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WASHINGTON -- In the fairy tale scenarios of all those hoping to reform the welfare system, Lynn Woolsey would probably star as Cinderella.

A homemaker and mother of three deserted by her husband, Ms. Woolsey went on welfare for a few years to supplement a low-wage job. She eventually built a career that led to a seat in Congress this year.

Few of the 14 million mostly single women and children on welfare in this country have any hope of duplicating the northern California Democrat's accomplishment. In fact, working poor mothers who need only temporary help as she did to get them past the sudden loss of a spouse or other disaster are not even part of what most reformers consider the problem with the welfare system.

"Despite the tragic circumstances of my life, I always knew I had an advantage over others on welfare," Ms. Woolsey recalled. "I was educated, I could speak English and I was assertive."

Needing a safety net

As President Clinton and Congress turn their attention next year to the more vexing problem of intergenerational welfare families -- grandmothers, mothers and daughters stuck in a hole of dependency from which escape seems beyond imagination -- Ms. Woolsey adds a voice of experience.

"It's been 25 years, but believe me, I don't forget what it's like to need a safety net," said Ms. Woolsey, 56, whose own news releases trumpet the label: first welfare mother in Congress. "I wear it proudly. It's been part of my politics from the get-go."

Not surprisingly, her approach to dealing with longtime welfare recipients is one of compassion rather than rebuke. Thus she finds herself standing on the lonely liberal fringe of a welfare reform movement that is almost certainly going to be controlled by those in the center leaning right.

Compromise is sought

"I'm on the more far-reaching edge," she said of a welfare reform proposal she plans to offer early next year. "I know we have to look toward a compromise, but my legislation will begin a debate about how to make welfare recipients self-sufficient."

Although there appears to be broad consensus throughout Congress and in the nation that the current welfare system should be changed, there are vast differences in approach. Fault lines typically run between the levels of spending contemplated.

Representing the most conservative approach are the House Republicans, who want to cut $5 billion a year from welfare programs now totaling more than $100 billion annually. They would use the savings to reduce the budget deficit.

Their cuts would come from dropping legal immigrants from the roster of those eligible for welfare and capping the annual increases in programs such as Aid to Families with Dependent Children, food stamps, public housing assistance, low-income rental assistance, and the Earned Income Tax Credit for the working poor.

The tax credit was boosted nearly 50 percent by Congress this year -- a $21 billion increase over five years -- in support of Mr. Clinton's first major effort to "make work pay."

"I'm not sure how much sense it makes to cap that," observed Bruce Reed, a White House policy adviser who serves as co-chairman of an administration task force charged with designing the proposal the president plans to offer Congress next year.

Earning can mean learning

Mr. Clinton agrees with the Republicans that a two-year limit should be imposed on the length of time welfare recipients can receive benefits without doing something to earn them. But he likes to think of it as a social contract.

While the Republicans insist that able-bodied welfare recipients take either private or public sector jobs after two years, Clinton aides are contemplating a program more tailored to the needs of the individuals involved.

For example, Mr. Reed said, a teen-aged mother might fulfill her responsibility by taking parenting classes or even by going back to high school to get a diploma.

Sanctions, benefits weighed

Like the Republicans, the Clinton administration is not at all adverse to sanctions, including a loss of benefits, for welfare recipients who refuse to cooperate. And it contemplates some relatively tough new measures, such as requiring unmarried teen mothers to live with their parents. More vigorous enforcement of child support laws is promised.

But Mr. Clinton is determined, aides said, to provide sufficient day care, job training and other support services so that all but a few cases will have no excuse but to cooperate.

Ms. Woolsey said that as she watches the Clinton program take shape, her impulse is to say, "Yea! Yea!" But she's wary because of the administration's determination to be "deficit neutral," which means the money for all new spending must be squeezed from existing programs.

"I just don't think that's realistic," she said.

Nor does Carolyn Colvin, Maryland's Secretary for Human Resources, who has the responsibility for trying to meld federal and state welfare policy into programs that serve the approximately 80,000 on welfare in her realm.

"I am really excited about what President Clinton and Congress are talking about doing," said Ms. Colvin, who has already launched her own innovative program of providing incentives for welfare recipients to get prenatal care and immunizations for their children. "But this talk of taking all the money from existing programs makes me nervous. It takes time to set these things up. What are they going to do with people in the meantime?"

Timing of reform questioned

The Clinton task force doesn't have the answer to that question. Nor have any decisions been made about what programs would be cut, raising doubts about whether the welfare reform issue can be tackled next year.

Rep. Benjamin L. Cardin, a Baltimore Democrat who served on the House Ways and Means subcommittee that considers welfare issues, said he believes the president should concentrate on getting health care reform through next year before taking up the welfare issue.

Universal health coverage as envisioned in the Clinton plan would also be a major component of welfare reform, Mr. Cardin said, because it would both address a major need of single mothers and remove the incentive for the working poor to go on the welfare rolls in order to qualify for Medicaid benefits.

But centrist Democrats, such as Rep. Dave McCurdy of Oklahoma, chairman of the Democratic Leadership Council, said he believes welfare reform can be accomplished more quickly than health care reform and that the party needs "some progress" on the issue to do well in the congressional elections next year.

Whatever the timing, Ms. Woolsey says she is determined that welfare reform be sympathetic to recipients rather than punitive.

In her own case, Ms. Woolsey spent three years on the welfare rolls before she remarried, went back to college for a bachelor's degree and started an employment service for temporaries.

Her political career began in 1984 with her first election to the Petaluma City Council, where she served eight years before winning her seat in Congress.

"One of the things that keeps me from getting depressed when people say this isn't going to happen is: I just say, 'This needs to happen. Let's see how we can make it happen.' "

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