(Excerpted from "Governing America: An Insider's Report from the White House and the Cabinet," copyright 1981 by Joseph A. Calafano Jr.; published by Simon & Schuster Inc. All rights reserved.)

Welfare reform was, along with "a government as decent and competent as the American people," a constant commitment of Jimmy Carter's candidacy, but it was an impossible, eventually abandoned dream of Jimmy Carter's presidency.

Candidate Carter, all throughout 1976, repeated the promise -- "if I'm elected president, you're going to have welfare reform next year" -- and he always drew satisfying applause, whoever his audience: Chic Manhattan liberals, street blacks in Detroit, Southern Baptist churchgoers, white hardhats on construction sites, conservative Midwest farmers, or the nation's governors in conference.

Cleaning up the welfare mess" was the best ear-of-the-listener in Carter's campaign lexicon.

During two years of campaigning for the presidency, Jimmy Carter never had to say precisely what welfare reform meant to him. bellish the chameleon commitment in order to help people hear what they were listening for: in one speech, stressing simplification; in another, a "uniform national payment, varying according to cost-of-living differences between communities"; in yet another, and another, eliminating "waste," ending the "present antiwork, antifamily" system, stopping "fraud," or relieving local communities and the states of suffocating financial burdens.

It was enough that candidate Carter promised to overhaul welfare from top to bottom and replace it with a system that "encourages work and encourages family life and reflects both the competence and compassion of the American people."

President Carter did not intended, to make the unpleasant choices forced by limited resources, by interest groups, by congressionl politics. And, eventually, he had to send a 136-page bill to the six committees of the Congress that claimed jurisdiction over some part of the legislation, and to constituencies poised to receive what they thought they had heard during the campaign.

The story of how those decisions were made in the new administration, and of what became of them, and of the new president's coming to the realization that welfare reform was easier to articulate than deliver on, is a parable of modern American politics. It was a tragi-comedy of naivete, of guarding institutional interests, and of clashing personalities.

Evans both within and beyond the administration's control brought me on May 2, 1977, to call welfare reform "the Middle East of domestic politics."

The president wanted a complete overhaul of our nation's welfare system to be one of the first proposals he sent to Congress. He made that clear to me during our meetings at the Smith Bagley plantation on St. Simons Islands, Ga, in December, 1976.

I assumed, though I did not state it to Carter explicity, that welfare reform would cost more money, so I told reporters there that I thought reform might have to await economic recovery.

The following day at a press conference, Carter rode over my statement: He would complete a design for basic welfare reform and send it to the Congress in 1977. What he did not say to the press -- and what he did not say to me until a briefing in March 1977 -- was that he hoped to have comprehensive welfare reform at no additional cost to the federal budget.

With all the different concerns and the contradictory solutions and passions, both on and off Capitol Hill, almost everyone agreed: Leaving politics aside, it was clear that welfare needed to be overhauled.

The five basic parts of the system paid out almost $30 billion a year when Carter took office in 1977.

The Aid to Families with Dependent Children (AFDC) program was paying $6.2 billion in federal and $5.3 billion in state funds to 11.4 million recipients -- one American in 20. More than 90 percent of those recipients were mothers (3 million) and children under the age of 18 (8 million). The rest were fathers, principally in such states as New York, California, and Wisconsin, which paid benefits to intact families.

The Supplemental Security Income Program (SSI) paid $5.3 billion in federal funds and almost $2 billion in state funds to 4.4 million aged, blind, and disabled people. Some were on Social Security, but most were ineligible for it.

The Food Stamp Program paid $5.6 billion in federal funds and about $300 million in state funds to 17.2 million people for stamps that could be used to purchase food. (Unlike the AFDC program, food stamps are indexed to inflation; as a result, it is the fastest-growing welfare program, likely to exceed $10 billion in 1981.)

The Earned Income Tax Credit provided $1.3 billion to 20 million families with an employed member who did not earn enough to pay income tax, and received funds through the income tax system.

