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Inside Account: Bill Clinton and Welfare Reform

Bill Clinton Signing Welfare Reform Bill

Today is the 20th anniversary of the signing of the welfare reform bill or the Personal Responsibility and Work Opportunity Act.

Bill Clinton campaigned on welfare reform, saying, famously, “to end welfare as we know it.” The pressure from Congress to reform grew as the Republicans won big in the 1994 mid-term elections and the “Contract with America.” By 1995, the reform bill stalled until the government shutdown and Senate Majority Leader Bob Dole resigned to run for president. 

The law ultimately gave states block grants with some restrictions: adults on federal government funded welfare had to find employment within two years, and could only receive welfare for five years. Twenty years later, policy makers are still debating the effectiveness of the law as it was amended over the years, especially for recipients that are the least educated and prepared to enter the job market. 

Here are a few inside accounts of President Bill Clinton’s struggle to reform welfare.

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Roger Altman (Deputy Secretary of Treasury): 

I recall so many people feeling that, as you remember, the administration, in some form or other, lost three times, and each time came back with a more conservative version. So two points: one, I support what the President did and I think he deserves a lot of credit for it. It’s not clear to me however that history will accord him that credit. There are too many people in his own administration, at least at the moment, who think that all he finally did was succumb to the Republican position, and anybody who wore a D on his shirt and supported the Republican position could have brought along enough Ds to make the bill happen. 

So if you survey the 50 most senior people who ever served in the Clinton administration, about 25 of them will say welfare reform was a great triumph for the President, about 25 of them will say he just caved. I’m in the first camp, it was a great triumph, but I’m not sure that history will accord him that.

Henry Cisneros (Secretary of Housing and Urban Development):

Russell Riley: This was not an issue that you ever gave any serious consideration to resigning over?

Cisneros: No, as a matter of fact, it’s one of the sadder photographs of the administration. We had a meeting at about 10 o’clock. It went to about noon and it was in the Cabinet Room and Donna, Rubin, Panetta, the Vice President, the President, and a host of other people were there. We were each asked to go around the room and give our opinion because the President was going to have to make a decision that day. He seemed to be genuinely undecided. I think in retrospect he was not. This was the final Clinton-style hearing on the subject.

As we went around the room I stated specifically what I did here today: if people are going to be hurt and you don’t have a way, then it’s not right. It was probably not the best advice, because frankly, he was in a very tough political rock and hard place, but that’s just where I came down. The Vice President reserved his opinion for a private discussion, but others, Panetta, said, You have to sign it—no, no, I think Panetta was against. Panetta was against.

In any event, they then retired from the Cabinet Room, meeting was over and went into the Oval, just the President, Vice President, and I think it was Panetta. We went back to the department. About 1 o’clock got a call. The President needs you at 2 o’clock in the White House pressroom for his announcement on welfare reform. So here was a wall in the pressroom and there were Panetta, myself, Shalala, those of us who had advised the opposite position, but we were expected to be there and endorse his decision, which was to sign.

So we were against the wall there, and in the New York Times photograph the next day it was the most hangdog-looking group you’ve ever seen. We literally should have been more careful, should have had better poker faces, but we all looked like pictures of defeat.

Peter Edelman (Assistant Secretary for Planning and Evaluation; Counselor to HHS Secretary):

The Governors then work with the House people to draft a combined Medicaid and welfare bill. But the point is that the House people don’t want the President to get credit for signing a welfare bill. So the House Republicans cheerfully couple the Medicaid with the welfare in one bill because that’s just insurance that it won’t go anywhere. It sits there like that through the spring, and we’re thinking, Oh, maybe it’s going okay here. Then you get in June, the 104 freshmen and sophomore members write this letter to Gingrich in which they say, "You’ve got to decouple the Medicaid and the welfare because we’ve got to send him a bill that he can sign. We can’t get reelected if we don’t show that we’ve done something." They really hadn’t done very much.

Gingrich agrees to that and they decouple it, so what is this about? It’s a deal where essentially Clinton is saying to the House, "Go ahead and stay Republican and I’ll keep on being President. It’s a deal." Why would the Republicans agree to that deal? Bob Dole is down the tubes anyway…

Edelman: [on resigning in response to welfare reform]: No, it was a very tricky business. What we wanted to do was make sure it was understood that we were resigning on principle, and it was hardly a principle if we waited until after he was elected. On the other hand, we did not want to jeopardize his reelection. Very tricky. So we agreed we would have no press conference, no appearances on any morning or news show. We would simply each put out a little statement to our staff and if that leaked so be it.

