Clinton Is Urged Not to Sign On to Governors’ Plan

A day after the nation’s governors offered him a plan that might break the budget stalemate, President Clinton came under mounting pressure Wednesday from within his own party to keep his distance from their proposals to reshape the huge Medicaid and welfare programs.

Democrats, who were initially guarded about the plan, were arguing that Clinton’s signature on such a deal would hand Republicans a big victory, while undoing basic Democratic legislation.

Combined with sniping from some members of the GOP rank and file that the plan costs too much and fails to follow conservative social principles, these criticisms appeared to reduce chances that the delicately balanced proposal would survive its upcoming trip through Congress.

“This is a huge victory for the Republicans and a big loss for the president, if he signs on,” said Rep. Robert T. Matsui (D-Sacramento). “And I would urge him not to.”

The proposals were accepted by a unanimous vote of the National Governors’ Assn. at the group’s winter meeting on Tuesday. Hearings on the plan may begin in two weeks.

The Medicaid reform proposal would give the states greater flexibility to design their own programs and to control the programs’ costs, while still trying to guarantee that the aged and needy receive health care. But the critics contend that the proposal would effectively end the guarantee by allowing governors much greater latitude to define which older people, disabled and children get covered and how much in services they are provided.

“This ends the federal entitlement and replaces it with a block grant,” said Rep. Henry A. Waxman (D-Los Angeles). “That’s the proposal we fought against and the one that the president objected to. I don’t see how he can support it now.”

The welfare proposal, designed to push more recipients toward work, includes several features that the Democrats like, including more money for child care and bonuses for states that succeed in finding jobs for welfare recipients.

Yet the critics see holes in it as well. It is not clear who will be exempt from the plan’s five-year limit on benefits. And some fear that it could allow states to cut back on their commitment to the food-stamp program that the federal government has viewed as an essential safety net.

When Clinton suggested earlier this year that he could accept a GOP version of welfare reform that ends the so-called “entitlement” status of welfare, he came under heavy fire from liberal Democrats, including Sen. Daniel Patrick Moynihan (D-N.Y.). Asked about the governors’ recommendations Wednesday, Moynihan said tersely that “they are headed into hearings. . . . I’d be appalled” if the welfare recommendations were enacted.

At the White House, officials continued to praise the governors’ proposal as a constructive move. Carol Rasco, assistant to the president for domestic policy, called the proposal a “very positive step” and observed that such proposals from the governors often emerge as initial blueprints rather than “something that is complete.”

But another senior administration official said that the Medicaid proposal will deserve Clinton’s support only if it remains a national program with standards that apply uniformly. And he suggested that the governors’ design may not make that possible.

“You couldn’t have one set of rules for a poor pregnant woman and another for a person with AIDS,” this official said.

The administration wants all those currently eligible for benefits to keep their coverage. But the governors want to eliminate coverage for, among others, 3 million poor children in families with incomes somewhat above the poverty line.

Many observers see another factor that could undermine the chances of the proposal: its cost. Republicans began their quest for Medicaid and welfare reform looking for savings in federal programs.

But these latest proposals would clearly absorb some of these hoped-for savings--for the federal government, if not the states. The GOP’s target of $100 billion in savings from welfare likely would dwindle far below that figure. And some analysts predicted that those savings could rise further when the plan is evaluated by the Congressional Budget Office.

Many Republicans were delighted that the governors embraced some of the central elements of their welfare-reform bill--including the idea of transforming the program into a lump-sum payment to states with few strings attached and of ending the 60-year-old federal guarantee of benefits to all who qualify. The GOP conceded far more under the governors’ agreement on Medicaid, which would still guarantee benefits to poor people. But the plan did give states more elbow room in administering Medicaid.

“I’m willing to go with this as a giant step forward,” said House Majority Whip Tom DeLay of Texas, a staunch GOP conservative. “I can’t guarantee every House Republican would support every part of the agreement . . . but House Republicans feel vindicated that their basic principles have been promoted by this agreement.”

GOP leaders have promised to begin prompt legislative review of the governors’ proposals.

But to actually move the legislation, Republicans will have to confront a basic split in their ranks. Some--like Rep. E. Clay Shaw Jr. (R-Fla.), chairman of the Ways and Means human resources subcommittee--want very much to enact welfare-reform legislation, even if it means compromising on key points. Other Republicans would rather have no bill than one that gives away too much.

“There’s a lot of concern among some of our members that the governors went a little too far,” said Sen. Rick Santorum (R-Pa.). “In Medicaid, they gave away the store. In welfare, the structural changes are still there but they are spending $10 billion more . . . in some questionable areas.”

DeLay said that he expects pockets of GOP resistance to a variety of other provisions, including proposals to increase the federal share of Medicaid costs, to water down proposals designed to discourage illegitimate births to those on welfare and to provide a backup fund for states in economic downturns.

Among those who object to the governors’ treatment of the problem of out-of-wedlock births is Rep. James M. Talent (R-Mo.), who called the proposal ‘totally unacceptable. . . . It would mean a tremendous step backward.”

Times staff writers Robert A. Rosenblatt and Richard T. Cooper contributed to this story.