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Office of the Press Secretary

For Immediate Release January 28, 1995
                           PRESS CONFERENCE

Old Executive Office Building

1:34 P.M. EST

MR. PANETTA: If I could have your attention, please. What we'd like to do is obviously have comments from the participants in this welfare working session that was just completed. We began approximately about 8:30 a.m. and concluded approximately around 1:00 p.m. There were no breaks. It was a continuous discussion that lasted throughout that period, covering four key areas: the issue of work and moving people from welfare to work; secondly, the issue of parental responsibility and child support; thirdly, the issue of teenage pregnancies and, lastly, the issue of state flexibility. It was, I think, in everybody's view --and certainly the President's view -- a very constructive session.

What I will do is introduce the Vice President and some set speakers, and then we will allow others to be able to make brief comments. I would just urge everyone to keep their comments as brief as possible so that we can then have some questions at the end.

Let me introduce the Vice President of the United States.

Mr. Vice President?

THE VICE PRESIDENT: Thank you very much, Leon. I'll be very brief in my comments. As you can see, it was a well-attended session, and I want to echo what Leon Panetta has just said about the quality of the exchange that took place. It was a terrific discussion. We identified wide areas of agreement. We identified some areas where agreement is still eluding us, but we all recognize the work that needs to be done, and we agreed unanimously on a bipartisan basis to work together in the best interests of the country.

Everyone at today's meeting agreed on both the need for more state responsibility and the need for clearer national standards. We've got to require work, for example, and reward responsible behavior. We will continue the discussions that we've had with the Governors who were here and others, members of the House, members of the Senate, Mayors, county officials and others.

We believe we have a common concern: that we maintain what is an excellent partnership and to be certain that we don't put states at financial risk.

We believe that it is absolutely essential that the dialogue which began today at this working session continue in order to promote an honest bipartisan effort to fix this country's broken welfare system.

Senator Moynihan made the point privately that I think everyone here probably agreed with: that, regardless of your party, regardless of what part of the government you're in or whether you're in the government at all, the more time you spend honestly wrestling with these difficult problems, the humbler you become in recognizing that in order to fix it, we have all got to work together on a bipartisan basis.

I'm going to turn it back over to Mr. Panetta.

MR. PANETTA: The next speaker will be the Chairman of the National Governors Association, Governor Dean from Vermont.

GOVERNOR DEAN: Thank you, Leon. I just first of all want to say this is an extraordinary session. I thank the President, and I thank the leadership in Congress for making it so. Not only was it civil, which is always nice, but it was also very frank and, frankly, I think there are an awful lot of areas we agree on, many more so than we disagree on.

The Vice President spoke about flexibility for the state, and there's wide area of agreement on -- one of the areas that's the most difficult for us to try to resolve is the area of national interests -- to what extent should welfare remain, if at all, a national program. There were a lot of different views expressed on that. I think there's a strong consensus that children somehow need to be protected, but that we've got to change some of the present patterns of how we give out welfare benefits around the country, which apparently do things like increase teenage pregnancy, like encourage single-parent families. Those are things we all agree that we need to stop, and I think there's a remarkable amount of consensus on how to do that.

Chairman Shaw, I want to thank, for his presence and explanation of some of the things that they're working on. I think there is definitely room, based on the discussions that I've heard today for consensus among the governors, which I hope we'll achieve this weekend, and for a consensus in Congress, if we continue to work together in the bipartisan spirit that we worked together this morning for four or five hours.

MR. PANETTA: Governor Thompson, from Wisconsin.

GOVERNOR THOMPSON: Thank you, Leon. It's a pleasure for me to be here and to also echo what most people have said, that this was a very constructive, positive meeting on welfare reform. And when you've been involved in welfare reform as long as I've been, any changes, any improvements are badly needed. The system is broken. The system is badly broken. And one of the nice things that came out of the meeting today is, I think that everybody agreed that waivers, the need for governors to come on bended knee to Washington, to get a waiver to try something new, is something that should be eliminated, and allow governors at the state level, with local commissioners and county board people to have the flexibility to develop a program that's good for children, good for recipients, and good for the taxpayers of this country.

The other great thing that I think was accomplished was that we decided that we needed some national standards as far as child support. And we have to really get serious about child support. When one out of five children in this country are born into poverty, and one of the reasons for the poverty is the failure to collect $34 billion in nonsupport, that's a -- I think a national shame that we haven't been able to do more, and we're going to work very hard on that.

With regards to the rest of the program, I think that the fact that Clay Shaw is moving ahead, is a very positive thing. I encourage him, as I believe everybody does -- they're going to mark up the bill I believe relatively quickly. That is a giant step forward. We want to work with them.

