BACKGROUND: HR4, the Personal Responsibilities Act of 1995 would substantially restructure the nation's welfare system. It would limit eligibility of recipients, cut federal welfare spending and would cede much control of welfare programs to state governments through "block grants,"consolidated federal grants with few restrictions on their use. Federal requirements on state welfare spending will be dropped, and new work requirements will be imposed on benefit recipients. The House version of the bill would save about $62 billion over five years, while the Senate Finance Committee's bill would save $24.1 billion.

STATUS: The House approved its version (the Family Self-Sufficiency Act of 1995) in March by a vote of 234-199. The final Senate bill will have several differences with the House bill. Democrats and moderate Republicans have more influence in the Senate than in the House, and have softened the bill. For instance, provisions that would ban benefits to unwed teenage mothers and additional aid to mothers who have more babies while on welfare were stricken on September 13 against vehement conservative protests.

KEY PLAYERS: Sen. Bob Packwood (R-OR), who has announced his retirement in the wake of an ethics scandal, chaired the Senate Finance Committee which cleared the welfare bill and was to be a key floor leader. The absence of his parliamentary skill will make the process that much more difficult for Sen. Bob Dole (R-KS), whose ability to lead the Senate to a bill acceptable to his party will be tested. Once again Dole will find Sen. Phil Gramm (R-TX), his rival for the GOP presidential nomination, staking conservative ground and attacking Dole's compromises.

PRO: Reformers argue that America's welfare system has not only failed its mission, it has become part of the problem by creating dependency among the poor without elevating them, encouraging illegitimacy and wasting billions of dollars through inefficiency and plain ineffectiveness.

"[The current system, while] trying to give people material wealth and lift them out of poverty, is luring them into a kind of spiritual poverty by destroying their families and their incentive to work." -- Rep. James Talent (R-MO)

CON: No one argues today that the welfare system is flawless. But opponents of the Republican plan see welfare cuts as a brutal turn away from the country's neediest citizens, including children. Since states will have few requirements on welfare spending, there are no guarantees that in times of tight budgets the poor may see even less assistance. And while Republicans have talked tough on work programs, they have left work requirement language vague enough to be meaningless.

"Don't kid yourself, from the point of view of Congress, welfare reform has stopped being welfare reform primarily. Primarily, welfare reform is a way to cut spending on the poor so we don't have to worry about it and we can balance the budget in seven years and give a big tax cut largely benefiting upper-income people. That's what this is about." -- President Clinton

WHAT'S NEXT: The Senate is nearing a decision on a final welfare bill, and is completing a host of compromises and negotiations to bring moderate Democrats on board. The bill will then go to a House-Senate conference where several differences will have to be hashed out. (There is some chance that the vote will be postponed and included as part of a major "reconciliation" bill in October.)

INSIDE SCOOP: Dole and the Senate have been dogged by charges that they are slowing down the House Republicans' "Contract With America." If the Senate produces a watered-down bill, Dole will be open to fire from party conservatives whose support he needs for the presidential nomination, and from Gramm. The Republican welfare reform program is a prime example of the GOP's prized goal of "devolution" -- the gradual ceding of much federal authority to the state level.