Senate Republicans Unveil Welfare Reform Proposal : Congress: Plan softens some of the benefit cuts, work requirements passed by House. Clinton Administration issues veto warning over food stamps.

Setting the stage for an ideological clash between GOP moderates and conservatives, Senate Republicans unveiled a welfare reform plan Tuesday that would scuttle or soften some of the benefit cuts and work requirements approved by the House.

The Senate initiative, outlined by the Finance Committee, would transfer to the states control over the cash-assistance program for poor families with children without imposing as many conditions on the use of federal funds as the House plan.

While both the House and Senate measures would transfer administrative authority over many welfare programs to the states, the House bill would impose strict requirements that states must meet to qualify for federal funds. It would require them to make teen-age mothers and legal immigrants ineligible for cash benefits, to cap benefit levels so that parents could not receive additional cash benefits for having more children, and to penalize recipients if the paternity of children is not established. The Senate bill contains no such federal requirements, although it would allow states to impose their own restrictions.

As the Senate prepared to open debate on its welfare initiative, the Clinton Administration issued its strongest warning yet that the President is prepared to veto any welfare measure that repeals the protected status of food stamps. Some Republicans want to transform the $27-billion program from a federal entitlement that guarantees benefits to all who qualify to a state-run program funded by lump-sum grants that might fall short of the amount needed to provide full benefits.

A senior White House official said the Senate Finance Committee proposal, which is expected to be voted out of committee Thursday, is “better than the House bill.”

“They appeared to have listened to the President, the Catholic church and others on the House provisions that were tough on kids,” said Bruce Reed, a domestic policy adviser to the President. “But they’ve got a long way to go to make sure that there’s a real focus on moving people from welfare to work.”

The President has warned that he will veto the House version of welfare reform. White House officials have not said whether the Senate measure, as currently envisioned, would suffer a similar fate.

Some conservative Republicans, however, have already notified Senate Finance Chairman Bob Packwood (R-Ore.) that they will oppose the measure unless he amends it to include four provisions they believe would deter unwed pregnancy, including denying benefits to unwed teen-age mothers and rewarding states that reduce out-of-wedlock births.

The Senate proposal, like the House bill, would end the nation’s 60-year guarantee of welfare benefits for poor, single mothers with children. Both would provide lump-sum block grants to the states to tailor their own programs to provide cash benefits to poor households. The Senate bill would set funding for those programs at $16.8 billion for each of the next five years, the same amount spent last year under Aid to Families With Dependent Children.

Democrats warned that the GOP formula would force states to stop accepting new applicants or to reduce benefits across the board if welfare caseloads expand because of future recessions, disasters or other unforeseen calamities. Both GOP measures contain emergency provisions that would allow states to borrow up to 10% of their yearly grants from a reserve fund. But many governors have said that plan is not adequate insurance against potential shortfalls.

Both GOP measures would require welfare recipients to participate in programs leading to work after two years and would limit lifetime cash benefits to five years in most cases. But the states would be allowed to modify overall requirements, potentially creating modifications that could limit or expand the impact of the mandate.

The Administration and congressional Democrats consistently have warned that, under the GOP plans, states could cut off recipients instead of providing the training, job placement and child care necessary to help them make the transition to work.

“One concern is that states will shy away from the hard job of moving people from welfare to work and just either cut them off or take a minor penalty,” Reed said. “We think the incentives should work in the other direction. States should be rewarded for moving people from welfare to work, not for cutting people off or ignoring them altogether.”

While freeing states from some of the tough provisions in the House bill, the Senate proposal would retain some provisions of current law that the House measure would end. Under the Senate plan, states would be required to preserve the Job Opportunities and Basic Skills Programs created during the last wave of welfare reform in 1988 and to provide child care to participating parents with children younger than 6.

The Senate plan is more lenient than the House measure in its treatment of legal immigrants. It would give states the option of denying welfare benefits to legal immigrants but does not require them to do so, as the House plan does. The Senate also would tighten eligibility rules for blind, disabled and elderly legal immigrants who receive Supplemental Security Income benefits, but not to the same extent as the House bill.

Child-support enforcement measures in the Senate proposal are less stringent than those passed by the House. The Senate version does not mandate that states revoke driver’s licenses and professional licenses of parents who are delinquent in support payments, a sanction sought by the White House.

The Senate plan would alter SSI eligibility for disabled children, disqualifying about 160,000 of the 900,000 who now receive benefits.