It's up to the governors over this weekend -- Howard has alluded to it, but it's up to us now, Republican and Democratic governors, to see if we can get our act together over the weekend, and that's going to be a little bit more difficult because we need three-fourths of all the governors to agree on a policy. And any time you get three-fourths of the governors to agree upon anything, it's quite an undertaking and a tremendous accomplishment. And so I don't know if that's going to be possible, but we're going to work at it together and hopefully we can achieve that. And if that happens, I think things have really been a successful weekend.

MR. PANETTA: Let me have Dick Gephardt, Minority Leader in the House of Representatives, next.

REPRESENTATIVE GEPHARDT: Thank you, Leon. First, this is a more civil meeting than some we've been having in the House of Representatives lately -- (laughter) -- so maybe we all learned something today.

I want to express again the view that the President should be congratulated for calling this kind of a diverse meeting together, and I believe if we can show that we can work together on the solution to this issue, it might be a model in some sense of what we can do on other issues together.

I want to say the two issues that I think that we're all struggling with, and will continue to struggle with, is how, if more flexibility is given to the states, and there was a lot of expression about that; how we determine how much money states get year after year. A second issue is what are these standards that we would ask states to adhere to. And third, we started to talk about ways that we might encourage states to be able to reach the standards, or to reach more of the standards than they have in the past. The idea would be reward for results, something that I think may have some real efficacy to it as we talk about these issues.

But in conclusion, I think this was a very positive session. I think we can come out of it with this vast array of talent that's behind me with the ability to effect change in this area that I think the American people so desperately want.

MR. PANETTA: Congressman Clay Shaw, who's Chairman on the Republican side of the key subcommittee dealing with welfare.

REPRESENTATIVE SHAW: Thank you, Leon. It was, I think, a most rewarding session. It was very good to get these different people together to get the full exchange of ideas. And I think the President was probably surprised to find that there was as much agreement in the room as there was.

We on the Republican side made an agreement with the people that seemed to be almost unattainable in doing all these things within 100 days. There were times on November 9th that I wondered what in the world -- what we had brought upon ourselves. But I think that the deadline that we have placed upon ourselves has given us the sense of emergency that this issue has. And it is a sense of emergency. The system is totally out of whack; it's doing more harm than good right now, and it desperately needs to be changed.

We spoke a great deal on what brings us together, and what we agree upon. And I think that the differences that remain are few and far between. It was great to have in the room people from -- the mayors from where I come from, and have great deal of sympathy for, and bringing in the county commissioners as well, and then the governors. And the governors are going to have an awful lot to say about what we do. They are light-years ahead of the federal government. Tommy Thompson, John Engler, our former colleague Carper of Delaware, Governor Dean, who's done a great job in Vermont, these are just a few of the governors.

We have been meeting with the governors now for some time and will continue to do that through next week. The President indicated that he and the -- wanted himself, his people and the governors to cooperate with us in the Ways and Means Committee, recognizing that we are on a fast track and that we are -- be going to mark up in very short order.

MR. PANETTA: Senator Bob Packwood, Chairman of the Senate Finance Committee that has a lot of jurisdiction in this area.

SENATOR PACKWOOD: Governor Dean called it an extraordinary meeting; I think I would call it fascinating. Was there consensus? There was surface consensus. And as you watched the different parties, it was light watching great fencers parry and thrust; I didn't here a touche' today. But watching them go back and forth, you could see the differences in philosophy that were gently glossed over today. (Laughter.)

A couple of agreements? (Laughter.) Sure. Does welfare need reform? I don't think there's a dissent. Do we need to get people back to work? Not a dissent. Interestingly, when I served in the legislature 30 years ago, those same two questions we were asking then. When I served on the Finance Committee with Russell Long, we asked them; when Pat Moynihan did his wonderful 1988 welfare reform, we were asking the same questions. And later on, ask Pat for his wonderful illumination and humor today in the meeting; it was extraordinary.

But when it comes down to the one issue we didn't used to discuss 30 years ago, you can see the difference: flexibility. Are we going to set in Washington standards that are going to be goals to be striven for, or are they going to be requirements that must be met? And I think that is probably the fundamental philosophical difference.

And as we go through the debate -- and it's going to be relatively quick and relatively short -- as we go through this debate, the real issue is going to be, can we govern this country better from Washington, D.C., or from home?

MR. PANETTA: Senator Pat Moynihan, who is the ranking member on the Senate Finance Committee.

SENATOR MOYNIHAN: I just wanted to say to Governor Thompson that if you can get three-quarters of the governors to agree on something, that means you can amend the Constitution, which is terrifying. (Laughter.)

MR. PANETTA: Governor Carnahan.

GOVERNOR CARNAHAN: Thank you, Mr. Panetta. Yes, we did agree that the system was broken and that we thought we could do better and we do think we can do better. And we spent more time than you might think today on the topic of moving from welfare to work. And while Senator Packwood said that has been talked about for years, that has not been the focus of the current debate. And I think it's proper that we bring it back and put it front and center, because, as Senator Breaux said, the best social policy is a job.

