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As a part of our series of reports on the new welfare reform law, a look at the new law's impact on state governments. President Clinton is expected to address the issue in the State of the Union speech later this evening.

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ELIZABETH FARNSWORTH: As a result of legislation signed into law last year the 61-year-old federal guarantee of indefinite aid for the nation's poor is drawing to a close. We'll hear from our regional commentators about how their states are adjusting to the welfare changes, but first this backgrounder by Kwame Holman.

REP. NEWT GINGRICH, Speaker of the House: (July 24, 1996) They yeas are 256; the nays are 170; and the bill passes.

KWAME HOLMAN: Last summer, after a lengthy and sometimes rancorous debate, Congress passed and President Clinton signed landmark welfare reform legislation ending six decades of federal entitlements. The new law limits participants in the main welfare program, formerly known as Aid to Families with Dependent Children, to no more than five years of benefits and requires able-bodied recipients to find a job within two years. But the law also made a fundamental change in who administers welfare, shifting power and responsibility from the federal government to the individual states. President Clinton embraced the new welfare plan, but even as he did, he made it clear it wasn't exactly what he wanted.

PRESIDENT CLINTON: Today we have an historic opportunity to make welfare what it was meant to be, a second chance, not a way of life. And even though the bill has serious flaws that are unrelated to welfare reform, I believe we have a duty to see the opportunity it gives us to end welfare as we know it.

KWAME HOLMAN: The plan from Washington puts the onus on the states to move people from welfare to work. Washington provides block grants to pay for the programs. The states then are required to submit plans on how they will spend that money, this year by July 1st. Since the states now must grapple with its problems, welfare was high on the agenda for the National Governors Association meeting in Washington this week. One sticking point is that the new law prohibits legal immigrants from receiving benefits such as food stamps and disability checks. Governors from states with large immigrant populations say that means states that wish to pay such benefits must come up with their own funding. But after a meeting at the White House, the governors expressed confidence the legal immigrant problem would be resolved.

GOV. BOB MILLER, (D) Nevada: (yesterday) It is our opinion that Congress can resolve the problem without reopening the legislation; they can do it through immigration laws; they can do it through a budget reconciliation. There are many vehicles by which it can be addressed because immigration is, in fact, a federal program to begin with. And that's why we don't want to get bogged down in how it's resolved. We just want to be able to effectively administer programs.

KWAME HOLMAN: Senate Majority Leader Trent Lott told the governors he'd work with them on the sticky immigrant issue, but a new bill was out of the question.

SEN. TRENT LOTT, Majority Leader: (yesterday) It would be very hard for us to come back and open welfare up now, and it's as the saying goes: You open that barn door, and there's a lot of horses will come running out of there because it's very hard to bring it to closure, but we did bring it to closure, consulting with the governors, passed by the Congress, and signed by the president.

KWAME HOLMAN: The governors passed a bipartisan resolution asking Congress for help in getting benefits to legal immigrants, but they stopped short of demanding new legislation. Even if Congress solves the problem of legal immigrants, other questions remain, including exactly how flexible states may be in redesigning welfare programs, whether they may transfer welfare programs to local governments, and the impact of having welfare programs that vary dramatically from one state to another.

ELIZABETH FARNSWORTH: Now a look at some of the ways different states have approached welfare reform thus far. We get that from our group of regional commentators: Cynthia Tucker of the Atlanta Constitution; Mike Barnicle of the Boston Globe; Lee Cullum of the Dallas Morning News; and joining them tonight are Robert Kittle of the San Diego Union Tribune; and Tom Bray of the Detroit News. Bob Kittle, what's the status of welfare reform now in California?

ROBERT KITTLE, San Diego Union Tribune: (San Diego) Well, you know, Elizabeth, this really is an issue where the states truly are the laboratories of democracy. Congress did not really reform welfare last year. What it did really was to move the federal government out of the way and allow the states to go ahead and take on the job of reforming welfare.

So in California, the battle lines are really drawn. There are two competing plans that the legislature will consider. One was proposed by Governor Pete Wilson. It's a kind of tough love welfare reform. It seeks to provide incentives for personal responsibility to replace the kind of government paternalism that the current system tends to encourage and tends to breed dependency, intergenerational dependency, and it does that basically by imposing a one-year time limit on new recipients, new welfare recipients, and other measures to try to encourage personal responsibility. The competing plan, the Democratic plan, would basically perpetuate the current system largely as it now exists. It would allow recipients to continue receiving benefits for five years and then only reduce the benefit, instead of eliminating it, and it also would rely very heavily on government service jobs. In fact, it calls for about 93,000 community service jobs funded by government as a means of moving recipients off welfare.

ELIZABETH FARNSWORTH: So, Bob, just in summary, you're--California is currently debating what to do to meet the federal requirements?

ROBERT KITTLE: That's correct.

