Senate Approves Shifting Control of Welfare to States : Reform: Bill that would end 60 years of federal policy is cleared in bipartisan 87-12 vote. It limits eligibility to 5 years and requires recipients to work after 2 years of aid.

With Democrats joining Republicans, the Senate voted by an overwhelming margin Tuesday to cancel 60 years of federal welfare policy and transfer control over the safety net for poor families to the states.

The measure for the first time would limit welfare eligibility to five years in a lifetime for most poor people and require recipients to work after two years of assistance. It was approved, 87 to 12, with only one Republican opposed.

“We are not only fixing welfare, we are revolutionizing it,” said Senate Majority Leader Bob Dole (R-Kan.). “In the process, we are closing the book on a six-decade-long story of a system that may have been well-intentioned but a system that failed the American taxpayer and that failed those it was designed to serve.”

In its place, Dole said, will be a “story about an America where welfare is no longer a way of life and where people no longer will be able to receive endless federal cash benefits just because they choose not to work.”

Despite the overwhelming vote, much work remains on the legislation. The Senate version now must be blended with the welfare bill approved earlier by the House, and that may prove difficult.

Dole picked up Democratic support as his bill shifted to the political center and away from many provisions favored by conservative Republicans. The House-approved bill, however, hews more closely to the conservative view of welfare.

Those differences must be worked out by a joint House-Senate committee against a backdrop of a threatened veto from President Clinton if the final version moves too far away from the Senate bill. If it does, Clinton warned Tuesday, it will “kill welfare reform.”

“If welfare reform remains a bipartisan effort to promote work, protect children and collect child support from people who ought to pay it, we will have welfare reform this year, and it will be a very great thing,” Clinton said in Jacksonville, Fla.

The architect of the House measure, Rep. E. Clay Shaw Jr. (R-Fla.), however, said that the President’s threats would not prevent Congress from resurrecting some House provisions stripped out by the Senate.

“It’s going to move toward the House bill and the President is going to sign the bill,” Shaw said confidently.

In the Senate, lawmakers agreed to provide more money for child care for recipients forced to take jobs and to block some harsher provisions in the House bill. Democrats embraced the changes.

“Democrats here are saying that we’re willing to take the risks involved in ending the entitlement in order to stimulate real welfare reform,” said Sen. Joseph I. Lieberman (D-Conn.). If there are more hungry and homeless children as a result, he said, “we will all have to be honest enough to come back and fix this.”

California Democratic Sens. Dianne Feinstein and Barbara Boxer voted for the bill.

At the center of both House and Senate versions of the legislation is a shift of control over welfare from the federal to state governments.

Governors and state legislatures would have broad flexibility to design and run their own welfare programs. Although the federal government would require states to cut off recipients after five years and require them to work after two years, states could decide to be much more restrictive. They also would be able to decide how much to devote to cash assistance and how much to spend on programs to move people into jobs.

Under both measures, states would be given lump-sum block grants to run their programs, which would be frozen at 1994 spending levels. Some welfare experts warned that, without additional funds, states will be unable to overhaul their systems.

Both bills significantly restrict welfare benefits to legal immigrants, although there are some essential differences. The House measure cuts more benefits for immigrants who are already in the country, and the Senate bill for the first time restricts benefits for naturalized citizens who immigrate after enactment.

Under both plans, a work requirement would be set for food stamps, and alcohol or drug addiction would no longer qualify a person for supplemental security income. Also, many of the disabled children who now receive SSI would become ineligible for cash benefits.

In heated debate before the vote, some of the 11 Democrats who later voted against the measure argued vehemently that the GOP measure would imperil children--who represent two-thirds of the nation’s 14 million welfare recipients.

Sen. Edward M. Kennedy (D-Mass.) recalled what President Franklin D. Roosevelt said in 1935 when the nation first made a pledge to guarantee cash assistance to every eligible family with children: “The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough to those who have little.”

Monday’s vote, Kennedy said, ensured that “a minimal safety net for children will no longer be a part of what makes America America.”

Sen. Carol Moseley-Braun (D-Ill.) warned that the measure would bring America “back to the bad old days of street urchins.”

Democrats who voted for the measure pointed to many revisions crafted alongside moderate Republicans during 98 hours of floor deliberations. Those changes included:

* Making a fourfold increase, to $4 billion over five years, in spending to pay for child care for children whose parents work.

* Requiring states to continue to fund welfare at a level equal to at least 80% of the amount they now spend.

* Creating a contingency fund of $1 billion over five years for states to tap if their welfare costs grow during times of high unemployment.

* Increasing to 20% the number of welfare recipients states may exempt from the five-year time limit.

* Striking from the measure a “family cap” provision, which would have forbidden states to increase cash assistance for families on welfare that have additional babies.

The changes drew opposition from some conservatives, including Sen. Phil Gramm (R-Tex.), a presidential hopeful who warned last Friday that unless the bill that comes out of the conference committee includes a family cap, he will vote against it. He said that the current version does not do enough to combat the problem of out-of-wedlock births, which now account for 30% of all births in America.

The House legislation, which passed on a largely party-line vote in March, included both a family cap and a prohibition against using federal funds for cash assistance for teen-age mothers.

“I feel very strongly that those provisions will be in [the final bill],” Shaw said.

The one Republican senator who voted against the bill, Sen. Lauch Faircloth of North Carolina, did so because of the failure of the Senate to include the two provisions.

Under the Senate bill, states would be permitted to enact either of those policies if they saw fit.

While the family cap and teen-age mother cutoff will be flashpoint issues in the conference committee, the biggest challenge will be reconciling differences in costs.

The House bill is estimated to save $102 billion over seven years, compared to $66 billion over seven years under the Senate bill.

“We are going to have to come up with that money or we are not living up to the budget we adopted,” Gramm said.

Despite all the attention given to differences between the House and Senate packages, the measures are far more similar than different. “The heart and soul of both bills is very close,” Shaw said.

House Speaker Newt Gingrich (R-Ga.) and the rest of the House GOP leadership made a rare appearance on the Senate floor as lawmakers cast their votes. They congratulated Dole for his legislative victory on a measure that is a cornerstone of the GOP agenda.

Passage of the bill came after months of delay because of in-fighting among Republicans over various provisions of the measure.

Last month, Dole stopped floor debate after it was already in progress because he could not get consensus in the GOP caucus.

But by passing the measure in such a lopsided vote, Dole secured a high-profile victory, a triumph all the sweeter coming after a series of legislative defeats on other key Republican priorities--as with the balanced-budget amendment and regulatory reform.

“My colleagues will remember that not long after the debate began, it appeared we had reached a roadblock,” Dole said in a floor speech. “And some in the media were quick to report that Senate Republicans had failed and that welfare reform was on its last legs.

“The media got the story wrong, because what’s on its last legs in this Congress is the status quo.”

* PUTTING AX TO MEDICAID: House GOP proposes $182 billion cut in Medicaid growth. A25

* COUNTY IMPACT: Ventura County may continue to get direct federal funding. B1