Clinton’s Signature Launches Historic Overhaul of Welfare

President Clinton on Thursday signed historic legislation intended to “re-create the nation’s social bargain with the poor” by transferring control of major anti-poverty programs to the states, along with the financial responsibility for keeping them afloat.

The sweeping welfare measure, crafted by Republican lawmakers and embraced with some hesitation by Clinton and congressional Democrats, reverses the course of federal social policy by ending a 61-year guarantee of cash assistance to every eligible poor family with children.

The new law makes fundamental changes in federal safety-net programs dating back to the New Deal and Great Society eras. It represents the most significant legislative change wrought by either Clinton or the Republican majority that took control of Congress two years ago.

In place of an open-ended federal program, cash welfare will be converted to block grants to the states. For the first time, poor families will be limited to a maximum of five years of federal cash assistance. Recipients will be required to work within two years of the time they sign up for welfare.

Freed from most federal regulations, state governments will have far more freedom to design their own programs to move welfare recipients into jobs. They may launch their new programs as soon as they submit plans to Washington and must do so by July 1, 1997.

California Gov. Pete Wilson moved quickly to implement the new law. State officials said he will issue an executive order next week to cut off aid to illegal immigrants. More than two dozen state programs--ranging from prenatal care to housing assistance--may be affected.

The legislation will send fiscal shock waves through states with high immigrant populations, and no state will be harder hit than California. Of the $54 billion in savings expected from the legislation during the next six years, $24 billion will come from restricting benefits to legal immigrants.

California stands to lose $6.8 billion in the next six years as a result of the aid reductions mandated by the law, according to an official state analysis released this week. Some welfare experts estimate that the state’s loss will be much greater.

California and other states with similar populations face a difficult choice. They can choose to divert scarce state funds to continue providing benefits to legal immigrants or risk the consequences of letting thousands of poor people go without support. Immigrants will begin losing benefits Jan. 1.

Reductions in the food stamp program represent another significant source of savings. The law reduces food stamp allotments across the board and denies benefits to unemployed adults without children who fail to find work within three months. Some of the food stamp reductions take effect immediately. Others will be implemented during the next year.

During Thursday’s signing ceremony in the White House Rose Garden, Clinton criticized the cuts in immigrant benefits and food stamps as excessive. He said he was signing the measure despite those objections because he supports the larger goal of ending the current cash welfare system, which he blamed for fostering a culture of dependency on public assistance.

“We can change what is wrong,” Clinton said. “We should not have passed [up] this historic chance to do what is right.”

At a campaign appearance in New Jersey on Thursday, GOP presidential nominee Bob Dole sought to claim credit for what he called “the Dole welfare bill.” He declared: “The success of this historic effort is welcome news to those of us who have been leading the fight to end our failed welfare system. . . . My only regret today is that President Clinton did not join with us sooner”--a reference to Clinton’s vetoes of two earlier welfare reform measures.

GOP Resists Changes

Congressional Republicans said it is unlikely that Congress will agree to significant changes in the new law, particularly if the GOP retains control of the House and Senate. Besides the political obstacles, budget rules would require offsetting cuts in other areas of federal spending if benefits were restored for immigrants and food stamp recipients.

“The reality of it is that that’s an awful lot of money,” Rep. E. Clay Shaw Jr. (R-Fla.), the legislation’s chief author, said of the savings generated by the benefit cuts.

Shaw defended the underlying rationale for reducing benefits received by immigrants. “This is not a question of being cruel to immigrants,” he said. “Immigrants sign a pledge that they are not going to become public charges when they come to America.”

In Sacramento, sources said Wilson aides met privately Thursday with key legislative leaders to discuss the imminent executive order that would cut benefits for illegal immigrants, who have been targeted for years by the governor but have been protected by Democrats.

Officials said they expect the order, to be issued as early as Monday, to be challenged in court.

The governor’s order would seek to halt benefits such as prenatal care for illegal immigrants, sources said. One official said it probably would not become effective for 30 to 60 days in order to give county officials time to prepare for the change.

