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                       Office of the Press Secretary
                           (St. Louis, Missouri)
For Immediate Release                                    August 12, 1997
                              PRESS BRIEFING BY
                                MIKE MCCURRY,
                            Windows On Washington
                             St. Louis, Missouri             

12:35 P.M. CDT

MR. MCCURRY: Good afternoon, ladies and gentlemen, and welcome to St. Louis, Missouri. This is our window to do a little brief, and so I wanted briefly to have Bruce Reed, Assistant to the President for Domestic Policy, and Eli Segal, who President of the Welfare To Work Partnership, talk to you a little bit about the both the President's announcement today with respect to the welfare caseload numbers, and then some of the impressive work that the Partnership has been doing to build private sector support.

Mr. Reed.

MR. REED: Thank you, Mike. Let me just say a word about why we're here in St. Louis. The new welfare law has shattered every record on the books in its rookie year. You should have the welfare caseload numbers -- let me go through them for you to put them in some perspective.

In the first three and a half years of the Clinton presidency, we were able to reduce the welfare rolls by about 1.9 million recipients. The welfare caseload was 14.1 million when we took over in January of 1993; it had dropped by 1.9 million when the President signed the bill in August. The new figures that we're releasing today cover the nine months from August of '96 when he signed the bill to May of '97, which is the latest figures available. And they show that in the first nine months of the new welfare law, the welfare caseloads have dropped another 1.45 million, and at its current rate, the caseload is on course to drop nearly 2 million in the first full year of the welfare law, which is as much as it dropped in the first three and a half years of the Clinton presidency.

These numbers are a stunning success, totally unprecedented in the history of welfare. Welfare caseloads have risen almost uninterrupted in the first 60 years of the program. Before President Clinton took office there had only been two years where the caseload had dropped by more than 250,000. And we are about to have our third straight year in which the caseload has dropped by more than a million. The total is 3.4 million for the first four years and four months of the Clinton presidency. That's a 24-percent drop, which again is a record.

And Eli and I can talk a little bit about why that is happening. Certainly some of the success is due to a booming economy and very low unemployment. But there's also something else going on, which is for the first time most states are taking welfare reform seriously and putting in place impressive programs to move people from welfare to work.

It's no accident that some of the states that have shown the most dramatic drops -- including Wisconsin, where the drop has been 54 percent; Indiana where the drop has been 45 percent; Tennessee, 47 percent; Massachusetts, 40 percent -- those are all states that received major waivers from the Clinton administration and that are real leaders in welfare-to-work efforts.

The two biggest states that are lagging behind the rest of the country -- New York, which is 45th in caseload drop, and California, which is 48th -- have only recently put in place statewide programs. In fact, Governor Wilson just signed California's program yesterday. And Governor Pataki is scheduled to sign his new law later this week. So if New York and California, which together represent about a third of welfare caseload, have been dropping at the same rate as the rest of the country, we would have seen an additional 750,000 people moved off of welfare in the last four years.

I think one other point worth making is that a year ago when the President signed the bill he promised to fix it in some important ways, and the new budget law that he just signed last week does that. He made good on his promise to undo the harsh cuts in immigrant benefits. The new budget restores $11.5 billion in health and disability benefits to legal immigrants who are in the country at the time the welfare law was signed. And it also expands work opportunities for people who are on food stamps, childless adults who won't get cut off because they'll now have an opportunity to go to work.

We were also able to enact a $3 billion welfare-to-work program that will give money to the hardest-hit communities, the inner city communities where the hardest-to-place welfare recipients tend to be concentrated. And we expect that that $3 billion, along with a welfare-to-work tax credit that was included in the new budget, will go a long way towards meeting the President's goal of moving another million people from welfare to work.


MR. SEGAL: Part of the reason that we've seen so much progress in the last year is because the private sector has stepped up to the plate since the legislation was signed. The private sector means a lot of things, but among other things it means the Welfare To Work Partnership, launched at the request of the President of the United States at his State of the Union address this last year. Actually, we began business in May, on May 20th, at the White House, with 100 partners in the Welfare To Work Partnership. Today we're over 800, and we expect to reach our first objective, 1,000, well before the President hoped we would, which was six months from the event in May.

The numbers are impressive, but I think as we go forward, we're going to even be able to produce more information, which is that not only are companies signing up, not only are they making the commitment to hire and retain, but they're actually achieving that objective and, in the process, changing their hiring practices.