And so, many of us have already embarked on some reforms. We have in Missouri; we've enacted reforms last year and gotten the waivers that Governor Thompson says we ought not to have to come and get; and I agree with him.

But we have put work as center, both to prepare people for a job, to get them the job -- there's often not that element in reform -- and to help them maintain it; stay with them, and prop them up and help them to get a better job. And so we're doing it with self-sufficiency pacts. We think that's the way to do it. We'd like the freedom, the flexibility, if you will, to continue that, and we don't think, though, that the various elements, whether it be the teenage mother staying at home and establishing paternity and all those things -- we addressed those in our pacts as well -- but we believe those ought to be up to us and ought not to be a new form of mandate coming down from the federal government. Thank you.

MR. PANETTA: Governor Carlson.

GOVERNOR CARLSON: You certainly blurred that word, "Minnesota."

MR. PANETTA: Minn-e-sota. (Laughter.)

GOVERNOR CARLSON: Very good. Very good. No, I get the impression that welfare reform has become sort of a political issue in Washington, and I hope you don't think that welfare reform is starting sometime tomorrow morning. The reality is, a lot of states and a lot of communities have been reforming the welfare system for a good number of years. The real issue is, why do we have to come to Washington to get permission to serve the people better and more effectively than is currently the case?

I think we agree broadly that the current system is a catastrophe. I don't think there is an enormous amount of agreement on what we mean by "flexibility." Those efforts that we've tried in Minnesota that work the best -- and I've noticed the same thing in other states, ranging from California all the way to New Jersey --are those that are collaborative, those that compel counties, school districts, cities and states to work together and to focus on what's good for the family, what's good for the child, et cetera.

And in each and every one of those collaboratives, the one thing that becomes abundantly clear that the barrier to the success is government itself. And I think there is a general reluctance for government to pull back and let success into the welfare system.

I think the key debate that we're going to have through the NGA and through the federal system is, what is defined as the word "flexibility"?

What we as governors have in mind may not be necessarily in sync with what Congress has in mind. Part of the debate this morning centered on a fear that if we were to transfer this power to the states, what happens if a given state fails? Well, the reality is, what do you think we have today? Tremendous failure caused by the micromanagement of Washington for some 50 years and its refusal to scrape the rust of the existing system.

But I think there has to be a relationship of trust. You can't have a broad-based partnership if all component parts are not treated with equal respect.

In Minnesota, we're launching block grants to local governments, because the truth is, they're the ones that are in the trenches more than anybody. They're the ones who really need the flexibility to deal with the problem. So, just as we want to redefine our relationship with Washington, we in Minnesota would like to redefine our relationship with local governments, and then let each assume responsibility for the outcomes, and hopefully to be honest enough to say "this works," or "this doesn't," and if it doesn't, to make the alterations necessary so it, in fact, does work. I think if we could redefine that partnership, I think this meeting will have been an extraordinary success.

MR. PANETTA: Governor Engler?

GOVERNOR ENGLER: Thank you very much. I certainly was grateful for the President convening this meeting. I think when you look at the attendance from the House and from the Senate, from the state and local government, we had a lot of the players at the table. I thought the content of the meeting was right on point, and Senator Packwood summed it up -- there was a general consensus on what the problem is, and significant progress in terms of defining what I think the alternatives are -- what I wanted to point out, and I brought a little graphic along to show it, is exactly how critical this is from a state perspective, why we think there is an opportunity.

And the one thing that was put on the table, Senator Breaux did a nice job of talking about the impact of the balanced budget amendment, because governors don't believe that the status quo is an option, that the status quo exists anymore, it's being changed. And the fiscal realities are driving part of that change, and certainly the failure of the existing welfare system and the impact on families, on human lives in communities across our nation are another important factor.

What I brought along today, just to show, was, what are we talking about when we seek flexibility? I think this kind of shows it. That represents some 214 different programs that we have administrative responsibility for. It nearly is 300, the toll, if we put them all on there. We're suggesting that this be replaced with about eight block grants. And I thought that the discussion today made us a lot of progress toward that important goal.

And at the end of the meeting, Congressman Clay was sort given the ball by the President, and we're excited to be working with the members of Congress on both sides of the aisle as we pursue reforms that I think will make a difference in saving lives in America. Thank you.

MR. PANETTA: (Laughter.) Could I ask Assemblyman Bryant from New Jersey, who is one of the state representatives at the meeting, to speak?

ASSEMBLYMAN BRYANT: Thank you, Mr. Panetta. I want to really congratulate the President for allowing not only local officials, but state officials, and since I was the author of the welfare reform in New Jersey, I felt particularly pleased I got out of the meeting may be somewhat different than others got out of it.

I thought first we'd talk about families that we're trying to help in putting families first. I thought there was some consensus or agreement on that. I think we also talked, I think, about what kind of things that can help people grow out of poverty, and that self-sufficiency ought to be the test, not just if a person got off of welfare, but they can be self-sufficient in their families.