ELIZABETH FARNSWORTH: Okay. Because other states have actually gone some ways to meeting them. Let's move on now to Cynthia. Cynthia, how about Georgia? Georgia is a bit ahead on this, isn't it?

CYNTHIA TUCKER, Atlanta Constitution: Georgia is a bit ahead. Gov. Zell Miller was actually ahead of congress in tackling the welfare issue. He saw the handwriting on the wall. He knew that a bill was rolling through, and he was actually eager to get started in tackling the problem on his own in Georgia. He asked the Clinton administration for waivers, to vary from some of the laws that were in effect before the new bill passed. For example, Georgia enacted at Governor Zell Miller's instigation so-called family caps in 1994. That means that a woman does not get additional benefit if she has another--an additional child while already receiving welfare. So Georgia is a bit ahead of the game. Georgia's work first program has already moved about 70,000 former welfare recipients off the welfare rolls and into work. So Governor Zell Miller was cagy, was savvy, and he will probably manage to get his welfare proposals passed through the Georgia legislature this year.

ELIZABETH FARNSWORTH: Is there any response so far to this, or is this still too new?

CYNTHIA TUCKER: There will be some conversation, perhaps a little bit of debate, in the Georgia General Assembly. The governor is expected to get some criticism from the left. There will be those who say that his welfare bill has gone too far. For example, he has a very tough approach in some areas, rather than a five-year lifetime cap on benefits, as the federal law proposes, he says a four-year cap. There will surely be some dissent. On the other hand, he is softer in some areas. He wants to give legal immigrants at least one year of benefits. He will probably get some criticism from the right on that.

ELIZABETH FARNSWORTH: But, Cynthia, my main question: Is it still in the planning stages, none of this is happening yet?

CYNTHIA TUCKER: Oh, yes. Some of it--

ELIZABETH FARNSWORTH: Okay.

CYNTHIA TUCKER: --is already happening. The family cap is already law.

ELIZABETH FARNSWORTH: Okay. Tom, what about in Michigan?

TOM BRAY, Detroit News: (Detroit) Well, in Michigan, we--Gov. Engler, as you know, has been a leader in welfare reform nationally. He began implementing some of his own reforms several years ago. And the Michigan welfare rolls are down I think about 160,000 cases from a high of 240,000. Now, not all of this is due to welfare reform, obviously. The fact that the economy is going pretty well has a lot to do with it. Michigan's unemployment rate is below the national average now for the first time since 1969. And it's no accident that the caseloads are down to about the 1973 level.

ELIZABETH FARNSWORTH: And Lee Cullum, how about in your state, what's happening?

LEE CULLUM, Dallas Morning News: Elizabeth, Texas passed what I thought was a very decent welfare reform law in 1995, a year ahead of the federal government, and in spirit, if not in actual dollars, I think it's more generous than the federal plan. We're also experimenting with privatization, of putting up for bids a certification of people for the rolls. Lockheed Martin is running the jobs program here in Dallas, so that's been progressive. Our great problem is some of these cuts are really very punitive, by that I mean the federal cuts, the cuts in food stamps, the cuts in social supplemental insurance for legal immigrants will cost us $250 million a year. Gov. George Bush is calling for Washington to change that, and I think he's right in that call.

ELIZABETH FARNSWORTH: Now, Lee Cullum, how detrimental will it be to Texas if there are not changes in dealing with immigrants?

LEE CULLUM: Oh, It will be very detrimental.

ELIZABETH FARNSWORTH: Tell me what will happen.

LEE CULLUM: Well, it's going to cost each family on food stamps about $550 or $514, if I remember correctly, a year. So that's a family by family cost. That's really rather high for low income people. It's going to cost the state--there's a 20 percent across-the-board cut in food stamps. And, of course, a lot of those food stamps are going to legal immigrants. And so I think the dollar amount is going to be extraordinarily high and impossible for the state of Texas to make up.

ELIZABETH FARNSWORTH: And, Bob Kittle, what about California? I'm asking the two of you because you have the most immigrants among this group, I think, in your states.

LEE CULLUM: Yeah. That's right. California has about 40 percent of all of the legal immigrants in the United States, but in California, I think the impact will be significantly muted if the congress does what the Republican governors have asked them to do this week during the Governors Conference, which your report referred to, which is to allow legal immigrants who have difficulty in earning citizenship because they're ill or elderly, that they would be grandfathered in, those who are already here in the country would be allowed to continue to receive food stamps and SSI, a welfare program for the aged. So if that occurs, the impact will be limited. Just remember that where we're talking about the welfare bill limiting payments to legal immigrants, it's only legal immigrants who have not yet attained citizenship. Once they've obtained citizenship, which normally is a five-year process, then they are entitled to welfare benefits, and during the five-year period their sponsors who brought them into the country are supposed to be financially responsible for them.

ELIZABETH FARNSWORTH: And Mike Barnicle, somebody called this the greatest social experiment in America since the New Deal. How's it going in your state?

