Clinton Raises the Stakes on Welfare Reform Plan : President demands changes that GOP is sure to reject : On the bitterly divided campaign trail, compromise becomes a badge of weakness.

President Clinton, his hand newly strengthened by the dogfight for the Republican presidential nomination, is playing hardball on welfare reform. The White House now insists on major changes to a bipartisan plan put forward by the nation’s governors that easily had the best chance of becoming law. While the president is right to insist on adequate protections for poor children, his stringent new demands could prolong a paralyzing partisan impasse.

Like the GOP plan, the governors’ version would grant greater flexibility to states and distribute federal funds by block grants. Unlike the GOP proposal, the governors’ plan would improve child-care subsidies for welfare recipients who go to work. This bipartisan approach, currently under discussion on the Hill, would also allow states to exempt up to 20% of their caseload from the five-year-per-family time limit on Aid to Families With Dependent Children, the nation’s largest welfare program. That’s a compassionate proposal, though a bit costly.

The third plan, the Clinton administration’s own, would require states to shoulder more of the welfare funding than the other proposals. States would also be required to provide housing vouchers for families thrown off of welfare. Republicans won’t look kindly on these new expenses, or the new requirements.

Clinton initially welcomed the governors’ plan, which though imperfect offers a solid example of the hard compromises that a Republican-dominated Congress and a Democratic White House should make. As a former governor--and a former president of the National Governor’s Assn., which drafted the plan--Clinton lauded the effort several weeks ago. But that was before this year’s presidential calculus changed.

Senate Majority Leader Bob Dole (R-Kan.) flunked New Hampshire. That embarrassing loss forced Dole to stay focused on winning subsequent primaries that should have been his for the asking. An impressive win in New Hampshire, as anticipated, would have allowed Dole to return to Washington with the political leverage to forge compromises on tough issues like welfare.

When he’s on the Hill, Dole is a deal-meister. Compromises are the building blocks of good government in Washington. On the bitterly divided campaign trail, compromise becomes a badge of weakness. Dole can’t afford to court consensus as long as Pat Buchanan nukes along, Steve Forbes throws money around and Lamar Alexander uses the word “generation,” as in “older,” when referring to Dole.

So in this climate, the political advantage goes to Clinton. He has the capital. But for how long? No matter what happens on the campaign trail, Republicans, at least for now, continue to run the House and the Senate--and dominate the stalled welfare debate. The governors’ proposal may rise again.