I'm somewhat, as I'm hearing this dialogue now, is, I'm hoping it does not get down to power for the powerless. I hope we're not worried about -- we do need flexibility. It's an absolute bankrupt system, it is not in Chapter 11 where you can reorganize it. It is absolutely in Chapter 7. But we don't need to get in a big discussion about that there ought to be some general rules that all of us are going to agree to on the national and state level, and not a power play that everything must move to one level or the other, but in terms of what's going to make families -- and I think that's what the President stressed, and I think he thought that it could be bipartisan participation.

And from all of the governors and all the legislators, I thought that that's what I found that they were listening. I'm hoping they listen; I'm hoping they did not shut, or had closed ears to this. And I hope that when they go back on Congress on Capitol Hill that they will listen further so that they can absolutely do the kind of thing to turn this thing around. Thank you.

MR. PANETTA: Governor Carper from Delaware.

GOVERNOR CARPER: Thank you, Leon. With Governor John Engler of Michigan, I am the co-lead Governor of the NGA on Welfare Reform. Before I became Governor of Delaware, I was a congressman for 10 years. And I, during those 10 years, experienced plenty of disunity, disharmony and disagreement. And what I witnessed today in the session we've all been participating in was not disunity, was not disharmony, was not disagreement. There's far more that unites us with respect to changing our welfare system than divides us.

I believe the litmus test for welfare reform that we adopt in this country should answer three questions: Does it prepare a person for work, a welfare recipient for work, does it help that person find a job, does it enable that person to continue working to improve the quality of life for their family.

I think there are perhaps five or six broad principles that we do agree on. Among those are: work should pay more than welfare, a family that goes to work ought to be better off, not worse off because someone's working in that family. Two, there should be time limits to the amount of time that one spends on welfare. Three, we need to establish a contract of mutual responsibility.

It should be a two-way street -- their expectations of the state to help people, their expectations of those being helped to help themselves. Four, both parents have responsibility to improve the lot of their children. Five, our policies should encourage the formation and the sustenance of two-parent families, not one-parent families. And, six, the states do want flexibility, but in return for that flexibility, we believe that there should be benchmarks of standards to which we're expected to perform.

My focus in today's session was on the issue of teenage parenting, and I just want to mention a couple points on that. We need a national campaign against teenage pregnancy. I have encouraged the President to lead that campaign. I would hope that each governor would use the bully pulpit within their own state, as I'm doing in Delaware now, to mount that campaign and to sustain that campaign.

The media which many of us watch on television, in the movies, presents to us some 2,000 images during the course of a year for a child who is watching TV -- of sexual encounters which, in many cases, do not provide the other side of the story. There's no page 2, there's no consequences of whatever might be seen.

And what we need from the networks, what we need from those cable stations, what we need from the studios, the people that are creating the movies, the people that are creating the television series that present without consequence, we also need them to help us to develop a counterveiling measure, a counterveiling message, which is, there are consequences; they share those. There are consequences with respect to health with respect to how one lives in poverty, there are consequences with respect to the lives of those children.

And for us to ask the studios to help us develop those messages, for the network TV stations to help us put them on TV and on radio, and for the cable stations to help spread those counterveiling messages to young people. Those are some of the things that we need to do, and it won't happen, I think, without a national campaign with strong state support. Thank you.

MR. PANETTA: Let me have Yvonne Brathwaite Burke, who is Chair of the L.A. Board of Supervisors, again representing the local levels.

MS. BURKE: Thank you very much. We appreciate very much that we had an opportunity to participate with the governors, and we appreciate the fact that the President spent all of this time, and the Vice President, to stay here on this vital issue. Los Angeles County has 1,800,000 welfare recipients. So, obviously, we are very concerned that there be reform. We're concerned that there be work programs and that there not be a permanent welfare career for people.

But we also are very concerned that, as legislation moves through both Houses of Congress, that it does not shift the burden to the local government. Counties cannot be the ones who bear the entire load. And while we appreciate flexibility -- and we support flexibility -- but in developing flexible standards, we hope that every state is required to take its part of the load, and that we have some method of a safety net for those who fall between the cracks in these programs.

Because what really matters are those nine million children; we want to make sure that they are cared for, because they're the innocent parties. And we look forward to reform; we'll be working with everyone here, and we hope that we can look forward to a positive approach in working together.

MR. PANETTA: Mayor Lashutka from Columbus, Ohio.

MAYOR LASHUTKA: Lashutka is fine. (Laughter.) In some quarters; it is an ecumenical name.

Mr. Panetta, let me thank you and certainly the President, for convening this group. We are here on the eve of a great success -- unfunded mandates. And that will soon come up, but that's not exactly why we're here, we're here to bring a bipartisan group, because the fiscal issues that will be discussed after that are profound and deep. And the issue of welfare reform is important to all of us.

