One hot and rainy night in July in North Philadelphia, Mary Manley did something virtuous ghetto mothers are not supposed to do. She tried to talk her daughter Michelle into quitting her job and going on welfare.

Mrs. Manley worked up to the subject slowly, because she knew it would be a painful one. She bent intently over her ironing. She hummed softly along with the gospel music playing on the radio. When there was a loud clap of thunder outside, she looked up, worried.

"We were raised to fear that thunder and lightning," she said. "We'd sit and not talk and be quiet."

Michelle, sitting with her three-year-old, Bryant, on her lap, nodded. "When Bryant heres it," she said, "he tells me Jesus is talking. And he's scared."

Mrs. Manley went back to her ironing. "Michelle," she said softly, without looking up, "you better put in for some grants."

Michelle's face stiffened and, without stopping to think about it, she stuck her chin out in a defiant pout. "I'm not," she said. "Never."

Her mother gave her a sharp look. "Don't say that," she said.

"Well, I don't plan on it, ma."

"Well, you don't plan on it, but you know what?" said Mrs. Manley. "I went down to legal aid today, and the lawyer told me you should go down and put in for a grant."

"They are so nosy," said Michelle. "They want to know all your business for that little bit of money."

"That's the way it is," said her mother, who knew from long years of experience. There was a fierce bolt of lightning. She got up and turned off the lights.

"Jesus talking now," said Bryant, and then he began to cry.

"Shut up, boy," said Mrs. Manley. "Michelle, go put some eggs on."

Mary Manley and her family are not important people. They live in a bleak big-city ghetto; so do millions of other people. The Manleys are on welfare; so are 10 million other Americans. Like 25 million other Americans, they are poor, or so they consider themselves, anyway. Like more than 10 million other black Americans, they live in a house without a male wage-earner. When the social policy makers of Washington study federal programs, the Manleys are buried somewhere in the tables of statistics. Mary Manley is one more number.

To Mrs. Manley, on the other hand, Washington is a tangible presence. Although the bad part of Philadelphia is where she lives, it is Washington that shapes her life. Every time the experts and politicians here embrace a new theory about welfare, the rules change for her, sometimes for the better, sometimes not.

As an abstraction, Mary Manley plays an important part in the life of the nation, because welfare is one of the heaviest words in American politics. It touchest people's deepest feelings about money, work, self-advancement, altruism, even race and sex.

To many people, welfare means poor blacks, although the majority of welfare recipients are white. People blame welfare, which costs the federal government $8 billion a year, for high taxes, for crime, even for creating poverty and failure. Nobody seems to like it. This year's Democratic platform calls it "inequitable and archaic." The Republican platform calls it "degrading, dehumanizing."

Everybody agrees that people on welfare should get off welfare and join the working mainstream of our society, and why they don't is a great mystery in Washington. That's why Mary Manley -- the real person, not the number -- is important.

Mrs. Manley is part of the substantial majority of welfare recipients who move on and off the system, teetering on the margin between work and welfare; the people who are both working at marginal, low-paying jobs and receiving substantial federal benefits.

It is this group, more than any other, that tests the theories about why people stay on welfare. Mary Manley's life makes it clear that federal welfare policies tug her in the direction of welfare and of working simultaneously. They coax her family toward at least a semblance of financial well-being and they also push her back to the fortnightly security of a welfare check. To understand why the admirable goals of welfare reform are so regularly frustrated or produce unintended consequences, one must first see the world from Mary Manley's vantage point.

We propose, then, for the next few days, to take you into Mary Manley's life and let you confront, as she did, the disastrous summer of 1980. It was a time when she had many choices to make -- choices that seem at first to have been wrong. But to understand them you have to understand that they were bad choices. You have to understand that in her world the apparently huge distinctions between good and bad, progress and failure, risk and security are in reality only small and shabby ones.

Mary Manley's story resembles a soap opera. Like the soap operas on television, it consists of an unending series of impossible dilemmas and looming disasters. And, just like a made-up soap opera, it doesn't have a happy ending.

Michelle Manley put a pot of water on the hot plate in the kitchen. She was 18 years old, a high school graduate, a mother at 15. She wore shorts and a T-shirt. She had her mother's wide-set eyes and unruly, combed-back hair, but she was lighter skinned. She was stubborn, just like her mother, and right now she was angry.

"When I had my son," she said, stalking back and forth in the bare, clean kitchen, "people said, 'You keep him so clean! You're not on welfare! My friend Barbara, you remember her? She went on welfare. And she used to keep her baby so neat. Now, I see her and I say, 'Girl, what happened?' She asking for Bryant's clothes, now. She went down."

The water began to boil and Michelle put in a couple of eggs for Bryant's dinner. "You know where I would like to end up?" she said, eager to change the subject and thus stall her mother. "I would like to have my own house. A nice, big house, married, and working. Really, I would like to go away from Philadelphia. To Jersey. Or Michigan. It's nice and clean there."

Mrs. Manley knew this full well; Michigan was where she had spent the happiest days of her life. There was an old picture in her house taken in her Michigan days.It was out of focus, a snapshot taken at a party, but it showed Mary Manley grinning broadly, her face perfectly smooth, a man next to her.

Now, at 56, her face was deeply creased, although, to her endless pride, she had kept her figure. Her voice was hoarse and tired. She was alone. So if her children used Michigan as a synonym for paradise, it was only because she had often told them it was.

"Those homes!" she said, stirred by the memory.

"They not attached or anything," said Michelle. "They got yards."

"They got barbecues," said Mrs. Manley. "Cars. And all the homes got fireplaces. Every one."