Al From (Domestic Policy Advisor to the Clinton Transition, Founder & CEO of the Democratic Leadership Council):

It was very funny. Either the day of—it must have been the day before, he was going to make his decision on whether to sign the bill. Hernreich called me. I was up in New York. I remember this vividly. Holly Page was with me. Clinton wanted to talk to me before he made his decision. So we were in a cab to LaGuardia with an Asian cab driver who couldn’t speak English. It was one of those times that every time you got on the cell phone, the call was dropped. I don’t know how many times the President would call back. It was just bizarre. And this cab driver couldn’t believe it. He barely spoke English. I made strong arguments to the President that he ought to sign the bill. If he wanted to come back, this is his central promise.

As I probably said last time, I think welfare reform was the most important idea of the ’92 campaign because, to me, the main message of the campaign was, you vote for this guy, you’re voting for somebody who is different from the Democrats you’ve been voting against. If after the third time he had not done that, I think it would have hurt him badly in ’96. It’s also the right thing to do. Ending welfare was one of the great successes of the administration.

William Galston (Deputy Assistant to the President for Domestic Policy):

The welfare reform task force was closer to a classic interagency process. The fundamental problem with that process wasn’t internal. It was the fact that the President had made what I regarded as an ill-judged decision to defer to the congressional leadership on the sequence. That was the first problem with the process. 

The second problem—which I think was certainly in part a function of the first, but also of other factors—was that the President did not drive that task force for six or nine months, with the same sense of urgency that he brought to other issues. That baffled me, given the fact that this was a signature campaign issue. So it took too long. Because the President wasn’t involved early on in the way he should have been, lots of different discordant voices in the administration were unleashed, and Bruce had a much harder time. (I’m not sure what he would say about it now, because he’s a more discrete guy than I am. His nickname wasn’t Buddha for nothing.) His job was made substantially more difficult by the fact that it was a playpen without adult supervision. 

There were substantial forces—not only in the permanent bureaucracy but also, as the world can now see, among the President’s own political appointees—who never agreed with him about welfare reform. He really needed to step in early and say, "This is going to happen, and it’s not going to be an incremental change in the system. Yes, I want to see options, but the options have to be within a particular range, and there are some things that are not open to discussion. I went around the country for a year telling people we were going to end welfare as we know it. I meant it, and I mean it. Let’s do it." It didn’t happen, to the best of my knowledge.

Russell Riley: Ultimately he signed legislation. 

Galston: Yes, but the draft legislation wasn’t really finished until the summer of 1994, which was much too late. As a result, he totally lost control of the legislative process and was back on his heels on a signature issue. Now he was able, ultimately, to sign the bill—and take partial credit for it, but it never should have worked out that way.

Patrick Griffin (Assistant to the President for Legislative Affairs):

Dole leaves. Newt and Lott realize they’re just going down the tubes as a result of the shutdowns and not getting anything done, for which they were getting the lion share of the blame. They began to realize they could lose this whole thing (the majority). Consequently, they begin to cut deals with Clinton on welfare reform, tax cuts for small businesses, minimum wage, a little healthcare bill, and then ultimately the budget. They get reelected with larger margins, and Clinton does, too. The formula that works to win is the one that they then refuse ever to do again with Clinton and are made to swear, by their base, never to cooperate with him again. It was really incredible.

Bruce Reed (Domestic Policy Advisor):

It was probably the most remarkable meeting I took part in during the Clinton years because everybody recognized what a hard decision it was for the President and how momentous a decision it would be, so no one wanted to overstate their case, which was unusual. We had a remarkably civilized, respectful debate on an issue where everybody felt very strongly but no one wanted to put their thumb on the scale. 

The meeting started off with Ken Apfel laying out what the conference committee had agreed to and the plusses, and on the list of improvements we wanted, what ones we had gotten and what ones we hadn’t, then Shalala made the case against the bill, and then the President opened it up for advisors to speak their minds. We went around the table. Most of the Cabinet was against it, with the exception of Mickey Kantor.

