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IS CLINTON PLAN THE WAY TO REFORM U.S. WELFARE?

Up to a point, Democratic presidential nominee Bill Clinton deserves respectable marks for the plan he outlined this week to overhaul the nation's misguided welfare system. His plan contains something for almost everyone - except perhaps those making the dole an enduring way of life. But it has some serious flaws.

The best part of the plan is its good intentions and some of its more sound principles. Seeking to halt the steady rise in the size and cost of the system, Clinton emphasizes that welfare should be a temporary crutch for the genuinely needy, not a permanent prosthesis.As for the specifics of the plan, it contains a mix of suggestions from both liberals and conservatives. For example, it would:

- Limit those on welfare, mostly single women and their children, to two years on the rolls and require the adults to take a job in order to receive benefits. This provision is favored by both conservatives and some liberals.

- Index the minimum wage to the rate of inflation, which appeals to liberals.

- Require the government to supply health insurance, child care and job training for welfare recipients - elements that have been favored by liberals.

- Lift the limit on how much savings a welfare family can have and support a larger earned income tax credit for the working poor, ideas generally supported by conservatives.

In order words, the plan - which Clinton says saved taxpayers $12 million in Arkansas - is a blend of the carrot and the stick. Fine. But there are some problems with the carrot.

Every time the minimum wage goes up, some workers lose their jobs because marginal firms can no longer afford them. That's a prescription for a bigger welfare load rather than a smaller one. The plan would cost $6 billion a year, money that Clinton expects to provide by reducing government waste and cutting defense outlays. But he already has promised to help small business, among others, from these very sources. There are limits to how much the same belt can be tightened.

Moreover, job training won't reduce the welfare load unless the economy starts producing new jobs for the trainees. While government can help ease the impact of a recession, it can't by itself turn the economy around - though less red ink would help along with more private investment.

The simple fact is that the economy is suffering for reasons more fundamental than Washington's well-known ineptitude. The recession is not limited to just this nation but is global.

Not just Clinton but plenty of other political leaders need to get over the idea that more government is the answer to every problem. In fact, more government in the form of red tape and taxes is often part of the problem. Though work requirements and other such reforms are to be applauded, changes in the welfare system alone are still no substitute for a growing economy.