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REMARKS BY:		DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES
PLACE:			National Association of Counties, 1997 Annual Legislative Conference, Washington, D.C.	
DATE:			March 3, 1997

Rest assured, I am not here to break that pledge.

But your conference is the perfect occasion to note that bigger is not always better. That higher costs do not always mean higher quality. And that if you want to find new creativity, don't keep looking in the same old places.

Exhibit A: This year's Academy Awards. Low budget, independently produced films about real people facing real problems walked off with 4 of 5 Best Picture nominations. Why? Because compassion, courage and forgiveness touches us more deeply than all of the explosions and car crashes that Hollywood can produce.

And then there's Exhibit B: America's counties. Not marquee names necessarily, but marquee places that have taken on new responsibilities in times of great change and great challenge. Last Friday, the first part of our tobacco regulations went into effect - and we took another giant step in a mission that will be recorded as one of the most important public health triumphs of our century. I want to thank you for standing up to kick Joe Camel out of our children's lives - and for maintaining tough local restrictions on tobacco.

But that's not all you've done.

Every day millions of Americans look to you for good health and safer communities. You are the laboratories of innovation, and the repositories of accumulated experience. And, in an era when we must balance the federal budget by 2002; move millions of families from welfare to work; and ease the fears of parents who don't have health insurance for their children - you are also what French filmmakers used to call the New Wave.

The fact is, you are standing at the doorway of history - a leading player as the relationship between the federal government and the states and localities change. Just think about what's happening to the way government does business. Roles are shifting as states and counties become the architects of their own future. Power is shifting as solutions are no longer imposed by Washington; burdens are shared; and new players come to the table. And how we measure success is shifting as we define new goals for a new century. Together, we are stepping into a time shadowed by uncertainty, but filled with opportunity. In this new world, some might be tempted to take the attitude of that character in the movie Jerry Maguire who says, "Show me the money." But we know that money is scarce for all of us - and that we must put our budget in the black.

The question is how? How, in this time of great historical change, when the old rulebook for solving our economic and social problems is being thrown out the window, do we move forward together? How do we make sure that we balance the budget without hurting our counties or the citizens we both serve? These are tough questions - with no easy answers. Let's begin with welfare reform.

Counties administer all or part of the welfare programs in 16 states. And in other states, you are helping citizens on the economic margins by providing child care, and by running neighborhood health clinics and Head Start centers.

It wasn't always envisioned that way.

While, Harry Hopkins, a close advisor to President Roosevelt, wanted the ADC program to be federally administered, President Roosevelt and others understood that poor children are the responsibility of all levels of government. So AFDC was designed to harness the leadership and ingenuity of states and localities. Over time, that spirit of partnership began to fade. States and localities did not receive the flexibility they needed to create programs suited to their communities. By the 1980s, everyone agreed that the welfare system was broken, and a new consensus began to emerge - in part because of the success of many local welfare demonstration projects. These demonstrations - in the words of the Institute for Research on Poverty - became the "locus of reform" - reform that eventually led to our emphasis on demanding responsibility, making work pay, and giving states and counties greater flexibility.

As some of you may know, the Manpower Demonstration Research Corporation just published a study showing that Los Angeles County has successfully turned their welfare office into an employment office. According to California, in just two years, there was a 160 percent increase in job placements - despite the area's high unemployment rate. We need to replicate that kind of success - as many of you are already doing - and make welfare reform a chance for counties to put people to work, strengthen families, enlarge your tax base, lower crime, and promote the general welfare - as envisioned by the Constitution .

But it won't happen overnight.

That's why when the President signed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, he said unequivocally, this is the beginning of welfare reform, not the end. Because let's be frank. While we all agree on the goal of welfare reform, I know some of you preferred a different road to reach that goal. But there's only one road all of us should follow now - the road of making this law work. We must get on that road to create jobs, protect children, and provide opportunity in exchange for responsibility.

Let me be clear: The federal government still has an important role to play in moving people from welfare to work. Even before welfare reform became law, we had given 43 states the flexibility they needed to test innovative welfare strategies. And that flexibility, combined with a strong economy, have sent welfare rolls into their sharpest decline in history: Down by almost 2.5 million in the last four years.

Our hard work over the past four years has brought other good news. Paternity establishments are up 50-percent since 1992. And in 1996, we collected a record 12 billion dollars in child support payments. Although states have until July to submit their plans, we've already given the green light to 38 states to begin their Temporary Assistance for Needy Families reforms.

Our role will be to implement the law the right way. We'll be paying special attention to child support enforcement, work participation rates, child care that supports families, and data reporting that keeps the focus on results. And more than anything else, we'll be working to ensure that people who turn in their welfare checks have a real opportunity to earn paychecks. That's why the President's FY 98 budget helps states and counties create jobs - and provides tax incentives for employers to hire long term welfare recipients. The Welfare-to-Work jobs initiative would provide 3 billion dollars over five years to create jobs for welfare recipients who are the most difficult to place. And the Work Opportunities Tax Credit would give employers a 50 percent credit on the first 10,000 dollars in wages paid to new welfare hires.

I'm pleased that this is an area of bi-partisan cooperation - where Congress and the Administration are joining together to form a joint task force on welfare to work incentives. At the same time, we know parents can't move from welfare to work if they do not have safe, affordable child care for their kids. That's why in the welfare bill, we fought for - and won - almost 4 billion dollars over 6 years for child care. And we're continuing to expand Head Start so that by the year 2002, it will serve one million children.

But we know government cannot do this job alone. It's going to take States and foundations; businesses and labor; religious institutions and universities. Everyone must be part of this fight - especially you. We need you to transform the very culture of the system from a welfare program to a work program. Your welfare offices have to become employment offices. Your social services must become part of your job services for working families. And your welfare caseworkers - many of whom work for counties - have to slip into new shoes and focus on job training and child care. On how to get a job - and how to keep a job.