Let me raise two points specifically: one, the issue of flexibility that seemed to be accepted universally, although the root to its solution, not totally clear by all groups, is certainly a hallmark of what Congressman Shaw and his committee will seek to get from the administration and Congress, as well as those of us at the governors level, the county commissioners level, the general assembly levels, and as Joe Serna, the Mayor of Sacramento, who is also here -- those of us at the mayors' level. And that is important for us all to be a partner in this new national policy, because it must include those levels plus the not-for-profits in corporate America.

Secondly, the clear issue that the goal for all of us is to have a productive America where everybody is contributing to our greater prosperity, and that our economy provides for people who are currently on welfare, moving into the productive areas. And this healthy discussion will be a strong part in having that success come about in very short order. Thank you.

MR. PANETTA: We've gone through the designated speakers; now, I'll call on others just to speak as briefly as they can. Senator Kassebaum, who is Chairman of the Labor and Human Resources Committee that also has jurisdiction in this issue.

SENATOR KASSEBAUM: Let me just briefly say I think it was a very informative and constructive meeting. And the only suggestion I would like to make is one that I think could be very useful. And it would be for Mayor Barry and the administration to work together to make DC an example and put all the focus that can tie the elements together -- education, the judicial system, the social service system -- and intensively work on it to make it an example.

I think it could be very useful for all of us. Thank you.

MR. PANETTA: We have Senator John Breaux next.

SENATOR BREAUX: I think the real news today is that for five hours, Democrats and Republicans on a national, local and a state level were able to meet together in Washington in a closed room and emerge after five hours still standing, smiling and relatively unharmed.

I congratulate President Clinton for bringing us together instead of letting us act in a divided manner. He has called for a bipartisan spirit of cooperation on solving what is one of the most difficult problems that all of us will ever face as elected officials.

I congratulate our Republican colleagues for their willingness to participate and to join in this effort. Many of us believe, as has been said, that the best social program that we could ever write is a good job. And many of us in the Senate are going to suggest the concept of privatizing the job placement efforts to get people off of welfare into the private sector with a real job.

Thank you.

MR. PANETTA: Senator Hank Brown from Colorado.

REPRESENTATIVE BROWN: Thank you. I think what took place this morning is enormously important for the passage of welfare. It is an indication of a willingness of the parties to work together. Having been involved in the '88 compromise on welfare reform, I've taken an active role on it in the Senate. And two years ago, I wrote the President and asked him to convene a bipartisan effort to develop a common approach to the welfare reform problems. A year ago, I repeated the request with him.

And I think the convening of this conference is a sign that both sides are serious and intend to move ahead on a bill. So I think this brightens considerably our ability to get a bill. And I think Chairman Clay Shaw's willingness to move ahead with hearings and mark-up, as he will I think two weeks from now, is a sign that this issue is on the front burner and is going to pass.

There is some very deep, significant differences in the approach to welfare reform. I believe as it came out today, there is an enormous difference in people's view as to how much discretion the states should have versus the federal government. That's going to be fought out in committee; I don't know if it's resolvable, but I think you're going to see that be the central focus of the battle: How much will states have in the way of discretion, and how much will the federal government insist on controlling.

The second area is the fight over removing the barriers to work. The present law makes it illegal to refer welfare recipients to exist -- to openings in public jobs. And the battle over removing the barriers to work I think will be the second most significant battle that we face. Repealing that prohibition will be part of it; changing the training and education provisions so that job placement comes first and ahead of them; and lastly, privatizing the functions of job placement and training I think will be the third major area of battle.

But all in all, I think today brightens the prospects that we'll have a bill.

MR. PANETTA: Guess who? (Laughter.)

SENATOR MIKULSKI: Donna? (Laughter.)

I won't repeat what others have said, but first of all, I was remarkably surprised at, number one, the tone of the meeting. The entire morning was characterized by a tone of civility, collegiality, and cooperation. The agree-upon national goals of moving welfare recipients to work, and helping them not only get a job, but keep a job; the agreed upon goal of removing the disincentives to work, and to change the very nature of the way job training and welfare itself is administered.

Right now, we advocated the administrative simplification of welfare and also changing the nature of welfare workers from an eligibility worker to an empowerment worker; to make sure that that worker job's focus will be in moving people off of welfare and helping them during those early months when they have a job.

The other point is the issue of teenage pregnancy. Governor Carper talked about the bully pulpit to deal with the issues nationally of teenage pregnancy. But we talked about the role of men in this issue. We talked about that in order to end teenage pregnancy we must focus on not only the women, but also on the men; that we need to involve the men, first of all, to ensure that pregnancy is established at the time of the birth of a child; that number two, where that child is going to be dependent on public support, that both the mother and father of school-age parents must attend school; child support must be required; and that if men do not have jobs, that they have a zero account and should work in public service activities to essentially work off their benefit. I believe that those are very important breakthroughs.