"Dens," said Michelle.

"You got space," said her mother.

The lightning stopped. Mary Manley turned the lights back on. Michelle got Bryant his hard-boiled eggs, and then ran upstairs. She didn't want to talk about welfare any more.

As 1980 was beginning, Mary Manley's family seemed to have reached a sort of pinnacle of the life that can be lived under the welfare system -- a pinnacle at which a family lives decently and has genuine prospects for advancement. For the Manleys, federal policy seemed to be working. They were moving in all the directions that the people in Washington who run their lives consider right -- toward work and education and home ownership and economic advancement.

By summertime, it was falling apart. Mrs. Manley was in danger of losing, if not everything, at least what semblance of comfort and security she had.

Many things converged to threaten Mrs. Manley's well-being, but the event that triggered the crisis was this: Michelle got a job. That meant more cash income for the household. It also converted Mrs. Manley into what is called a "welfare cheater." Her family was making too much money to qualify for federal assistance; her government checks were stopped.

It may seem strange that the loss of government support should have shaken her so badly, but so it did. The reliability of her life, if not its comfort, was inextricably tied in her mind to aid from Washington.

Mrs. Manley's main source of income for the past 11 years had been not welfare but a job as a receptionist at a community center near her home. She took home $221 in wages, twice a month.

But under a state program designed to encourage welfare recipients to find work, she was allowed to deduct from her salary enough money to make her eligible for a welfare check. That was $48.50 twice a month, tax free. Her total annual income, then, was $6,468.

Since 1972, Mrs. Manley also has owned her own home, a moderately sturdy and functional three-bedroom brick row house, thanks to a federal program that subsidizes home ownership for poor people. Her mortgage payment was $125.50 a month. And besides the help with housing, the government also gave her free medical care under the Medicaid program.

The federal government has helped all four of Mrs. Manley's children. The oldest, Debbie, was no longer a part of her mother'ss household, but she lived in an apartment a few blocks away with her daughter, Nikki, supported by a federal welfare check.

Mrs. Manley's oldest son, Earl, who is mentally retarded, was getting $137 a month, tax free, in a federal disability pension. And for most of his life, Earl has attended day-care centers, special schools and camps funded in part by the federal government.

Michelle Manley, at 18, had just begun working as a truck loader, a job that brought home $99.96 a week and that the federal government had found for her. Bryant spent his days in a federally funded day-care center, where he ate federally funded hot lunches.

Michelle's twin brother, Michael, was in his first year at Temple University, thanks in part to a federal Basic Education Opportunity Grant. u

Mary Manley's family -- herself, Earl, Michelle, Michael, and Brayant -- would, if no one in it worked, have an annual tax-free income of about $6,700 from welfare and food stamps. That's how much money poor people have in 1980 in a relatively generous state like Pennsylvania.

With Mrs. Manley and Michelle working, with the welfare and disability checks, and with the money Michelle and Michael occasionally made doing odd jobs, cash was flowing into the Manley household at a rate of about $13,000 a year, most of it earned in wages. And, of course, this was after taxes and did not take into account the value of the free services and subsidies they received.

The Manleys owned two television sets (one broken), a fan, a rusty air conditioning unit, a gas stove, a refrigerator, a washing machine (working), a dryer (broken), a car that hadn't run for years, a new sofa, and a subscription to Ladies Home Journal. They appeared to have become a middle-class family, on their way up in the world and out of the welfare system.

And yet, all the Manleys thought of themselves as poor. As Mrs. Manley put it, "You don't have any money, what else can you be?"

Why was that?

First, while the flow of money into the household was substantial, it was not steady. Michelle was on paper the family's biggest income-producer, but in five months of working she had so far been laid off for two. As her mother saw it, she was certain to be laid off again, perhaps permanently. So while the job brought home an iffy $400 a month, welfare for Michelle and Bryant would bring in a guaranteed $262. It was clear to Mrs. Manley which made more sense.

In addition although neither mother nor daughter talked about it directly, there was another difference between wages and a welfare check. Michelle spent her wages, and Mrs. Manley didn't feel she could lay down the law and claim a share of them. But in the Manleys' world, a welfare check -- no matter whose name the government puts on it -- is socially obligated to the household. A paycheck belongs to the person who earns it.

On one hand, Mrs. Manley resented Michelle -- her stubborness about not going on welfare, her lack of generosity with her own money. "Back in the days when I was coming up," she says "I'd give my father every cent I had. This generation ain't gonna give up money. Very few of them will."

On the other hand, she was proud of Michelle's contrary mood on that rainy night in July, in the way that a mother can be proud of a child's contradiction. She admitted it: "I sure enough can't blame her. She know the way you have to answer all those questions about your life to get a little bit of nothing, on welfare."

Mrs. Manley thought of herself as a common-sensical person who didn't brood or sulk, and it was her practice, when faced with a problem that seemed insoluble, simply to forget about it for the moment and move on to the next problem.

There is never any shortage of problems in her life. There was no shortage now.

She had, over the past year, steadily gotten behind on her bills and now she was in a deep financial hole. The reasons were many, but one of them -- the most recent -- was this: the government, which so kindly had found Michelle a job, had then taken Mrs. Manley's welfare check away. It made sense to the government, but it didn't to Mrs. Manley. It brought forth in her something very close to panic, and made her financial situation even worse.

Being broke was about to have one immediate and terrible consequence. If Mrs. Manley didn't find some money fast, a lot of it, she was going to lose her house, the symbol of everything that was good and decent about her life.