Here in St. Louis today was our first regional challenge, the first time since we launched in May that we've actually kind of built around a city the idea of moving a city around the welfare to work initiative. There are 42,000 people on the welfare rolls -- 42,000 adults on the welfare rolls here in the greater St. Louis 12-county area right now. We hope and expect that our 300-plus companies who have signed up today will be actively engaged in hiring people over the course of the next year. We expect to come back and work closely with the people who, in fact, signed up today and make sure that as we go from the poetry to the prose of welfare to work we, in fact, get a lot done.

We're optimistic. We know there are those who continue to be skeptical about this, but we already can begin to report on success stories around the country, companies of different sizes and shapes who are, in fact, doing this not out of a sense of corporate citizenship, although we see some of that, as well, but because of its effect on the bottom line of companies. At the time of this extraordinarily robust economy. Companies really do see this as a new source of labor.

Our essential core message is that welfare to work is good for business, and we think we're going to be able to demonstrate that over and over again as we go forward. St. Louis was first. There will be many other cities in which we operate going forward. In the course of the next 10 days, as we lead up to the 22nd and the anniversary of the welfare reform legislation there will be many other things that the Welfare To Work Partnership is going to speak to. We're going to show small business support. We're going to show industry support. We're going to show support in other states.

So we're highly optimistic about -- there was some skittishness a year ago about some anxiety about this great gamble that the President was taking signing the legislation. I think we're going to be able to show that the business community is going to step up to the plate and really make a difference.

Q Do you have any actual breakdown of the number of people who really left welfare and are at work as opposed to other reasons why they're off the rolls?

MR. SEGAL: We know the following. The welfare system was designed as an income maintenance system, so there are no definitive statements of statistics kept at any level of government -- federal, state or city -- which tracks those moving from welfare to the private sector. On the other hand, we know that our own companies will be tracking -- we can't say anything to it right now; we're just getting off the ground. We wanted to establish our bona fides as a place to turn for information. I think over time, we as a bare minimum will certainly be doing it, and we see some states are beginning to look into tracking welfare to work. We know it's important to do it, and we're going to figure out a way to do it. But at this time we cannot give you specific information.

We know what commitments of industries are, commitments of specific companies are. I'm quite comfortable that when these companies and industries give commitments, they will live up to them. But I can't tell you right this minute on our companies, or I can't even tell you how many specifically, but we will soon.

Q You guys don't know -- you know how many people are dropping from the welfare rolls -- you don't have stats for how many have dropped or kept dropping?

MR. REED: No. That's one of the things that we'll be looking at. The welfare law calls for a work performance bonus which will reward states that are specially affected in moving people from welfare to work and keeping them in jobs. And we'll be tracking that.

I should say that for the national numbers, the vast majority of people who have moved from welfare to work over the last four years have likely done so on their own. The time limits have not taken effect in the overwhelming majority of the country. I think a few counties in Florida, and they may be coming into effect in a few counties in Wisconsin.

A number of states, both through their waivers and since the passage of the new law have put into place tougher work requirements and greater expectations that eventually recipients will need to move into work. And, in fact, many states are reporting that the very expectation of work has had a significant impact in reducing their caseloads.

Q So are you saying that the law -- the time limits in the law hasn't had an effect yet?

MR. REED: The time limits -- no one has reached the time limits in the new welfare law. There's a five-year lifetime limit in the welfare law, so nobody's going to reach that until at least 2001. Other states have put in place shorter periods by which recipients are required to work. And some people have been sanctioned for refusing to work. But that isn't the case with most of the people who are --

Q How has the law convinced people or pushed people off welfare?

MR. REED: I think that a number of states have found that expectations for everyone involved in the system have changed. Welfare case workers are telling recipients or prospective applicants when they walk in the door that welfare is no longer an income maintenance system, it's a work system and that they're going to be required to go to work. Some people decide not to apply as a result.

Many states have set up so-called grant diversion programs where they give people a lump sum for a short period of time to help them through a tough period, rather than putting them on the welfare caseload and writing them monthly checks. And I think there's been -- again, this will be the most studied social experiment in recent history, so we will know over time exactly where people are going and why. But I think we're also going to see a certain amount of smoke-out effect, some people who were working off the books who have now decided it's not worth the trouble.

MR. SEGAL: I have one little comment to that, anecdotal though it is at this point. In at least one city, Kansas City, we actually tracked the number of people who were learning about LINK, which is one of the finest job training and readiness systems in the United States. Before and after the signing of the welfare legislation there's a tremendous bump in the number of people calling for information, coming down and getting a training program. And we're trying to track some of that information as well. There are a couple of other examples like that, as well, that the law has stimulated at least interest, if not, yes, a change in behavior.