MIKE BARNICLE, Boston Globe: Well, it's going. It's been going for a little over a year. The Republican governor, Governor Weld, a Democratic legislature passed a massive welfare reform bill here, changed the name of the department from the Department of Public Welfare to the Department of Transitional Assistance. Right there you have a little cosmetics on top of it. It requires that anyone with school-age children must get a job and get off the welfare rolls within 60 days. That's two months. It requires that teen-agers receiving welfare assistance either in school or live at home. It requires that any woman who has a child while she is on welfare, that child does not receive any public assistance, and it places a two-year cap on receiving welfare benefits.

Oddly enough, it does not do what the federal bill does not do, and that is deal with what I call the geography of the poor and the culture of dependency that we have built up within this country. Most poor people I know, first of all, they don't want to be poor. Nobody I know wakes up saying, geez, what a great idea it is to be poor and be on welfare. They don't live near Hewlett-Packard or Microsoft. They live near MacDonald's and Burger King. Many of them don't have cars; they have access to public transportation. They have limited job skills. They don't have access to daycare. And this bill doesn't give them much access to daycare. It doesn't provide them with the kind of job skills that a Microsoft or a Hewlett Packard is going to hire them, so they're looking at really another dead end unless they get the education from K through 6 when they're growing up that they don't get from many of our public schools in poor sections. So it's a cyclical thing that just breeds the culture of dependency in this country. And that requires a lot more, I think, than these welfare reform bills.

ELIZABETH FARNSWORTH: Mike, already for various reasons, the number of people on the full--on welfare is going down in all the states, except for three, I think, Alaska, Hawaii, and one other state, and it's down dramatically in Massachusetts. Any evidence as to what's happened to those people?

MIKE BARNICLE: I think a lot of people have actually tried to get work, and that's a good thing, there's no doubt about that. I think some people have moved to other states, and again, as in Michigan, the economy here is pretty good, so there are then jobs available, more so than there would have been around five or six years ago.

ELIZABETH FARNSWORTH: Let me get some other views on Tom Brady. Way down in Michigan, these numbers too, any evidence to what's happened to those people? Are they just moving?

TOM BRAY: Well, no, the stories that we hear that people are going out and finding work, and they're pretty happy to be off of welfare with the kind of--a little bit of assistance. Gov. Engler's program is a combination of sticks and carrots, mostly carrots at the moment. We'll see what happens when the cut-offs finally arrive, whether, in fact, people do get cut off, and how the public reacts to that.

ELIZABETH FARNSWORTH: Is the reaction fairly favorable so far to all what's happened in your state?

TOM BRAY: I think very favorable. I think people knew that the system was rotten to the core and that something had to be done, and I don't think there's any appetite for going back into the welfare reforms of 1996 right now and rewriting them. I think people want to give those reforms a chance to work so we can see how it works.

ELIZABETH FARNSWORTH: Cynthia, how about Georgia, the numbers are down there too, any evidence about what's happened to those people?

CYNTHIA TUCKER: I think many of them have gone to work. As in the rest of the nation, the economy in Georgia is going well. It's especially strong in the Atlanta region. I think the big question is what will happen to all those folks once a recession hits? And I also think that is a point at which the country will become much more conscious of the price of this welfare reform. There is not a great deal of eagerness in Georgia either, as far as I can tell, to go back into the 1996 welfare reform bill. Georgia is a conservative state; many voters here--black and white by the way--wanted welfare reform. They were sick of the generational dependency it seemed to create but I don't think people have thought about the long-term, what happens once the economy goes sour. Does that mean that those families then end up on the streets and their children hungry?

ELIZABETH FARNSWORTH: And Lee Cullum, Texas, the numbers are down there too.

LEE CULLUM: The numbers are down in Texas also, Cynthia, and I think there's a real hope that people are going to work. We have a good jobs training program that was launched in ‘95. I think the real problem facing taxpayers now is the legislature's enormous task that will be involved in giving up the block grant from Washington. It won't go as far as it needs to go.

ELIZABETH FARNSWORTH: And Bob Kittle in California, not only--I'd like to know about the numbers but also this debate, how's it likely to turn out, first the numbers?

ROBERT KITTLE: Well, on the numbers, the welfare caseload in California has been declining for the last few years, and I think the principal reason for that, of course, is an improving economy, but we do have some anecdotal evidence at least that all of the talk of reform and the beginning steps of reform have encouraged more people to lead the welfare rolls, and, in fact, in San Diego County the welfare rolls for the general relief program, which is principally able-bodied adults without children, that number was cut in half when the county board of supervisors began implementing drug testing as a requirement. Some of those factors I think contribute to it.

ELIZABETH FARNSWORTH: Okay. And Bob, I can't take your answer on the other one because we're out of time but we'll get back to it another time. Thanks so much to all of you.

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