Unlike the old days, states and counties are now in control. But with this new flexibility, comes a new and critical responsibility - to use your ties to the community, your creativity, and what you learn from each other to help welfare recipients make the transition to work. And in the days ahead, we pledge to stand with you and work with you - so that we can succeed together. Already, regional staff of HHS and other federal departments are consulting with states and localities. And soon we'll be sending you the first in a series of packages that give you specific contacts, a summary of the new welfare law, and a handy compilation of the federal government's guidance on welfare reform.

I want to applaud you for planning four hearings around the country to share information about what counties are doing to make welfare reform work. And I want to let you know that we would be pleased to do whatever we can to help make these hearings a success. But, even as we join together to move people from welfare to work, we must also join together to make sure that we never punish people who cannot work.

Because that is not consistent with the goals of this bill or the values of this nation. There are very few of us who are not descendants of legal immigrants. No person who is in this country legally - paying taxes, being responsible members of the community - should be denied basic care because they lost their ability to earn a living. And certainly no child who now receives Medicaid should have their health insurance taken away. We must change those parts of the law that deny coverage to those who cannot work, to disabled children - and to legal immigrants who are either children or disabled adults.

I want to thank you for standing up and fighting for legal immigrants. Under our proposal, legal immigrants who are children or become disabled after entering the United States will be eligible for Medicaid and SSI. And poor children will be entitled to the same Medicaid coverage they now receive, even if they lose their SSI benefits because of a tightened definition of disability. We want to restore some of the deep cuts in the Food Stamp program, especially for childless workers in areas of high unemployment who are looking for work but cannot find it. And we want to work with the Congress to do all of this - and do it now.

Our second major challenge is to protect and reform Medicaid.

When Congress tried to block grant Medicaid last year, the President drew a line in the sand and said "no" - we will not do it. And with your help - for which I cannot thank you enough - we kept the guarantee of Medicaid coverage for our most vulnerable citizens. I know that counties are deeply involved in Medicaid, and that in 27 states, you pay part of the non-federal share. And, I know you have raised some concerns about our current Medicaid proposal.

So let me say this: Within the context of a balanced budget, our proposal is the very best way to keep our collective promise to protect your low income children, pregnant women, frail seniors and citizens with disabilities. And it's the best way to make sure that new burdens are not placed on counties.

The President's plan will save a total of 22 billion dollars and a net of nine billion dollars, one-third from the per-capita cap. Be clear, the cap is not a block grant, and it's not a cost shift to the states or counties. The federal government will continue to match state Medicaid spending for each individual enrolled - so there will be no incentive for states to deny coverage. That means no matter what unexpected scenario crops up in the future: When the economy turns down; when populations grow; when enrollments expand because of outreach - federal spending on Medicaid will still expand to meet the needs of poor people in your counties.

I have one more challenge to talk with you about today.

We know that kids without health insurance are almost twice as likely to have missed seeing a doctor in the past year as children with health insurance. That means they're more likely to miss school due to illness. They're more likely to use emergency room medicine - the most expensive kind. And if they come into one of your county operated health clinics, it may be for a big problem that could have been treated when it was still a small problem.

That hurts all of us.

Yet, today, 10 million American children have no health insurance - and the vast majority of them are in families where parents work hard and play by the rules. As the President said in his State of the Union address, "No child should be without a doctor just because a parent is without a job." That's why we are dedicated to covering up to 5 million of these children by the year 2000. But we truly need your help.

Our proposal is incremental reform that builds on the existing health care system. In the 1980s, Blue Cross and its business and community partners began insuring children of laid off steel workers in Pennsylvania. Since then, many states have started their own programs to cover uninsured children. Pennsylvania's Children's Health Insurance Program - CHIP - when combined with Caring for Kids, insures 50,000 children. Using one of our Department's Medicaid waivers, MinnesotaCare is covering around 45,000 kids. And Florida Healthy Kids, which is funded by public and private sources, enrolls children at school and has expanded to 13 counties.

The problem we face is, not all of the 10 million children without coverage are uninsured for the same reasons. Many are children of low income - but employed - parents who cannot afford private insurance or do not receive insurance at work. Some children are eligible for Medicaid and don't receive it - sometimes because their parents don't know they qualify or even because they believe there is a stigma attached. Other children float in and out of eligibility for Medicaid because, for example, their parents divorce, become unemployed, or move from welfare to work.

We looked at these facts and knew that there was no silver bullet - and that only a comprehensive strategy could work. And that's exactly what we've proposed. First, we're helping workers between jobs get up to 6 months of coverage for themselves and their families. This will help insure 700,000 children. Second we're dedicating 3.75 billion dollars in state partnership grants to help cover children whose families earn too much to qualify for Medicaid and not enough to afford private insurance.

Third, we're allowing you to provide one year of continuous Medicaid coverage for children who qualify for it. Fourth, under current law, we're adding one million adolescents to the Medicaid rolls over the next four years. And fifth, we want to team up with you, in your states, and the private sector to reach out to the three million children who qualify for Medicaid - but aren't enrolled.

But this challenge - like the others I issued today - will not be met by any of us acting alone. As I said, it's going to take each and every one of us working together. Counties in particular belong at center stage. You are closest to the families in need of temporary assistance. Closest to schools, businesses and religious institutions. Closest to everyone who has a part in building a new culture of work and personal responsibility.

Because when you lead - as you have done so many times in the past - families and children for whom the norms of work and good health have sometimes been lost, will win a second chance.

The same chance as one of this year's Academy Award nominees: The chance to "shine."

Thank you.