Senate passes welfare bill

July 23, 1996: 9:47 p.m. ET

Bill would end government's guarantee of assistance to the poor
From Correspondent Kelli Arena

WASHINGTON (CNNfn) - The Senate passed a bill Tuesday to overhaul the nation's welfare program in the most dramatic fashion since the New Deal.
     The Republican-sponsored bill would limit welfare benefits to five years and would require recipients to work after two. Federal spending would be reduced by about $60 billion over six years, with about half the savings coming from a cut in Food Stamp benefits and another third from denying disability, nutrition and other aid to legal immigrants.
     The bill's passage means an end to the government's six-decade guarantee of assistance to the poor, relying instead on states to run their own programs with block grants.
     The bill passed by a bipartisan margin of 74-24.
     The House passed a tougher version of reform last week by a vote of 256 to 170. The two bills must be reconciled by both chambers before it can be sent to President Clinton.
     The president praised the Senate for softening the bill to protect children but said more needed to be done if he is to sign the bill into law. He already has vetoed two previous proposals from Congress.
     On the surface there could not be a better time for Welfare recipients to look for work. Unemployment stands at 5.3 percent and economists say companies soon will start competing for workers. But labor experts predict the recipe is not that simple.
     Labor Secretary Robert Reich said other measures are needed to ensure a successful return to the job market for welfare recipients.
     "The minimum wage has to be raised and we need to make sure they have adequate day care and job training. Also, make sure that if there is no job out there that they can have a public sector job until there is a job out there," he said.
     Some experts stress that training programs are needed, but warned that evidence shows the programs don't usually result in higher wages.
     Gary Burtless of the Brookings Institute said the economic expansion hasn't reached the bottom of the economic ladder.
     "Wages at the bottom of the job market have not been climbing -- they're shrinking. And the fringe benefits that people receiving this part of the job market have also been deteriorating," he said.
     But economist point to a bright spot. Fast growth in the healthcare, restaurant and day care industries could mean greater demand for workers and lead to higher-paying positions.
     Reuters contributed to this story