House, Senate Agree On Welfare Reform Plan

House and Senate Republicans announced agreement Tuesday on a comprehensive welfare bill that would let states replace the food stamp program and the national school lunch program with other forms of nutrition assistance, run by the states.

The agreement would also allow states to deny cash assistance to children born to poor unmarried women under the age of 18, many of whom are now entitled to welfare benefits.

In addition, the bill would state, as a matter of national policy, that federal money could not be used to increase benefits for mothers who had additional children while they were receiving cash welfare assistance. But states could override this “family cap” with a vote by their state legislatures.

The most important provision of the welfare bill was never in doubt: it would end the 60-year-old federal guarantee of some minimal cash assistance for poor children. Each state would receive a fixed amount of federal money to design and run its own cash assistance program, replacing Aid to Families With Dependent Children. These block grants would total $16.3 billion a year.

The agreement on welfare is part of sweeping legislation to balance the federal budget in seven years. The legislation would also cut taxes and curb federal spending on Medicare, Medicaid, student loans, farm subsidies and myriad other programs.

The welfare proposals will be submitted to President Clinton as part of the budget bill and as a freestanding measure, because Republicans want to test Clinton’s campaign commitment to “end welfare as we know it.”

Clinton’s chief of staff, Leon Panetta, said Sunday the president would veto the welfare bill because it would cut too much from school lunches, child care, food stamps, Supplemental Security Income for disabled children and certain types of assistance for legal immigrants who have not become citizens.

Under the compromise announced Tuesday, states could receive extra money if they reduced the out-of-wedlock birth rate, described as an “illegitimacy ratio” (out-of-wedlock births as a fraction of total births).

If a state reduced its ratio by 1 percentage point, its block grant would be increased by 5 percent. And a state would receive 10 percent more federal money if it reduced the illegitimacy ratio by 2 percentage points or more.

Conferees are also close to final agreement on major changes in Medicare, the federal health insurance program for 37 million people who are elderly or disabled. Rep. Dennis Hastert, R-Ill., said the conferees had agreed to establish a new minimum for Medicare payments to health maintenance organizations: $300 a month for each beneficiary in 1996 and $350 in 1997.