Stealing Clinton's clothes: If Tony Blair needs a populist platform, he could do worse than follow US welfare reform, says Rupert Cornwell

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IMITATION may be the sincerest form of flattery. In politics, though, it is more often proof that common sense knows no frontiers. Thus it is that politicians of left and right, in the United States as in Britain, are starting to rethink state provision of welfare.

And the reasons in both cases are not just the spiralling costs to the exchequer, but a sense that welfare provision is creating an unhealthy culture of dependency.

The new Labour Party leader, Tony Blair, is the latest politician of the left to question universal welfare provision. At the weekend he criticised women who became single parents out of choice, while his first address as leader suggested he disapproved of the state paying able-bodied young people to do nothing.

But Bill Clinton was there before him. Whether Thatcherism begat Reaganism or vice versa, the entire political spectrums of both countries have moved rightward. In the United States, as in Britain, the shift was dictated at least in part by inescapable evidence that the welfare system as invented in the US by Roosevelt and in Britain by Beveridge was simply not functioning as intended.

In the US, when Candidate Clinton turned a pledge to 'end welfare as we know it' into a campaign mantra, almost the entire country was behind him. There was a broad consensus that a safety net had become a way of life; welfare seemed to militate against the very virtues of work, responsibility and stable families that it was designed to promote. The diagnosis, if not the cure, united rabid right-wing talk show hosts with Jesse Jackson.

Welfare was seen as having become yet another strand in that bleak American tapestry of race, broken families, out-of-wedlock births, drugs, crime and dying inner cities, breeding a culture of dependency and creating a poverty trap. Now, after a fashion, President Clinton has started to deliver, with a programme of measures designed to curb welfare payments and get people into work.

A smattering of liberals protest that he has been too tough. Far more Republicans accuse him - once more - of promising a mountain and coming up with a mouse. Compared with the rhetoric of two years ago, that may be so. But a start at least has been made, a pilot plan which if implemented would nonetheless be the biggest change in the US way of welfare since the New Deal.

In essence, the scheme offers welfare recipients a pact: job training, child support and tax breaks, in return for which, after two years, recipients must find a job. Initially the plan targets only parents born after 1971, thus affecting only a third of the 14 million Americans receiving Aid to Families with Dependent Children (AFDC), the main welfare programme. Once that two-year grace period is used up, they will have to work - ideally in the private sector, but most likely in publicly subsidised jobs.

Many of the plan's underlying assumptions look wildly optimistic. According to the White House, the package will cost dollars 9.3bn, of which dollars 7bn goes on education, job training and child care. A bare dollars 1.2bn has been earmarked to generate a projected 400,000 subsidised jobs. Far more will probably be needed: the final bill could be up to dollars 20bn.

To be fair, this is not all. A key piece of the welfare jigsaw has already been enacted - the dollars 21bn Earned Income Tax Credit contained in the hard-won 1993 deficit reduction package, and which Kenneth Clarke would like to match in Britain with more generous family credits and higher National Insurance thresholds. Designed to lift many low-paid workers out of income tax altogether, the EITC strikes no small blow at the poverty trap.

But in the US, as in Britain, the bottom line is money - or rather the lack of it. A Democratic President who believes instinctively in government has been hamstrung by the deeds of his Republican predecessors. After the unsustainable deficit binge of the Reagan years, the 1990 budget agreement between Congress and President Bush placed a straightjacket around so-called 'discretionary' spending. New expenditure must be offset either by cuts or new taxes. Mr Clinton has ruled out a tax increase to finance welfare reform. To cover the cost of the programme, the White House has come up with a ragbag of savings, including lower social security benefits for alcoholics and drug addicts, and reduced welfare benefits for immigrants who are not US citizens.

But, one may wonder, why the fuss? Why, when there is a bipartisan majority for welfare reform, and when the budget deficit is a comparatively respectable 3 per cent of GDP, does not Congress just rewrite the rules? The answer may be summed up in two words: Ross Perot. Deficit cutting was the issue that gave the Texas billionaire a fifth of the popular vote in 1992. Two years later, he is down but far from out.

To re-open the spending sluicegate could invite a voter backlash, if not at this autumn's mid-term elections, then in 1996.

Theoretically, the two areas where there is most potential for Congress to create slack by reining back spending are social security, and the Medicaid and Medicare federal health insurance schemes, whose soaring costs have kept the deficit so high for so long. But this would be to ignore the millions of voters who live off these programmes. For the average Congressman, their ire at the ballot box is at least as perilous as the fury of the Perotistas. And welfare is not the only claimant for what spare money there is. Mr Clinton must first fund healthcare reform, plus a crime Bill costing up to dollars 30bn over the next five years.

Predictably, there is no place for the truly radical measures urged by the right. Mr Clinton is waging war on 'deadbeat dads', by forcing hospitals and mothers to establish the paternity of illegitimate children and tracking down fathers who skip support payments. But a dollars 300m campaign against teenage pregnancy is the only gesture towards the theses of Charles Murray, sociologist and darling of the conservatives, who sees unmarried motherhood as the root of every evil and would deny welfare benefits to such women completely, even if it meant placing their children in orphanages. With his caution, the President is laying himself open to barbs from Republicans who half sense a second bite at an issue which looked lost. 'The end of welfare reform as we know it,' Bob Dole called the plan. At the federal level, the snake- tongued Senate minority leader may be right, though the broad cross-party consensus means some version of reform will probably get through Congress sometime in 1995. But at state level innovations will continue. California is toying with what is dubbed 'Wed-fare' - financial incentives to encourage welfare recipients to marry and create stable families. Massachusetts wants to divert AFDC cash payments into child support and health insurance, while AFDC recipients are forced to seek work. If they fail to find a job after a year, they have to enrol for paid community service.

And whatever the gap between easy campaign rhetoric and harsh Washington reality, welfare reform is still a winner for the President. Despite the ascent of the religious right, and the constant harking about family values, polls still show that four out of five Americans want welfare changed, not eliminated. It was by donning the mantle of a 'New Democrat', freed of the old liberal dogmas which so long crippled his party, that Mr Clinton won the Presidency, and of his 'New Democrat' credentials, none was stronger than the welfare reform card. Now he is playing it, and Republicans fret over a hijacked cause.

In Britain, the case for welfare overhaul may or may not be as strong as in the US. But youth is not the only similarity between Bill Clinton and Tony Blair. The Tories saw what happened to their old friend George Bush in 1992 at the hands of a beguiling, telegenic moderate. Welfare is an issue that John Major and Kenneth Clarke would be foolish to let the Opposition steal.

(Photograph omitted)

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