“The provisions that relate to the welfare bill with regard to illegal immigrants, we should be able to implement very quickly,” said Sean Walsh, Wilson’s press secretary. “The elements that relate to legal immigrants and overall welfare reform require continued evaluation to determine what laws need to be changed and what can be done administratively.”

One source said the governor would propose legislation to maintain nursing home care for legal immigrants. Another official said the governor also is likely to support continued care for elderly illegal immigrants.

Illegal immigrants would remain eligible for emergency medical care.

One official said state attorneys believe that the federal law already provides for an immediate cutoff of services to illegal immigrants. But, the source said, after consultations with Atty. Gen. Dan Lungren’s office, officials decided to implement the action with an executive order.

Political Battles

The signing ceremony at the White House culminated a four-year partisan struggle over the future direction of federal policy for mitigating the effects of poverty. It seemed a bit odd, Republicans noted, that there were only a handful of GOP lawmakers at the signing ceremony, because the law more closely resembles the Republican vision of welfare reform than it does Clinton’s initial reform proposal.

“This is clearly a Republican bill, there’s no doubt about it,” Shaw said after the ceremony.

Although enactment of the measure effectively ended Clinton’s long-running feud with Republicans over welfare policy, it started one with many in his own party. As Clinton signed the measure, liberal activists who have long been reliable supporters of Democrats protested outside the White House, chanting: “We’ll remember in November!”

“I won’t vote for someone who is willing to seriously hurt children and old people just to get reelected,” said demonstrator Naki Stevens, 46, a resident of Vermont.

Internal Debate

Even the White House staff initially was divided over whether Clinton should sign the measure. Some aides urged him to veto it, arguing that it will put poor children and immigrants at too much risk. But Clinton’s political advisors stressed that signing the measure seemed essential for a president who pledged to “end welfare as we know it” in his first campaign and who is determined to project an image as a “New Democrat.”

Wendell Primus, one of the administration’s chief welfare policy officials, resigned because of the president’s decision. To do otherwise, he said, would force him to “disown” the critical impact analyses produced by his office. Primus’ studies concluded that the law will not provide states with enough resources to help welfare recipients get the training and education they need to move into jobs and will add more than 1 million children to the poverty rolls.

Clinton tried to appease his critics by emphasizing his determination to fix what he considers to be mistakes in the legislation and by challenging the country to provide the jobs needed for poor parents who are forced to enter the work force.

“Now that we are saying with this bill we expect work, we have to make sure the people have a chance to go to work,” Clinton said. “If we really value work, everybody in this society--businesses, nonprofits, religious institutions, individuals, those in government--all have a responsibility to make sure the jobs are there.”

The law makes extensive changes in an array of federal social programs:

Cash Assistance

States will receive lump-sum block grants to provide cash assistance to poor families with children. The grants replace the Aid to Families with Dependent Children program, which obligated Washington to provide benefits to every eligible family. States have until July 1, 1997, to submit their plans for distributing cash assistance and moving parents into jobs.

States are forbidden from providing cash benefits to families for more than five years in a lifetime, but may exempt up to 20% of their welfare recipients. They must require most recipients to go to work within two years of applying for benefits. By 2002, 50% of each state’s welfare recipients must be working in some capacity. States may chose to impose shorter time limits or require recipients to work sooner than specified by the federal law.

Teen mothers must finish high school and live at home or with another adult to qualify for cash support.

Most states already have received waivers from federal law to conduct welfare reform experiments. If those waivers are inconsistent with the new law, states may continue their own programs until the waivers expire. For example, 30 states and the District of Columbia have received permission to impose their own time limits on welfare benefits. Many of these waivers are more lenient than the new law because they permit recipients to continue receiving benefits if they remain unemployed despite their efforts to find work.

Congressional Republicans are concerned that the waivers will undermine the new law and criticized the administration for continuing to grant them even after Clinton agreed to sign the welfare legislation.