Q The information that you're hearing back from states, are you getting the idea that the flow of people from welfare into actual jobs is a trickle -- is it a few, is it thousands? Are they coming off welfare into training, or off welfare directly into jobs, or off welfare into nothing at all?

MR. REED: Well, the numbers that we've given you today are people who have left the welfare caseload altogether. Most of those people have probably gone to work or gotten married, so that their income no longer makes them eligible.

In a number of states, people are still on the caseload, but also working. Some states allow recipients to stay on the caseload longer and keep a greater portion of their check. As I said, we won't know all the facts on this for some time to come.

Q -- how much of the people have dropped off the rolls because they've gotten married?

MR. REED: We don't know. Historically, that's been -- work has been the number one reason and getting married has been the second.

But to Eli's point, the pace of people leaving -- the pace of caseload reduction doubled around the time of the signing of the welfare law and has continued. But it even was doubling in the months around the signing when nothing else had really changed -- the states hadn't implemented new programs. So there probably is a noticeable impact merely from having a national welfare debate followed by a series of 50 state welfare debates.

MR. SEGAL: It's the accumulation of data that we don't have at this point. At the Welfare To Work Partnership, when we launched in May, one company, United Airlines, committed that in the course of the next three years it was going to hire 2,000 people formerly on public assistance -- 400 the first year, 800 in each of the next two. They're already hired 247 people at this point, against their first year's objective of 400.

One of the problems that we're dealing where with data, is that not only has the law never historically asked companies, states, counties to hold the data, but there have been a whole host of privacy reasons and stigmatization reasons why companies have been reluctant and individuals have been reluctant to share information about where they were before they began working here -- working at their current position.

We believe we're going to be able to figure out some model to start sharing some information with you that will be helpful. It's just going to take a little while.

Q -- also I think a couple of weeks ago the President urged states to kind of save that savings to create jobs during economic downturn. Do you know if they're doing that and what the status of that is?

MR. REED: Well, the welfare law gives states a block grant that is based on peak caseloads back in 1994. So almost every state that's seen significant caseload reduction is receiving more money than it would have under the old law. On average, it's probably about 25 percent more money. In some states it's going to be a good bit more than that.

Most states seem to be reinvesting their savings for a couple of reasons. One is the that law actually requires them to maintain their prior efforts. And since their prior efforts were also based on a much higher caseload, they're required to spend more than they would otherwise be spending now. A number of states have also decided to plow a lot of money into child care. California's new law calls for $1.3 billion in child care a year. Illinois doubled the amount of money that it's spending on child care. So I think most of the states seem to be doing the right thing on this.

Q Could you talk a little bit more about California and why it's so far behind?

MR. REED: I got in trouble the last time I gave an explanation to this. I think there are a couple of possible reasons. One is that the economic recovery started later in California; there's been population growth. And it's quite possible that the fact that it has taken the state -- that the state has had a long, protracted debate on the subject of welfare reform has kept it from putting into place statewide efforts which will now happen as a result of the new law.

Q Can you tell us why Governor Childs and some of the other governors were wrong, that the portion of the budget did not -- dealing with federal job protections were former welfare recipients? They suggest that this would deal a severe blow to welfare. Why is that wrong?

MR. REED: Well, I think most governors have one legitimate concern, which is that they are worried that down the road the Internal Revenue Service will come to the conclusion that work-fare jobs are taxable income and that recipients would then be eligible for the earned income tax credit and employers -- in this case, the state -- would be required to pay FICA taxes and unemployment insurance. And for a number of states that would be a significant burden.

We've made clear to governors in both parties that we're prepared to make sure that that doesn't happen. In the budget law that just passed, Congress exempted work-fare participants from the earned income tax credit and we will deal with the FICA and unemployment insurance problem as well. I think there's less of a real concern -- I think the governors are wrong to be concerned about the application of basic employment protections which, after all, are standard in the private sector and involve basic civil rights protections -- the minimum wage, which has always been the tradition in work-fare programs.

So on the money issue I think they have a legitimate concern that we can deal with. On the employer protections, I don't think they're right.

Q -- requirements -- see a situation where a certain welfare programs are really -- by the fact that the locals say you have to pay a prevailing wage on this project --

MR. REED: I think it is highly unlikely that you would see a welfare recipient in a work-fare program where Davis-Bacon would apply.

