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Background Briefing by Senior Administration Officials

June 14, 1994

Commerce Bank

Kansas City, Missouri

2:00 P.M. CDT

SENIOR ADMINISTRATION OFFICIAL: Good afternoon. We're going to do a BACKGROUND BRIEFING here. The ground rules are, we're senior administration officials. I'm going to make a few comments about the general issue, and then we'll be happy to take any questions you may have.

First of all, as you can see from the President's speech, welfare reform is an issue that has been important to him for a long time. He worked on this issue as governor of Arkansas. He was head of the NGA's task force on welfare reform, which helped lead to the Family Support Act, which he helped author with Senator Moynihan and others in 1988.

And in the campaign, he said, first at Georgetown and then throughout the rest of the campaign, that it was time to end welfare as we know it. He took steps early in the administration to begin to do that, which he alluded to today. The first was the dramatic expansion of the earned income tax credit, which is a tax cut for working families which will help lift 15 million families out of poverty, turns a minimum wage job into a $6.00 an hour job. And it will enable us to make good on the President's pledge that no one who works full-time with a child at home should be poor.

Welfare reform is also closely tied to another core element of the President's agenda -- health care. As he said, we can't have serious welfare reform without serious health care reform. We need to make work more attractive than welfare, and health reform is essential to doing that. And then, finally, it's part of his larger economic plan -- and the figures, as he gave you in his speech, 3.4 million jobs created in the last 17 months, 3.1 million of those in the private sector.

This is a very dramatic departure for the welfare system. These are the first time limits and serious work requirements in the history of welfare, the toughest child support enforcement measures ever proposed by any administration, and a focus on the next generation with the first true national campaign against teen pregnancy and out-of-wedlock births -- an issue that was first raised to the national scene in 1965 when Senator Moynihan published the Moynihan Report.

We also think that it will have very dramatic impacts; that these reforms taken together -- EITC, health reform and welfare reform -- will move one million people who would otherwise be on welfare off of welfare or into work by the year 2000; that we'll be able to double the amount of federal child support collection from $9 billion to $20 billion over that period; and that we'll also be able to achieve significant savings from reduced caseloads and welfare fraud.

Let me just say one word about the political climate that this package comes out in. The President wants very much for welfare reform to be a bipartisan issue. It has always been a bipartisan issue across the country for governors. He wants to work hand in hand with Democrats and Republicans. We tried to reach out to Democrats and Republicans in developing this plan, and we've gotten a very positive response.

Yesterday the House Minority Whip, Newt Gingrich, said that our welfare reform plan was, "a step in the right direction." We've also gotten positive signs from other Republicans in the House, and you should have a copy of a bipartisan letter that was signed by the National Governors Association with the signature of Carroll Campbell, John Engler, as well as the leading Democrats on this issue -- Howard Dean and Tom Carper. And we hope that it remains a bipartisan debate. Work and responsibility aren't Republican values or Democratic values, they're American values. And we ought to work on them together.

There will undoubtedly be in the days to come reactions from the far extremes, but the vast majority of the American people are with us on this. And when as many Americans want something as badly as the people want welfare reform, sooner or later it's going to happen.

I'm sure you've got specific questions about the plan, and why don't we turn to them.

Q: I wonder, on WORK -- first of all, is that an acronym or is that -- it's not. It's called the WORK -- all caps -- program.


Q: Okay. On something about that, is that a registry of jobs? Is it a referral service? How is it going to work?

SENIOR ADMINISTRATION OFFICIAL: The way the system works is that people on welfare will be subject to a two-year time limit during which time they can get training, child care, and so on. At the end of the two years at the most, people will be required to move into work. Every effort will be made throughout the program to try to move them into the private sector, including up-front job search when they first come on the welfare rolls, and training that is connected to the job as much as possible. But if after two years they're still on welfare, then they'll be required to take a subsidized job either in the public sector or in community service.