Immigrant Benefits

The measure fundamentally alters the federal government’s relationship with legal immigrants, who until now have been eligible for most forms of public assistance.

Under the new rules, immigrants will be required to work and pay taxes for 10 years before they can qualify for such federal benefits as Supplemental Security Income or food stamps.

States are given the option to continue providing benefits funded jointly by the federal and state governments--including cash assistance and Medicaid (MediCal in California)--for legal immigrants who currently receive them. Immigrants who arrive in the country after the legislation takes effect cannot receive those benefits for the first five years they live here.

States cannot begin cutting benefits for immigrants now receiving them before Jan. 1. State officials said benefit reductions will be imposed as part of the annual review process for individual recipients.

The immigrant aid cuts will hit California particularly hard. About 40% percent of all immigrants currently receiving benefits reside in the state.

Food Stamps

The law will reduce spending on food stamps by $23 billion during the next six years. Although food stamps will remain a federal program, the measure reduces benefits and tightens eligibility standards.

For the first time, able-bodied adults without dependent children will be limited to three months of food stamps in any 36-month period unless they find work. Recipients who are laid off are entitled to an additional three months while they look for work.

The legislation mandates an across-the-board 3% reduction in the monthly allotments received by all food stamp recipients. In addition, the law adds other restrictions to the formula used to calculate individual benefits, which means that many recipients will experience an even larger reduction. These cuts will be felt by working families as well as those on public assistance.

Clinton criticized the across-the-board cuts. Instead of “punishing people who are working for a living already,” he said, the government should “do everything we can to lift them up and keep them at work and help them support their children.”

The food stamp reductions take effect at different times. For immigrants who submit new applications for food stamps, the cutoff is effective immediately. Most of the formula changes take effect on Oct. 1. States have three months to notify able-bodied adults without children about the new work requirements, at which time the three-month clock begins ticking.

SSI and Child Support

The legislation tightens the eligibility criteria for disabled children seeking cash benefits under the Supplemental Security Income program. Behavioral problems no longer will be considered a qualifying disability.

The law overhauls federal and state child-support systems, requiring the use of new enforcement techniques to track down noncustodial parents who fail to pay child support. It eliminates the $50-per-month payment received by welfare recipients when noncustodial parents pay child support and allows former recipients to retain more child support.

Under the measure, employers are required to report the names of people they hire to a newly created national registry. This provision is expected to help states find parents who are delinquent in child-support payments and expedite the process by which states seize their assets.

Times staff writer Dave Lesher contributed to this story from Sacramento.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

The New Era

A historic overhaul of the nation’s welfare system was signed into law Thursday, compelling recipients to go to work and ending six decades of guaranteed federal cash assistance. The new law triggers a huge governmental transformation as state governments take over most welfare programs.

****

WHAT THE MEANS FOR CALIFORNIA

* State expects an overall cut in federal aid of $6.8 billion in the next six years.

* Legislature and governor must develop new state welfare program, to be paid for with federal block grants and state money. Aid recipients must find work within two years.

* A 4.9% cut in welfare payments (higher in rural areas) for 2.7 million Californians getting via Aid to Families With Dependent Children program.

* An estimated 173,000 legal immigrants statewide will lose Supplemental Security Income money for low-income elderly, blind and disabled.

* Most legal immigrants will also be ineligible for food stamps.

* A 3% cut in food stamp benefits kicks in right away with more cuts ahead.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Outline of the New Law

Major provisions of the welfare reform legislation signed into law Thursday by President Clinton:

AID TO FAMILIES

WHAT’S REQUIRED OF STATES

The primary cash welfare program, Aid to Families with Dependent Children, will be abolished, eliminating the federal government’s guarantee that all eligible citizens will receive benefits. It will be replaced by block grants to the states, which now have more flexibility to design their own cash welfare programs, subject to these requirements:

* States must submit comprehensive welfare plans and convert to block grants no later than July 1, 1997.

