drop the ban because they believe that the harsh teen-age pregnancy provisions are necessary to discourage out-of-wedlock births.

Republicans on the committee debated several contentious issues in long sessions this week as they worked on the draft measure, which was endorsed by all the Republicans in the Ways and Means human resources subcommittee last week, according to members and staff who attended.

Some lawmakers were concerned that permanently denying benefits to young mothers could increase the incidence of abortion, because pregnant teen-agers would know that they could not support their babies.

Others argued that the provision was unfair to children born to teen-age mothers. Still others worried that the provision was too restrictive for states.

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Meanwhile, Democrats were busy drafting a competing welfare reform proposal, which they intend to submit to the full committee with the GOP measure. The Democratic plan would require that recipients work after two years and not be in a subsidized job for more than three additional years, as does the Republican plan.

Unlike the GOP draft, however, the Democratic approach would maintain the “entitlement status” of Aid to Families With Dependent Children, the main cash welfare program for families. Under the minority proposal, the federal government thus would continue to provide funds to states for every eligible family, according to a draft of the plan obtained by The Times.

The Republican plan, in contrast, would provide a grant to states that would be frozen at 1994 benefit levels for five years, regardless of increases in caseload.

While Republicans estimate that their welfare plan would save the government more than $40 billion over five years, the Democratic plan would cost at least $16 billion because it would provide extra money to states for job training and child care, according to Ford.

But Republicans cautioned that Democrats should not expect to win Republicans to their side.

“We’re pretty much unified in the direction we’re going,” said Rep. E. Clay Shaw Jr. (R-Fla.), the chairman of the subcommittee that drafted the welfare reform. “I don’t anticipate any significant departures from a unified approach.”

Shaw said he hoped that the Senate, which has not yet taken up welfare reform, would address the issue soon.