Welfare Reform Is Central as Clinton, Dole Jockey for '96

IT may go down as the first presidential debate of the 1996 campaign. President Clinton and Republican front-runner Bob Dole, the Senate majority leader from Kansas, went head to head in Vermont yesterday over welfare reform.

Speaking before the summer meeting of the National Governors' Association (NGA) in this picturesque lakeside city, the two leaders offered few surprises and only modest new proposals.

What mattered more was the opportunity. President Clinton sought to regain the high ground on an issue that he championed as a governor and promised to make a high priority early in his administration. Senator Dole, the GOP presidential front-runner, tried to reassert his leadership and break an impasse that has kept welfare reform mired in the Senate for weeks. He vowed that the Senate would not adjourn in August until it passed a welfare bill.

''They are both angling in different ways,'' says Norm Ornstein, a congressional scholar at the American Enterprise Institute in Washington. ''Dole is sending a message to three constituencies: the governors; his fellow senators and House members; and Republican primary voters. Bill Clinton pioneered the issue a couple of years ago, but then let go of it when he moved toward health care.''

Both sought to reassure governors from the two parties that federal welfare reforms would provide state leaders with adequate funding and flexibility. After all, noted Sen. Christopher Dodd (D) of Connecticut at a reception here Monday evening, governors ''are the guys who have to implement the reforms.''

The governors' concerns go beyond welfare. Republicans in Congress want to turn welfare and Medicaid, the health-care program for the poor, into block-grant programs to give states more flexibility. Mirroring a debate in the Senate, governors worry about how those block grants will be divided among the states. The precedent set by the welfare-funding formula could affect reform of Medicaid, a much more expensive program.

''We have serious differences over Medicaid and welfare,'' says Gov. Howard Dean (D) of Vermont, NGA chairman.

But Democratic and Republican governors agree that Congress can't throw all the reforms in at the end of the federal budget process this fall, Governor Dean says. ''When the budget comes, we're worried we won't have the ability to make up for substantial cuts at the state level.''

Closing the gap among the governors may be more important for Dole than Clinton. ''Having the governors united is a necessary but not sufficient condition'' for passing welfare reform in Congress, Dr. Ornstein says. ''If the governors squabble among themselves, it is much tougher for the Republicans to maintain ... unity.''

Gov. Kirk Fordice (R) of Mississippi agrees that Dole carries the burden. ''From the president I don't expect to hear anything new,'' he said. ''But it's Dole's problem to solve.''

Attempting to reassert himself into the debate over welfare reform, Mr. Clinton was set yesterday to outline a series of reforms to curb teenage pregnancy and decrease long-term dependency on welfare.

Although he had not yet spoken at press time, Clinton was expected to propose denying food stamps to welfare recipients who refuse to comply with state work requirements He was also expected to grant new waivers to West Virginia, Virginia, Texas, Utah, and California to pursue their own reforms.

Reports said the president would propose streamlining the process for granting waivers in five areas, including:

* Tougher work provisions for welfare recipients that include child care.

* Limits on the amount of time recipients can stay enrolled in the program.

* A requirement that teenage mothers live at home and stay in school.

* Tougher child-support enforcement.

* The use of waivers and food stamps to pay cash subsidies to private employers who hire welfare recipients.

For Dole, this is so much tinkering. Rather than hand out exemptions from the current system, he proposes turning the plethora of welfare programs into a handful of block grants. It is an approach he promised the governors that Republicans in Congress would also apply to Medicaid. ''The principle and wisdom of reform flows from the states up, not from Washington,'' he said.

Dole has been fighting for weeks to push through a welfare bill that has fallen prey to state and presidential rivalries. One of his chief opponents for the GOP nomination, Sen. Phil Gramm (R) of Texas, rallied the support of 23 colleagues against the bill on the grounds that it was neither tough enough nor fair on funding.

The funding question has since been resolved. Senators from Western and Sun Belt states sought assurances that under a block-grant system, their states would receive an adjusted allotment to keep pace with population growth. Republicans agreed to set up an $800 million fund for such funding corrections over five years.

Dole yesterday promised governors that states would receive at least level funding over five years, with new funds for growing states. He also proposed allowing states to decide whether to deny additional benefits to teenage mothers who have more children while receiving benefits. The provision attempts to placate conservatives who argue that denial of such benefits would increase incentives for abortion. Dole also promised to merge 88 job-training programs into block grants.