State and local General Assistance provided $1.2 billion to almost 1 million people who did not fit into any of the other categories. Most of this money went to poor single persons and to childless couples in the big industrial states.

Welfare needed reform, and I had a mandate from the president to put a plan together. But what was best and what was possible were substantively difficult and politically treacherous questions to answer. My only guidance from the president was to develop "a comprehensive plan that was to develop "a comprehensive plan that was pro-work and pro-family."

To keep faith with his speeches and the Democratic platform, the plan had to provide some fiscal relief for states and localities. And Carter wanted a plan fast.

Where was I to begin? Welfare was so encrusted with myth, demagoguery, regional politics, and racial prejudice that I thought I must start with a major consultation and education effort.

The day after I was sworn in, I announced that we would try to develop a reform program working with other federal agencies, key Senate and House committee staffers, governors, mayors, and county and state legislators. h

The Welfare Reform Consulting Group was to be chaired by Henry Aaron, the HEW assistant secretary for planning and evaluation and an expert on income maintenance. I had recruited him from the Brookings Institution with welfare reform very much in mind.

The first sense of the frustration and trouble that might lie ahead came as I attempted to educate myself and prepare to brief the president.

I asked Henry Arron and his experts to give me a crash lecture series on income maintenance programs, their history, the problems of equity, and the economic and political shoals on which prior programs had foundered.

Once or twice a week for several weeks, I sat for hours in the early evening, as Aaron and his able deputies Mike Barth and John Todd lectured. eMy education faltered as other business interrupted our sessions, but also because abstract theories and intellectual disputes did not deal with the regional, local, partisan, legislative, and special-interest politics.

By late March, we were ready for our first presidential briefing and Carter called it for Friday, March 25, in the Cabinet Room.

I wanted to give him a picture of the existing system and of the problems involved in shaping a reform proposal. I hoped to move back the May 1 target date Carter had set for announcement of the plan, and to get a sense of the president's tilt on which government programs to include, how and at what level to set a minimum national standard for payment, whether we should cover intact as well as one-parent families, and whether he was prepared to guarantee employable recipients special public service jobs, if no jobs were available in the private or regular public sector.

Really, I was hoping to discover what Jimmy Carter meant by welfare reform.

The president sat in his usual place at the middle of the long Cabinet table. I stood opposite him with my charts, pointer in hand. The reaction at the meeting, and thereafter, to any mention of programs that were not already administered by HEW provided ample evidence to support the old proposition: In Washington, where one stands depends on where one sits.

Labor Secretary Ray Marshall saw no reason to include any part of the Labor Department's unemployment compensation program, and for interminable hours during the spring and summer of 1977 the difficulty of integrating jobs and cash assistance was compounded in turf-dominated discussion between Marshall's assistant Arnold Packer and Aaron and his staff.

Agriculture Secretary Bob Bergland maneuvered to keep the food stamp program in his department, despite the fact that, at the recommendation of the administration, the stamps were soon to be issued free with no copayment required, and would thus be virtually the same as money.

The mere mention of veterans pensions and rent supplements sent their bureaucratic constitutencies to war. At one point, Carter stopped me to make sure he understood that the veterans pension payments were, like welfare, related to income. When I said yes, he shook his head.

Powell, seated behind him to his left, remarked, "Let's remember what happened when we took on the veterans in Georgia."

Someone else brought up the reaction of the veterans groups to Carter's amnesty for Vietnam draft-evaders.

I knew then, and so did everyone else in the room, that we would not include this program in the reform package. Indeed, off a leak from that briefing. Senate Majority Whip Alan Cranston of California and House Veterans Committee Chairman Ray Roberts locked the fence securely around all veterans programs with a tough letter to the president demanding that the administration keep my hands off and not tarnish veterans with the welfare stigma.

Carter agreed. He cautioned me that there was no point in angering veterans by calling attention to the fact that their pensions, like the welfare payments, were tested according to need.