MR. MCCURRY: Other subjects? Any other subjects? Yes.

Q This is sort of the same thing. Missouri and Illinois, how do they fit into some of this? And why was St. Louis picked for this stop?

MR. SEGAL: Came to Missouri for several reasons. First, we believe its strong economy would be a good place to make the argument for welfare to work that the companies were going to have a real need for entry-level work. We can make the case there. Second, it is a city with one of our five founders, a corporate champion; Monsanto has been extremely supportive of all the efforts we've undertaken. And third, it's a city in a state where the elected and the appointed officials have been very much engaged in welfare reform from even prior to the passage of legislation.

With all of that, we just kind of thought this would be a city we could wrap our hands around and tell the story and actually start going from the poetry to the prose, I think is the essential reason why we did it here.

Q -- five-year time limits, how many people are expected to be pushed off, how many jobs --

MR. REED: Well, there are -- of the 10.7 million still on welfare, I think that translates into about 3.9 million adults -- how many people need jobs by the year 2001 depends on what happens between now and then with continued caseload reduction. And I think that -- the welfare law calls for state to meet work participation requirements of 25 percent this year and it goes up 5 percent a year and reaching 50 percent by 2002. A number of states can get close to this year's rate just by their success in caseload reduction alone.

But there's no question that over the long haul this is going to continue to be a challenge. As more and more people move off welfare, the remaining cases get tougher. And that's why we think that it's especially important to engage the private sector, which is the long-term route out of this system.

Q This fundraiser right now, how much is it raising?

MR. MCCURRY: It's raising -- I believe the DNC said $250,000. I think it's predominantly soft money, but I don't have the split. A quarter million being raised at the fundraiser, and I believe it's predominantly soft.

Q How many people --

MR. MCCURRY: I don't know. We can try and get a count for you. There was a receiving line of 70 people that he was seeing. But I'll get the size.

Q Can we make sure that we're able to get a pool report from our pool before we get back to Andrews? The schedule doesn't make it clear that --

MR. MCCURRY: There should have been a pool report already that reported on Secretary Herman's briefing on the plane.

Q From the fundraiser.

MR. MCCURRY: Oh, from the fundraiser. Oh, okay. We're feeding the remarks as soon as they come. We're feeding the remarks the President makes here, but we'll remind the pool that you have a quick depart out of here.

Q -- per person amount?

MR. MCCURRY: I don't have the per person amount. See if anyone from the DNC can give us more data -- ticket price, number, and the total I had which was $250,000.

Q This is primarily for the '98 congressional race or to pay off old DNC debt?

MR. MCCURRY: Well, the DNC has indicated that in their fundraising program they will devote most of their proceeds to the 1998 campaign, and that is indeed what the President wants to see happen. The President had a good conversation with Congressman Gephardt on the way over here about some things they're going to do together with respect to House races in 1998. But this is a DNC event. We've also done, as you know, events for the House Campaign Committee as well.

Q These fundraisers they'll do together -- what will they do together for the House races?

MR. MCCURRY: They just talked about some things that they will try to do together over the course of the coming months and also some things they'll do with respect to candidate recruitment, some things the Minority Leader thought the President might be helpful on. That's one thing they talked about on the way over. We've been doing a series of things, working with the House caucus to find ways that we can find some common thematics and common approaches to the challenge we face in 1998.

Q Mike, is Gephardt speaking at the fundraiser or just the President?

MR. MCCURRY: I believe -- yes, I believe he is. The Governor and the Congressman are both speaking.

Q Mike, how much is tonight? How much is he raising at tonight's function?

MR. MCCURRY: I don't know. We can give that to you on the way home. The DNC reports that they've got about 60 to 70 guests here. They were asked to contribute $10,000 per couple and the DNC expects to raise $250,000.

Q The DNC expects what?

Q Have they put all that behind them, or what?

MR. MCCURRY: No, I think they -- they acknowledged they have some differences on some issues, but they also understand that they've got a big agenda that together they can pursue in which agreements are far more numerous than disagreements.

Q Mike, after the President was briefed by Alexis Herman on the flight, number one, what was his reaction to what she had to say? And number two, did he give her any guidance as to how to proceed?

MR. MCCURRY: The President thought Secretary Herman is exactly right, that they need to continue to press these parties to resolve their differences at the table. They talked a little bit about some of the things the Secretary had suggested to the parties yesterday, that she expects to hear back from the parties about later today.