And last, but not at all least, to remove that in order to qualify for help, to give help to those who practice self-help, that we remove the impediments to marriage. Right now, the way the welfare system is set up, is you are guaranteed a check if you promise never to marry and never to work. That was the focus on the incentives that we wish to remove in our whole process. And I thought it was a very successful morning.

MR. PANETTA: Representative Jan Meyers.

REPRESENTATIVE MEYERS: I think there was a great deal of agreement today. I believe that there should be a great deal of flexibility on the part of the states. They should be able to design their own work programs, their own day care programs. What works in New Jersey may not necessarily work in the state of Kansas. And so I support strongly flexibility. I do think, as an individual, there should be two federal mandates: one, that there should be no AFDC unless both parents are 18; I would not take away food stamps; would not take away Medicaid; but I don't think we should give monthly cash grants to young people under 18, unless both parents are 18 -- no AFDC; and no AFDC at any age unless the father is absolutely identified.

I think we have to call on men to take some responsibility, too. I'm not saying that there was universal agreement with this thinking in the room today, but there was substantial agreement. And I think those two mandates are reflected in the House bill at this time.

MR. PANETTA: Thank you.

REPRESENTATIVE CAMP: Dave Camp from Michigan. There are a couple of things that were clear in that meeting, and one is that the -- no one defended the present system, so the status quo is not an option. And it was also clear that the bill that really is where the action is, is the House Republican bill under Chairman Shaw's leadership. So if you want to be where the action is, watch where that bill goes, because it's on a fast track; it's been in the public domain for some time now. And where we can agree, I look forward to working with my colleagues on a number of issues. I won't repeat all of what's been said, but on time limited benefits, and other things. Thank you.

MR. PANETTA: Let me have Harold Ford wrap up, and when we get into questions, I'll have some of the others here speak to the questions.

REPRESENTATIVE FORD: Thank you. As we, I guess, completed the workshop in the summit this morning, I must say to Clay Shaw, hopefully we can continue that same type of dialogue as we move with Democrats and Republicans on the Human Resources Subcommittee.

It is our intent on the Democratic side to make sure that the discussion continues with the flexibility that the states are asking for. But at the same time, as we talked about this morning national standards, that we want to make sure that those federal standards are such that we will in fact address the issue of child poverty in this country, families and dependency. If we keep those issues in focus as we move to mark up a bill at the subcommittee level, I have great confidence that Democrats and Republicans alike will be able to forge a clear message as we try to link work with welfare in this country.

Q Representative Shaw, could we ask you a question about -- specifically, on this issue of flexibility, from your perspective, is that gap on flexibility, the philosophical gap, unbridgeable at this point?

REPRESENTATIVE SHAW: Oh, no, I think that the tone of the meeting -- I would welcome a counterposition on this -- but I think that the tone of the meeting was that we did want the flexibility, we did want to give the flexibility to the governors. We've been working on our bill very closely with the governors, and they've had a lot of input. So I think we've come a long, long way.

And it's important to remember on this that we're, on a federal level, we're catching up with the states. The states have been getting the waivers to do some of the things that we want to now put into law and go nationwide with.

Q But I'm talking -- the gap between the Republicans and the Democrats, it appears -- defining --

REPRESENTATIVE SHAW: I think that -- there's some --

Q Could you repeat the question, please?

REPRESENTATIVE SHAW: All right, the question is whether there's still a -- whether there's a gap between Democrats and Republicans on the question of state flexibility.

I did not see any great gulf of differences. We may be, as we get into the mark-up and get into the actual details, I'm sure we're going to fight over some of the details, but I felt that our Democrat colleagues in the meeting recognized the value of the states and that the present system could be drastically improved by bringing much of that down to the states.

Q Do you think you won the President over to your view and that stated by Congresswoman Meyers that it is a good idea not to allow AFDC for mothers who are 18 and younger? And do you think the White House came around to that or --

REPRESENTATIVE SHAW: That was discussed a lot --

Q -- question?

REPRESENTATIVE SHAW: Yes ma'am. (Laughter.) The question was, did the President come along to my idea or the Republican idea with regard to AFDC payment to young moms. There was a lot of support for that position in the room. I will not take it upon myself to speak for the President. I leave that for others.

Q Can Mr. Panetta answer that?

MR. PANETTA: Welcome to the White House. (Laughter.)

Q Can you answer that question?

MR. PANETTA: No, the President did not express agreement on that approach, but there was a good discussion about that and that's what we wanted.

On the flexibility issue, let me just say that I think everyone agree that we have to move towards greater flexibility with the states. I think the real questions that have to be worked through in terms of differences are: What are those benchmarks? What are the standards that should be established? What are the performance goals? Can we do it on the basis of incentives? Those were the kind of discussions that took place. So there was clearly consensus that we have to give greater flexibility to the state.