I had a sense that the intrinsic complexity of the welfare system was distasteful to Carter. He wanted a "simplified program," and I could feel his frustration as the realization came over him that no such reform was possible.

When the briefing ended, Carter reiterated his desire for comprehensive reform, and said that he would not decide any of the consolidation issues with their prickly turf problems at this time. He was interested in simplifying the system, and he wanted to put people on welfare in jobs, and to eliminate fraud. He did recognize, however, that the most we could accomplish by early May was to announce a set of principles that would guide the development of a detailed program.

Although Carter had administered the Georgia AFDC program, I don't think anyone had ever exposed him to the intricacy and inequity of the welfare system in this depth on a national scale, and he seemed to recoil from it.

"If you could start over, what would you do?" he asked me. I wasn't sure. "Well," he said, "you take the amount of money now being spent on welfare programs and redesign the whole system for scatch."

"It will cost money to get a better system," I said. "I'll design a new system, but there'll be some cost."

Carter gazed at me as though I had missed his point. "I want a welfare reform program that doesn't cost anything more," he said.

"Mr. President, I don't think it's possible to put together any program like that which makes sense or has a chance of passing," I responded.

The president's eyes were cold, his voice was soft but stern. "I want you to give me a comprehensive program at no additional cost."

I protested.

After some discussion, though, he was still insisting on a no-additional-cost comprehensive reform. At the very end of the meeting, Carter acceded to my request to submit additional cost items in order of their priority -- "one billion dollars at a time."

Henry Aaron was despondent. We had been working on the assumption that there would be funds for reform. "It's impossible; what he wants is impossible," Aaron kept repeating as we drove back to HEW.

When candidate Carter had said "welfare reform," Aaron and his planners had heard "decent standard of living for poor people."

The briefing on the zero-cost operations was again in the Cabinet Room, at 1 p.m. April 11. I had charts outlining three plans: one concentrated on consolidating cash assistance programs; the other two were variations that emphasized jobs. For each of the plans, I tried to focus the president's attention on the inequities and political pitfalls of pursuing reform at zero cost.

Carter didn't enjoy the briefing. He questioned me impatiently, probing to see whether I had truly tried to honor his request for zero-cost alternatives. sHe reacted almost petulantly to my pointing out the problems of such an approach.

When I had reviewed desirable reforms that required additional expenditures, I concluded, "At zero cost, it may be that no one would recommend any more than tinkering to improve program administration and creating a hundred thousand public service jobs for the poor."

The president was almost scowling, but I felt I had to finish even though be clearly did not want to hear it. "If you want a politically viable welfare reform plan that helps poor people, then we need to face some of the difficulties of creating so many jobs for this population."

Carter was getting angry, so I rushed through the last sentence. "Mr. President, I don't think any of these plans is adequate unless we increase spending, and I am asking you to approve that."

Carter sat there, and asked querulously: "At zero cost, is the present system the best one?"

Aaron said something about not being able to ignore prior history. Eizenstat started to remind Carter of his "promise to [New York City Mayor] Abe Beame to reduce the local share of costs."

Carter ignored them. His eyes were indignantly locked on mine. "As you've explained it, we should just leave the system as it is. We don't have $5 billion to $10 billion to put in a new system. Why don't we just say the hell with it!"

I tried to duck the assault. "If we don't have money now, we can always use Russell Long's approach of demonstration programs, holding costly changes for later years."

When Carter got around to talking about jobs, he was not facing up to the realities of the welfare population -- mostly illiterate, unskilled teen-age mothers and 30- to 40-year old grandmothers.

I recognized the importance of providing jobs, but expressed doubts about creating 1.4 million jobs for the population in any short time frame. "It will take several years." Charlie Schultze, the president's top economic adviser, revealed even stronger misgivings about creating over 1 million jobs. "I just don't think you can do it," he said.

Carter glowered. "Why? Sixty percent of the people who work in Plains [Ga.] are high school drop-outs. They work."

Henry Aaron repeated the point: "It will be very difficult to create jobs for such an illiterate and unskilled population."