The President thought that was the right mix of efforts to bring them together and try to close some differences that do exist. And the President instructed her to continue her efforts to encourage the parties to resolve their differences at the negotiating table.

Q -- the President was saying it was not his job to tell Americans around the country what party to vote for in their local congressional races. Next year is he going to be more forthright in calling for a Democratic Congress?

MR. MCCURRY: I think he's going to do exactly as he did in the '95-'96 cycle which is to work for candidates who embrace the kind of agenda that the President puts forward. And we find that, thankfully, a vast number of Democrats and Democratic candidates really believe that the President's agenda is a good one. It's one that they, in most cases, in their districts run on as well. And, so we will continue to make the case on behalf of candidates who can help continue the progress we've seen.

Q Mike, UPS announced this morning that every week the strike goes on that thousands of jobs will be permanently lost because of lost business. Have they made that point in discussions with the administration?

MR. MCCURRY: Both sides make points that try to underscore their perspective. We hear from the union, similarly, that their workers are feeling the cost of the strike as well and the reasons why they are out or for all the reasons that they've articulated at the table. In any negotiation, in any labor-management dispute both sides go out and state their claim to the best case they can make in public. And part of the effort that the administration is making is to see if we can't get them to minimize their differences publicly when they're speaking on behalf of those that they serve and try to privately resolve the differences that exist so that the company can go back into its line of business and the workers can go back to work.

Q Mike, if I can just follow up on that. Speaker Gingrich sent a letter to the President asking him to urge the Teamsters to put the last proposal out for a vote. Has the President had a reaction to that?

MR. MCCURRY: Well, that is essentially the company's position. In any labor dispute like this it's not wise for the administration to side with one party or another as we try to encourage them to adjudicate their differences. That would simply be intervening on behalf of the company and the administration has not chosen that path.

Q Mike, on this 15,000 job issue, though, number one, do you take that as a threat from the company to say at least 15,000 jobs are gone?

MR. MCCURRY: It's just not useful for the administration to characterize what the parties are saying publicly. They've been saying plenty; we've been trying to get them to minimize their rhetoric and maximize their negotiating. And that's the -- it would be more useful for them to talk about these issues face to face at the negotiating table. And that's, of course, what we're trying to get them to do.

Q The second part of that -- if, indeed, they're serious that 15,000 jobs will disappear, does that put more pressure on the administration to take some decisive action?

MR. MCCURRY: The pressure on the administration is to continue to try to get both of these parties to resolve a labor-management dispute that's having some measurable impact on the lives of the American people. That's why the President has been involved and getting briefed by the Secretary of Labor. That's why the Secretary of Labor has been encouraging the parties to consider ideas that she has put before them.

But at the end of the day, what they need to do is settle their differences and go back to work. That's in the interests both of the company and of the workers.

Q There were some picketers at the airport this morning that were forced to go away before the President came so he wouldn't see them. Yet there were also picketers at the UPS facility where we exited the highway. Did the President see the second group?

MR. MCCURRY: We see picketers everywhere we go and we know there are a lot of members of the Teamsters Union that are out on the line now and that it would be hard for the President or anyone to miss. We wouldn't want to see anyone inconvenienced by the President's travels, but I'm not familiar with the individual situation you just mentioned.

Q If I could just go back to the welfare reform issue for a moment. In the speech this morning the President was dismissive of those who had said a year ago that the welfare reform program wouldn't work. Was he referring to Minority Leader Gephardt when he said that? Isn't it an awkward situation for him to be dismissing those critics on the platform?

MR. MCCURRY: No. He acknowledges that there were people within our party that had principled reasons to be against that bill and had a great deal of skepticism. But the President made his decision for the reasons he made it, and he's got his shoulder to the wheel now trying to make the law work. And he's very encouraged by those who even though they may have taken a different point of view are now part of the effort to build bipartisan support for a successful implementation of what is now the law. And clearly, Congressman Gephardt spoke today in that vein, and the President appreciated it very much.

All right. Thank you.

The Democratic Business Council event tonight that's being held on behalf of the Democratic National Committee, they're expecting -- tonight is DNC. Today is DBC. Okay.

Tonight's Democratic National Committee fundraising event will have approximately 175 people expected to raise close to $300,000. They were asking $1,000 per person.

Q Mike -- I think it was $1,000 per person --

MR. MCCURRY: And some, obviously, are going to give more. The soft money contributors will give more, obviously.

That's all I got. Thanks. See you back in Washington.

END 1:09 P.M. CDT