SENIOR ADMINISTRATION OFFICIAL: Essentially after the two years, the money you would have spent on the welfare check plus some additional money for job development will be used to find jobs for people in a subsidized job when they've been unable to find an unsubsidized job. It may be subsidized private sector jobs. It may be working with local nonprofits, where you say, we'll pay the wages if you'll provide the supervision. It may be a job, say, with local government. So the idea is you take the money and you redirect it towards getting people work that they would --

Q: At that point, there's no more AFDC, there's no more food stamps or the card or any of that? The benefits are gone at that point?

SENIOR ADMINISTRATION OFFICIAL: This is only affecting the AFDC check. The food stamp program, Medicaid coverage and so forth are still continuing.

Q: What's the mechanism for verifying the different facets of this program, for verifying that people are indeed seeking jobs and not turning jobs down haphazardly, the verification for the child support elements? Aren't you getting into a whole new bureaucracy or department here?

SENIOR ADMINISTRATION OFFICIAL: This program puts new challenges to local welfare agencies which are already in the business of making sure that people are eligible for the benefits that they receive. What we want to do, though, is change the culture of the welfare office from one which simply focuses on filling out forms and making sure you have documentation to one which helps you get into work.

Q: Well, isn't that going to put a heck of a burden on the local welfare offices?

SENIOR ADMINISTRATION OFFICIAL: It's going to be a real challenge. And that's one of the reasons that we think a responsible phase-in of this program is so important, because local welfare offices are going to have a big job to do in getting ready to do this new program.

SENIOR ADMINISTRATION OFFICIAL: One other point is we are investing heavily in some new technology so that we'll be able to trace people as they move across states and make sure they pay their child support, so we'll be able to link quickly information about who's on welfare with information about who's taken jobs and what other benefits they're getting. So we're investing the technology that will make a lot of this more easy.

Q: What assumptions have you made in order to produce your figures about what's going to happen in the year 2000? For example, how do you know in the year 2000 that so many will have found work and so many people will be in governmentsubsidized jobs, et cetera?

SENIOR ADMINISTRATION OFFICIAL: The question, for those of you here and back in Washington who couldn't hear it -- what assumptions have we made about impacts by the year 2000. Fortunately, there have been a variety of states that have been experimenting so far with a variety of work-welfare demonstrations. We have very reliable information about the impact of those programs, and what we've tried to do is be very conservative in terms of determining what the impact has been of past programs and use that in extrapolating what will happen in the future.

We also have very detailed information about how long people stay on welfare, how many move off quickly. Seventy percent, for example, move off within the first two years. Some of them come back. So we've used that information about the current case load, about current programs, to project, again, as carefully and conservatively as we can about what will happen in the year 2000.

Q: But you must have used some economic assumptions, too?

SENIOR ADMINISTRATION OFFICIAL: We basically have stayed with the current set of economic assumptions. We're assuming it, we're acknowledging the case load will continue to grow, other kinds of things. I think when CBO scores this, you'll discover that we've been fairly conservative.

Q: Is there a point when that curve goes down?

SENIOR ADMINISTRATION OFFICIAL: I think that for purposes of our impacts numbers, we have, as my colleague said, used very conservative estimates and not tried to posit the kind of behavioral changes that we cannot demonstrate to CBO. So that we think that the reforms in our plan will actually have greater impact than what we've told you here today. But this is the most that we can take credit for under the scoring rules.

Q: Let me repeat the question. Is there a point at which the curve will go down? Have you said that, or have you predicted that, or are you not predicting there will ever be any drop in --

SENIOR ADMINISTRATION OFFICIAL: Well, I think that depends on our success in addressing the factors that are making the caseload go up, including reducing the number of births outside marriage, which is the number-one factor that's driving the increase in the caseload.

Q: I'm asking you to go beyond what the conditions are that would affect that, and tell me what your predicted outcome is. I think this lady's indicating -- she's nodding. Do you have an answer? You were nodding.

SENIOR ADMINISTRATION OFFICIAL: You have the numbers, don't you?

