There's plenty to complain about in the "balanced" budget deal, but one thing stands out: welfare. So eager were House speaker Newt Gingrich and Senate majority leader Trent Lott to seal the deal that they capitulated to Clinton-administration demands whose effect will be to undo last year's historic welfare reform.
The Republican cave-in took place during budget negotiations on Saturday, July 26. White House chief of staff Erskine Bowles told Gingrich that Clinton would veto the entire budget-balancing taxcutting package unless Republicans removed this one little welfare-related provision that would undo mischief perpetrated by Clinton's labor department.
If you want to ease people off of welfare rolls and into the work force, most reformers agree, it helps to encourage employers to hire them -- a sure way being to exempt companies participating in workfare programs from federal regulations like worker's comp and the minimum wage, so that the welfare recipients can be hired and acquire good work habits, without employers' incurring expensive obligations.
After all, if these workers were productive enough to get hired at the minimum wage with all the attendant federally mandated benefits, they wouldn't be on welfare to begin with.
But Clinton's labor department will have none of that -- the provision might threaten union workers, you see. So earlier this year, the labor department issued rules that mandate full benefits to welfare recipients in work programs -- in effect, outlawing welfare-to-work reforms.
Gingrich once argued against this, as did most other Republicans and many Democrats. But faced with the prospect of confrontation, the Republican leaders relented. In return, Clinton was supposed to release a letter suspending the labor rules for nine months. But when Republicans asked about the letter the next day, they were told no such letter would be written. Even in the face of this welshing, Gingrich and Lott opted not to make a fuss.