I think the area to be discussed is the area of how do we work through these benchmarks, these standards, these goals that need to be established as well.

Q With all of this flexibility, what are you going to do about a poor woman who moves from one state to another? Is she going to have to change her life altogether every times she moves? Lots of women -- lots of families move from one state to another.

MR. PANETTA: That -- let me let Donna Shalala speak to that.

SECRETARY SHALALA: The answer is that the benefit levels vary and the rules vary in terms of how the programs are handled now. There is some flexibility for the states. What we all agree upon is we have to go way beyond what we currently do and increase the flexibility, and the President is very committed to that.

Q Does the administration believe that AFDC should remain an entitlement or are you willing to consider changes that would eliminate its entitlement status?

MR. PANETTA: The administration is concerned that we provide a safety net out there and that we ensure it. And I think there is a consensus that there is a national interest, obviously, particularly in the welfare of children and that we need to provide some kind of safety net to protect those individuals. I think there was no clear debate on the issue of entitlement versus the issue of whether we go to block grant other than there was a great deal of debate about block granting funds.

GOVERNOR CARPER: Tom Carper of Delaware. Let me just say with respect to the flexibility, in the state of Delaware we've asked a waiver that's been submitted to the President and Secretary Shalala today for the opportunity to put a family cap in place. We've asked for the opportunity, beginning in 1999, not to pay each month AFDC welfare checks to teenage mothers.

John Engler of Michigan has said in public testimony with me two weeks ago before the Ways and Means Committee that Michigan, at least for now, is not interested in a family cap, and they're not interested in denying to teenagers under the age of 18 AFDC benefits.

I think what we as Democrats and Republicans alike can say on flexibility is, we don't like liberal mandates or prescriptions anymore than we like conservative mandates and prescriptions.

With respect to funding, what we have today is a lifetime entitlement. A person goes on welfare and they can stay there almost forever. And what we're proposing, and I think where we can agree -- Democrats and Republicans -- is we ought to get rid of lifetime entitlements, and at the very least, change those into timelimited entitlements.

In those areas, those programs for which there is broad consensus to block grant those -- federal job training is an excellent example. One hundred fifty four federal job training programs -- perhaps we can block grant those into one.

To the extent that we can agree on those, let's block grant those. In those areas where there's not broad consensus on block granting programs, why don't we let a couple of states -- maybe Michigan, maybe Wisconsin, maybe a couple of others -- have that full block grant experience. And the rest of us could learn from that experience, that the would provide --

SENATOR PACKWOOD: This is why the meeting was so fascinating today. You asked the question about teenage mothers -- are we going to write into the bill. This is not a goal, this is a requirement. Here it's funny -- Republicans like that, don't they? Don't words of national requirement -- you're going to put it in the bill. And then we say, yes, but we don't want other national requirements. And the President says, no, he's not in favor of writing that requirement into the bill. Then you come to this very perceptive question over here about AFDC as an entitlement versus just a grant.

Do we say to the states, you must do AFDC sort of as we think you ought to do it, or do we say to the states, here is X amount of dollars, which you must use sort of generically for what the public would call welfare. But if you want to use that for $300 in a cash grant and $200 for food, or no cash grant and $500 for medicine and food, that's up to you. And it's really an entitlement to the state. And the state decides whether or not certain individuals are entitled. This is where I say the differences are.

These have not been reconciled yet. And it is fascinating. They're going to be reconciled in the next five or six weeks, I think, in the House, and probably within two to three months in the Senate. Whether or not we reach a bill that the President can sign, I can't tell.

Q Mr. Shaw, could you -- the Governors now are trying to get agreement on this Chinese menu approach, or if you want an entitlement, you can get it with some restrictions, if you want a block grant with no --. First of all, is that the direction you're heading, to go for that? And could you accept that?

REPRESENTATIVE SHAW: Did you hear that? (Laughter.)

I personally feel that there should be uniformity as to the broad structure of all of the programs throughout the country. I think otherwise you will have form shopping and some other things. I mean, we have to look at it from the nationwide perspective, but we also have to look at it from the practical sense as to who should be running these programs and where should the decision-making be.

So we'll put the broad structure in place, and then we'll let the states fill it in, with a great deal of flexibility. But I think there has to be uniformity.

GOVERNOR ENGLER: Let me just jump in on that because I think that this is -- Bob Packwood just touched on it -- but the fundamental question comes down to, is there going to be an individual entitlement that remains or will this be a block grant state entitlement type program.

And I think the individual entitlement program has several problems with it. I think it doesn't work under the fiscal affairs of this government. We're trying to balance a budget. We've got a balanced budget amendment that's beginning to move now. And the individual entitlements also are invitation for the federal government to continue to micromanage states to set the policy, to define the rules and the regulations.