SENIOR ADMINISTRATION OFFICIAL: Again, we'll have to -- I'll have to look at the numbers. We have not -- we don't have a specific turning point or something like that.

Q: that should do anything but level it off?

SENIOR ADMINISTRATION OFFICIAL: That's what we're looking for.


Q: You're proposing to spend $1.2 billion over the five years on jobs. What happens if it turns out to be harder for people to get nonsubsidized jobs than you expect? Do you spend more? Do people not work? What happens with that?

SENIOR ADMINISTRATION OFFICIAL: The amount of money available for the jobs and work program will go up if unemployment is unexpectedly high either at the national level or in local labor markets.

SENIOR ADMINISTRATION OFFICIAL: But, so you understand, it's a capped entitlement. The amount of money available for the work program will be set at cap levels similar to the current jobs program, which we think will be plenty to meet the need.

Q: I don't think I followed that entirely.

Q: What if it's not plenty? What if people cannot find jobs, and you're up to the cap on your subsidy for jobs? Do they continue to receive cash benefits, or do you raise the amount you're spending on subsidized jobs?

SENIOR ADMINISTRATION OFFICIAL: We've tried to be very conservative. We really do think the money will be there. But the protection is clearly this: If you have played by the rules, if you've done everything we've asked of you, our expectation is that you can still support your family.

Q: Can you answer our question, because we don't know what that means?

SENIOR ADMINISTRATION OFFICIAL: That means is, if you come to the end of the line and there isn't a job there for you, you can continue to receive benefits. But the key is, we're going to focus those work slots on the people as they hit the time limit. So we believe those work slots will be there.

Q: Can I ask one other financing question? You have $1.5 billion that you project you're going to save from cutting rolls and reducing fraud. People have been trying to get fraud out of the welfare program for a number of years. What's the basis for that assumption?

SENIOR ADMINISTRATION OFFICIAL: The basis for our estimates on fraud, which are actually a small portion of that -- most of it comes from reduced caseloads -- have to do with the investments in automation that we are making. And again, we have experience from many states which have done computer matching, computer matching across state lines and so on. We have made very, very conservative estimates on this side, as well as on the caseload side.

Q: Why do you think caseloads are going to go down?

SENIOR ADMINISTRATION OFFICIAL: Because, again, we have evidence from existing work-welfare programs that when you invest in people, when you give them an alternative, they actually go to work. And in addition, if we also do things like health reform, we've done the earned income tax credit -- you've seen the people upstairs -- there's just clear evidence that people want to leave welfare for work. And I think if we give them the opportunity, that will happen.

Q: The presumption is that probably we're not going to have a bill passed this year. I think it's shared by certainly some folks in the administration and a lot of people in Congress. If that's the case, what are you planning for next year? And might you get a more richly funded program actually put in the budget for the coming second chance?

SENIOR ADMINISTRATION OFFICIAL: I think, as the President said, we believe that this issue could catch fire. There's strong bipartisan support for this concept. The kind of things that are left to argue about are relatively small -- the Mainstream Forum bill, which is the moderate Democratic bill; the House Republican bill, our bill are all substantially similar. We've got some differences over the financing. But the truth is that this -- this could catch fire, and if that happens that will be great.

Q: And if it doesn't, will you come back with --

SENIOR ADMINISTRATION OFFICIAL: And if it doesn't, we will come back and come forward with a bill next year as well.

Q: Are we going to see him increasingly talk about this teen pregnancy issue? Is this the start of some kind of a --

SENIOR ADMINISTRATION OFFICIAL: Yes, I think this issue is something that he feels very strongly about. It's not the first time he's talked about it. One of the most moving speeches he's given in the administration was when he went to Kramer High School in Washington. And it really is driving a lot of the other problems that we find ourselves having to deal with. And I think, again, it's an issue that hasn't gotten a lot of attention over the last 30 years. And it's something on which the two parties don't have to disagree.

THE PRESS: Thank you.

END 2:16 P.M. CDT

William J. Clinton, Background Briefing by Senior Administration Officials Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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