* States must place at least 25% of cash welfare recipients in jobs or work programs by 1997, and 50% by 2002.

* Federal funds cannot be used to provide cash benefits to adults who fail to find work within two years.

* Federal funds are limited to five years of assistance in a lifetime; states can exempt 20% of recipients from this requirement.

* Cash aid is reduced by 25% for recipients who do not cooperate with child support enforcement agencies or in establishing paternity.

* States have the option to deny additional cash aid to children of welfare recipients.

* Federal funds cannot be used for aid to unmarried parents under 18 unless they live with an adult and attend school.

* States have the option to deny cash assistance altogether to unmarried parents under 18.

* States that have received federal waivers to conduct reform programs may continue to operate under those waivers.

CALIFORNIA CONNECTION: As of May, 2.7 million Californians were receiving public assistance through AFDC. Of these, 1.8 million were children. The state has already approved plans for a 4.9% cut (higher in rural counties) in cash benefits expected to take effect in late fall. By next July, the state must submit a plan to the federal government outlining how it intends to use federal block-grant money that replaces the AFDC program.

****

FOOD STAMPS

WHAT’S REQUIRED OF STATES

Food stamps will continue to operate as an “entitlement” program, which means that the federal government guarantees that all eligible recipients will receive benefits. But the benefit formula and eligibility criteria are tightened, producing significant savings for Washington and imposing new financial burdens on states that leave their current programs unchanged.

* Individual food stamp allotments would be be reduced across the board by 3%.

* The standard deduction applied to food stamp applications to determine eligibility will no longer rise with inflation.

* The deduction for housing costs will be frozen at $300 per month, beginning in 2001.

* Able-bodied adults with no dependents lose food stamps after three months (six months if laid off) unless they work 20 hours per week.

CALIFORNIA CONNECTION: There are now 3.2 Californians receiving food stamps. When fully implemented, the average household benefit in California will be cut by 19%. Most cuts willtake effect immediately.

****

IMMIGRANTS

WHAT’S REQUIRED OF STATES

Federal assistance for immigrants who are living in the country legally but have not become citizens is significantly reduced. This accounts for much of the overall savings Washington hopes for. The immigrant benefit cuts will hit particularly hard in California.

* Most legal immigrants are denied food stamps and Supplemental Security Income--the federal assistance program for low-income elderly, blind and disabled Americans--until they become citizens or work in this country for 10 years.

* States can continue to provide legal immigrants already living here with aid for families with children, as well as Medicaid (Medi-Cal in California).

* Legal immigrants who come to this country after the bill takes effect cannot receive aid for families and Medicaid for five years.

* Benefits for refugees, veterans and immigrants granted asylum are not affected.

* Illegal immigrants are denied virtually all federal assistance except short-term disaster relief and emergency medical care.

CALIFORNIA CONNECTION: This state leads the nation in number of legal immigrants, and about two-thirds of the welfare funding cuts for California are in this section of the law. The state estimates that $5.9 billion in aid to noncitizens will be cut over the next six years, including $3.7 billion in SSI. As of last December, 322,000 legal immigrants were receiving SSI benefits in California. The Department of Social Services estimates that about 173,000 of them will lose benefits. The SSI cuts will take effect following each recipient’s annual SSI benefit review. Food stamp cuts for immigrants will affect about 270,000 recipients.

****

SUPPLEMENTAL SECURITY INCOME

WHAT’S REQUIRED OF STATES

The federal assistance program for low-income elderly, blind and disabled Americans will be continued. But eligibility criteria are tightened to reduce future outlays.

* Children no longer qualify for SSI benefits unless they have a medically proven disability that causes “marked and severe functional limitations.”

* Most elderly immigrants are denied SSI benefits unless they obtain citizenship or work in the United States for 10 years.

CALIFORNIA CONNECTION: There are now 1,035,000 Californians receiving SSI benefits and 87,000 of them are under age 18. The Department of Social Services estimates that about 14,000 children would be subject to reevaluation of their SSI benefits.