And we're going to be asked to save money. We're going to be asked to do a better job for people who have needs that are real needs and do it with less money, then we've got to have freedom and flexibility. And it's about that simple.

And so I think the argument that's going to prevail in this process -- and this is a debate that is going to go on -- but right now the debate is very clear and is in Congressman Shaw's subcommittee. Everyone who wants to be part of that debate has to be in front of him and his committee. And I think as we go forward, we're going to conclude that we ought to give the states the maximum amount of freedom and flexibility, and the trade-off is saving some money in the federal budget.

And I think a consequence -- and we ought to start with this almost -- is that we're going to do a better job for families that need the help, and by doing a better job, it means put them back to work faster with different and innovative approaches that will be different in Delaware than they are in Michigan or Vermont or wherever they are in the country.

The other point to leave on this is that I think you're going to see in the debate as it moves along, various, I guess, amendments offered to say we ought to mandate this or we ought to mandate that. And I think there ought to be some type of very, very strict scrutiny as to say, why do we need either a liberal or a conservative mandate in the bill. What about, instead, a set of benchmarks that say, states, you need to report back to other states and to the federal government how many people are on welfare, what your teenage pregnancy rate, how successful in identifying paternity, what amount child support collected, what amount or what significant amount of degree completion for high school degrees. I mean, those kinds of factors, those benchmarks -- and those become standards and you evaluate, then, your performance based on those standards.

And the states that don't do so well, that clearly becomes a political issue in those respective states. And I think that gives you a lot more accountability than a system that's been in place for 40 years that's failed families year after year after year.

Q Governor, it sounds as if there's more difference between the governors and Washington than there is between Republicans and Democrats in Washington.

GOVERNOR ENGLER: No, I think that there's a -- I have to tell you, that I said this before, I think there was a substantial amount of agreement on a lot of the ancillary issues. This is -- the big question -- you know, they say, what's the big question? Well it does -- ultimately, it comes down, we're going to decide this individual entitlement versus the state entitlement. I think I know how that's going to come out, and I think that we have made a lot of progress today in terms of acquainting everyone with what the full ramifications of that debate would be for Washington perspective or a local perspective.

And finally, the national interest is the same whether it's in Washington, in the state capitals or in the local town halls all across the country. It's putting people to work.

Q Mr. Panetta, everyone's talking about how everybody agrees on flexibility, but would the administration sign a bill along the lines that Chairman Shaw is talking about -- block grants to the state with some requirements that teenage mothers be cut off, noncitizens be cut off, paternity must be established, those sorts of things?

MR. PANETTA: Let me make very clear what took place today is that we had, as I said, a very good discussion in four areas. I think there was broad consensus about the need for strong standards with regards to parent responsibility and child support. And I think there was a consensus that we have to do something much stronger with regards to trying to prevent teenage pregnancies.

There is a consensus that we ought to certainly move towards work, although there are some differences as to how we are able to accomplish that, how far to extend it, what kind of support system you provide. And lastly, with regards to state flexibility, there's a consensus that we do indeed need to move toward state flexibility.

But there are differences. It's just obvious in the last few questions as to what benchmarks, what standards, what kind of requirements are applied. And there, there is a debate, and that is not agreed to at this point, but that's where we hope in these next few weeks we can try to find agreement.

MR. MCCURRY: Last question --

Q Senator Kassebaum had raised the possibility -- well, of using Washington as a laboratory for some of these welfare experiments. I'm just curious, did she raise this during the meeting, and what would be the administration's point of view of such an idea?

MR. PANETTA: That was not raised during the discussion, although it's obviously an interesting idea, and I think one that we would like to think about.

She did raise the issue of the swap, which is something she has proposed on the Senate side. And that was pretty actively discussed during the meeting. It was a good discussion on that issue.

SECRETARY SHALALA: Senator Kassebaum raised the issue of using Washington, DC, as a model with the Director of OMB, Alice Rivlin, and myself, privately, as opposed to in the -- in a full discussion. I think that what we both said to her was that we're happy to come over and talk to her, and we both -- all of us, including the -- in particular, the President, have had a long interest in what we could do in Washington, D.C.

MR. PANETTA: Let me, before we conclude, have her -- since the good Mayor has been here throughout it, if you would wrap it up for us, Mr. Mayor.

MAYOR SERNA: Thank you very much, Leon. I was very pleased to be at the meeting, obviously. And I was very, very glad to see the President fully engaged in this very, very difficult issue. We in local government are the ones that really have to deal with welfare reform and other issues. I know they're all going to work very hard to do their jobs so that those of us at the local level -- it's made it easier for our communities.

There was a lot of good discussion. I'm going to go back to Sacramento and make sure that, in terms of our county, and our city, and tell them that the President is hard at work, the Congress is hard at work, to build a bipartisan consensus, and we at the local government are very pleased to see it.

MR. PANETTA: Thank you.

THE PRESS: Thank you.

END2:24 P.M. EST