We probably spent half an hour listening to people’s arguments against it, and then the President turned to me and said, “So Bruce, what’s the case for the bill?”  I told him that the welfare reform elements of the bill were better than we could have hoped for, that it had more money for work, more money for childcare, and we’d gotten every improvement we’d asked for, so that as a welfare reform bill it was a real achievement. He agreed that it was a good welfare bill wrapped in a “sack of shit,” I think was his phrase. 

I said that the child support enforcement provisions alone were worth enacting the bill and that the dire consequences the opponents of the bill predicted really wouldn’t happen because the cuts in benefits for illegal immigrants were too onerous and would never stand up over time. Congress would have to come back and fix them. Most important, we’d made a promise to the American people that we were going to end welfare as we know it and we’d be hard-pressed to go to them and explain why this bill didn’t do that. We shouldn’t assume that we’d ever get another chance, that the history of the issue was that it wouldn’t come our way again and that we owed it to the country to keep our promise. 

The President agreed that this might be his only chance. He said he didn’t think a Democratic Congress would have given him a welfare bill he could sign. Harold Ickes had argued against the bill, so I told him the story of about how Roosevelt had faced this same dilemma when he created the WPA [Works Progress Administration], that [Harry] Hopkins had wanted to make sure that the dole was based on work and that another Harold Ickes had argued the opposite. Of course he wanted to know how that turned out, so I told him that Hopkins had won. The discussion continued from there for a while longer. A few other people chimed in on my side after that, and…Rahm said, “Do what you think is right.” There’s no question that Rahm was for it, but it was probably the best evidence that nobody was putting their thumb on the scale when Rahm, who never restrained himself, held himself back. The Vice President turned to me a couple of times and whispered a couple of times—I was sitting next to him—asking me questions, and during the course of the meeting asked a number of helpful, leading questions that made me think he was in favor of the bill. I didn’t know where the President was coming out, I didn’t know for sure where the Vice President was coming out, and they gave no indication whatsoever at the meeting. I think the President didn’t want to decide at that meeting. The meeting broke up finally…

He went into the Oval Office and then Panetta came to get me because the President had another question about a memo Shalala had given him. I went into the Oval Office to talk to him, to rebut yet another criticism, and we ended up having the meeting all over again with the President, Vice President, Panetta, John Hilley, and me...

The President’s sitting at his desk. We’re standing around him. He was asking questions, but in essence, Panetta made the case against the bill, I made the case for it. The President agonized, the President desperately tried to get the Vice President to help break the tie, and the Vice President tried mightily to avoid making the decision, to avoid tipping the balance, but eventually said he thought that the cuts in benefits to immigrants would have a harsh impact on them and that the President had a responsibility to look out for groups of people who couldn’t speak up for themselves. But on balance, the welfare system was so broken and had to be fixed, and this was our chance to do it, and the benefit of the welfare reform outweighed the cuts in immigrant benefits we didn’t like. The President agonized some more…

The President had said at the outset—I guess I left out a few things from the earlier meeting—that we should put the politics aside because it was too difficult to predict the politics, that he felt confident that he could beat Dole in any event. He had a substantial lead in the polls at that point. The Vice President had said the same thing, “Let’s make the decision on the merits, not the politics.”

The other interesting complication I left out was that the Republicans, once they realized that they were going to send the President a bill that he might sign, decided to do it in a way that would put him in the most awkward possible position politically. They rushed it through in July so that they could present it to him in advance of the Democratic convention, which was coming up at the end of August, because they figured they could win either way. Either he’d veto it and they’d get to keep the issue, or he’d sign it and Democrats would be in disarray at the convention. 

So back to the Oval Office. We spent about half an hour in there with him. Finally he looked up from his desk and said, “Let’s do it, I’ll sign it,” and told me to write the statement. We went down to Don Baer’s office, and fortunately we’d written a signing statement instead of a veto statement, so we made a few changes to incorporate what he had said in the Cabinet Room. The President changed into a suit, reviewed the statement, went to the press room, and announced that he would sign the bill. They asked him about his differences with Moynihan, and he said Moynihan had been right so many times over the years and he just hoped that he, the President, was right this time. 

Bryan Craig is a Senior Researcher for the Presidential Oral History Program

Date edited: 08/23/2016 (10:41AM)


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