Clinton Reconsidering Senate Welfare Bill, Aide Says : Legislation: President had indicated he could sign measure. But he is taking a ‘second look’ at its impact on children, his campaign confirms.

President Clinton is backing away from his earlier indications of support for a Senate version of Republican welfare legislation, a Clinton campaign official confirmed Monday.

Clinton’s view on the bill now is, “Let’s take a second look at what it’s going to mean to children,” said Ann Lewis, deputy director of “Clinton-Gore ‘96,” the President’s reelection campaign.

And a senior White House aide, who declined to be identified, said: “The President is mightily concerned with the cumulative impact of the Senate welfare bill in combination with all of the other cuts the Republicans are pushing--Medicaid, earned-income tax credits, cuts in education.”

A congressional conference committee is trying to devise a compromise between the tough Senate welfare bill and an even more stringent House measure. Clinton has criticized the House bill as being too harsh. But he has said that despite some reservations, he could sign the Senate version, which Democrats supported, 35 to 11.

Lewis said that Clinton’s concerns were articulated in an open letter to him from Marian Wright Edelman--a close friend of the President and of First Lady Hillary Rodham Clinton. Edelman, as president of the Children’s Defense Fund, is a leading advocate for children. Mrs. Clinton, a longtime children’s advocate, is a former chairwoman of the fund.

The letter, published Saturday in the Washington Post, called the Senate and House bills “fatally flawed, callous, anti-child assaults.” She urged Clinton to show “unwavering moral leadership for children and opposition to Senate and House welfare and Medicaid block grants, which will make more children poor and sick.”

Sources said the letter dismayed some Clinton political advisers, who have counted on him to sign welfare reform legislation. Doing so would enable the President to argue during his reelection bid that he had fulfilled a 1992 campaign pledge to “end welfare as we know it.”

Dick Morris, Clinton’s chief outside political adviser, was said to be especially upset because he views such reform legislation as the President’s last best chance of demonstrating that he is tough on welfare abuses. Morris has led recent efforts to portray Clinton as a centrist and to distance him from Democratic liberals.

The President’s dilemma on welfare reform has been a topic of heated debate within the Administration for some time, especially since Oct. 27--when The Times disclosed that a “draft” report prepared by the Department of Health and Human Services estimated that the Senate bill would push about 1.1 million children into poverty and worsen conditions for those already below the poverty line.

The White House received the study before Clinton signaled that he would not veto a welfare measure if it were similar to the Senate package. Administration sources told The Times that the report, dated Sept. 14, had been carefully guarded by the White House for fear its disclosure would reflect poorly on the President.

The Senate bill would end the federal guarantee of cash assistance to poor mothers with children, give states block grants to create their own programs, freeze federal welfare spending for five years, require recipients to work after two years and limit assistance to five years in a lifetime.

The HHS study of the Senate bill was described as “preliminary” by White House officials. They said several departments, including Treasury and the Office of Management and Budget, have been conducting a more thorough review of the bill and its potential impact on children.

A report of the more extensive review was scheduled to be completed today, but a senior White House official said Monday that it probably would be delayed because of Clinton’s attendance at the funeral of Israeli Prime Minister Yitzhak Rabin in Jerusalem.

The official, who has been involved in the welfare reform discussions, said the draft report “had not been vetted, so they’ve essentially taken it and have been doing a more serious analysis.”

Commenting on Edelman’s open letter to Clinton, the official said he was “sympathetic to her role and her position, and her role is to push everybody, and she decided she should push us.”

But, he said: “I’m also sympathetic to the President and his position, and it’s a tough issue. He’s been fighting mighty battles for children across the board--education, Medicaid, everything.”