The president would have none of it. "People on my farm work machinery, drive fork lifts, put herbicide on peanut plants, which has to be done right to kill the bugs and not the plants. And when it comes time to cash their paychecks, they sign with an X."

Schultze began to speak, but Carter continued, "If we created one million or so jobs, Plains would have to provide three jobs, that's all. There are three jobs that need to be done in Plains."

"My town in Minnesota would have to find only eight or nine," said Vice President Mondale.

Schultze's face crinkled with incredulity at the comments. "But what about Abe Beame? He needs at least 150,000!"

Back at HEW, i wondered why Carter had been so irritable and angry at the briefing. Perhaps he was sensing, as I was, the dilemma we faced: With zero cost, there could be no welfare reform without making some draconain proposals; however, each dollar of additional cost subjected the reform plan to attack as giving more money to people on welfare.

If that's what's bothering him, then it's imperative, I thought, to focus on the anti-fraud and waste aspects of the plan that improved efficiency, and on work incentives.

On Sunday, July 31, we sent Carter the final decision memo. Then on Saturday, Aug. 6, in Plains, Carter announced his comprehensive reform of the "antiwork and antifamily" welfare program that "would not be incompatible with the dream to balance the budget by 1981." He called his plan the Program for Better Jobs and Income, a name he selected himself.

On June 6, the citizens of California, in revolt against government spending, voted overwhelmingly for Proposition 13, a proposal to slash state property taxes.

The next day, as I was heading to the speaker of the House's office, Tom Foley, chairman of the Agriculture Committee, stopped me in the hall outside the House floor. "Joe, you've got to bury that damn welfare bill. With this vote in California, these guys will destroy it on the floor and the president will suffer a humiliating defeat."

As I continued walking through the Rayburn Room where members meet constituents off the floor, I knew Foley was right. A few minutes later, the speaker confirmed it for all of us. Proposition 13 had put the final nail in the coffin of welfare reform for 1978.

On June 22, I acknowledged the realities of the calendar and politics in a public statement that also called attention to wide areas of agreement, and to the enormous effort involved in the "search for a more sensible, more just welfare system: I am hopeful that we can take advantage of that effort next year."

There was an attempt to revive a modest reform program in 1979. Working closely with Congressman Al Ullman of Oregon, chairman of the Ways and Means Committee, and James Corman of California, chairman of the special welfare reform subcommittee, who were by now far more important than Carter to the reform effort, we developed a plan and submitted it to the president in late 1978.

The proposal elicited from Carter a request that we consult with "interested parties." After much delay, consulation, and minor massaging by departmental staffs and executive office aides, Carter, months later, on May 15, 1979, approved going forward with a $5.7 billion reform package that set a national minimum payment, covered intact families, cashed out food stamps for the aged, blind, and disabled, increased the earned income tax credit, and funded a modest special jobs program.

But the president had lost his appetite for welfare reform. He was increasingly engaged with his own reelection, and he was concerned about his posture vis-a-vis Sen. Kennedy on national health insurance. The welfare program was there now to help defend his left flank, not to mount an offensive.

None of the hoopla that energized the Plains unveiling of Carter's comprehensive welfare reform plan in 1977 attended the announcement on May 23, 1979.

Ray Marshall, Stu Eizenstat and I unfolded the more modest proposal in the Executive Office Building across from the West Wing of the White House to a scattering of reporters and weary staff. Carter didn't make an appearance.

In his written message to the Congress, the president said, with no apparent irony, "No legislative struggle had provided so much hopeful rhetoric and so much disappointment and frustration."

The cash assistance reform bill, costing $2.7 billion of the $5.7 billion package, sailed through the public assistance subcommittee just before I left HEW. It passed the full House by a 222-to-184 vote on Nov. 7, 1979.

But in election year 1980, with budget-balancing, recession, inflation, and foreign affairs dominating the national and political agenda, the Senate had no interest in welfare reform and Carter had no desire to stir up any.

Welfare reform was once again dead.