Who Feels Welfare Overhaul

Congress is getting closer to producing welfare-reform legislation President Clinton may be willing to sign.

But even with the White House-favored revisions made by the Senate, which passed its latest bill Tuesday, a debate is still reverberating over how the plan would affect children.

Like the previous versions of reform that Mr. Clinton vetoed, the latest bills would end the federal guarantee of cash aid to poor families, impose a two-year limit on welfare for heads of households, and set a five-year lifetime limit. A federal contingency fund for use during a recession was boosted from $1 billion to $2 billion, but child advocates say that would not cover anticipated need.

"No one can deny that the current system is broken and badly in need of reform," said Sen. Christopher Dodd (D) of Connecticut. "But we shouldn't in the process just jettison basic protection for families all in the name of political expediency and punish children for their parents' mistakes and misfortunes."

Conservatives argue that nothing can be crueler to children than the current system, which, they say, traps families in a cycle of dependency and dooms children to a lifetime of poverty.

Predicting how major welfare reform would actually impact children is virtually impossible.

"The end of an entitlement and the imposition of time limits are not something we have any experience with," says Tom Kaplan, a research scientist at the Institute for Research on Poverty at the University of Wisconsin.

Pilot programs in welfare reform in various states are too new to produce firm conclusions on the effects on children, Mr. Kaplan adds.

But the fact that children represent the largest constituency affected by welfare - and the drive to overhaul the system - is beyond dispute. Of the 12.6 million people currently receiving Aid to Families with Dependent Children, the federal cash aid program, two-thirds are children.

Last December, the White House Office of Management and Budget (OMB) released a report saying the welfare reform bill passed by Congress at the time would have put 1.5 million more children in poverty and deepened the poverty of many others. Clinton cited that report when he vetoed the bill.

Since then, OMB has not updated its assessment of reform's impact on children. Indeed, the latest version changed hourly as the Senate considered amendments and passed a few. But liberal child advocates argue that the basic outlines of welfare reform remain the same, and therefore the impact would still be devastating to many children.

ADMINISTRATION officials are now hedging their comments about Congress's latest efforts, as the president considers the political ramifications of vetoing versus signing whatever ultimately crosses his desk.

Before he faces that choice, a House-Senate conference must come up with a compromise version of their two bills, which are similar but not identical. White House chief of staff Leon Panetta has worked closely with Republican congressional leaders on the latest version of welfare reform, a signal that Clinton wants Congress to come up with something he might sign.

One official at the Department of Health and Human Services, in an interview, highlighted the ways in which the Senate bill had been modified to become more acceptable to the Clinton administration:

*Medicaid coverage - federal health insurance for the poor - would be guaranteed for people cut from welfare.

*The federal guarantee of food stamps for the poor would be retained. (The House bill calls for lump-sum payments to states, or block grants.)

*Funding for child care has been increased from the level of previous welfare-reform bills.

But other changes backed by the Clinton administration did not pass. One was a provision to allow legal immigrants to continue receiving public assistance. Another would have allowed states to give non-cash assistance to families that had reached the end of their time limit. Such vouchers would be designed in particular to allow families to provide necessary items for children, such as diapers and school supplies.

In addition, even though food stamps would remain an entitlement under the Senate plan, the overall level of funding would be cut. According to the Congressional Budget Office, most of the seven-year, $59 billion savings in the latest Senate welfare plan would come from cutting food stamps and aid to legal immigrants.

Ultimately, predicting the behavior of welfare recipients - and the impact on their children - is contingent on many factors, some of them psychological and therefore hard to include in economic models. Many states have reported a dramatic decline in welfare rolls in recent years, some of which is attributed to the public's growing impatience with welfare recipients. Talk of time limits has spurred some welfare mothers to pull their lives together and try to get training for work.