IT’S THE ONE ISSUE that just won’t go away. During the campaign, everyone from Bill Clinton to Newt Gingrich took credit for passing a major welfare-reform bill. Now, with the election behind them, that much touted piece of legislation turns out to be just another round in the never-ending political and ideological battle over how to help the poorest of the poor, the 12.8 million Americans who–until recently–could count on a federal guarantee of financial assistance.

On Capitol Hill liberals and conservatives agree on one thing: that the legislation the president signed in August is–as Clinton himself described it at the time–“far from perfect.” Although it ended Washington’s 60-year guarantee of assistance, the law doesn’t spell out a clear alternative.

Under pressure from Democratic liberals, Clinton is looking at possible overhauls. The most dramatic would be establishing his own signature program, called Welfare to Work, which is designed to help the most hard-core, long-term aid recipients. The Clintonites haven’t figured out what the program will look like yet, but a confidential working paper, prepared by the Office of Management and Budget and obtained by NEWSWEEK, lays out a number of options for what could be a $3 billion program. Among them: targeting funds at 150 municipalities and limiting the money to people who have been on welfare for more than 18 months. The Clintonites seem less interested in what congressional Democrats continue to demand: more money for food stamps and benefits to immigrants, which were cut substantially in the reform package.

There’s still lots of room for new ideas, apparently. Earlier this month National Economic Council chair Laura Tyson and Domestic Policy Adviser Carol Rasco asked cabinet officials to come up with “bold and provocative” suggestions for transforming the welfare system. But a subsequent brainstorming session in the Roosevelt Room of the White House led nowhere, according to one insider.

Some conservatives in Congress want to make the law even tougher–perhaps by making the time limits on welfare eligibility retroactive. That’s unlikely to happen. But many Republicans–including moderates Clinton hoped to win over to whatever he eventually proposes–are content, for now, to let the law stand. “We should hold a steady course,” says Delaware Rep. Michael Castle, a leading voice on welfare for Republican moderates. “Unless something is obviously and completely wrong, we should let it lie.”

Ironically, while the Beltway pols are feuding, Washington is no longer the center of action for welfare reform. With the end of federal guarantees, states and municipalities now have much greater responsibility. Indeed, politicians as diverse as New York Gov. George Pataki, a Republican, and Washington Mayor Marion Barry are calling for dramatic restructuring of their respective welfare programs–a worrisome harbinger, say some liberals, of a “race to the bottom” in benefits to the poor. If they’re right, it’s a race no one will win.

CARLA KOEHL

THERE’S NOTHING QUITE like a crushing defeat to make a team find focus. Liberal child-advocacy groups, still reeling from the blow of welfare reform, are now aiming to win as many concessions as possible on the next 50 battlegrounds: the state legislatures. And that means using better marketing strategies, including well-timed press releases, opinion polls–and a united front.

Their new, slicker act debuted last week, when four groups, including the Child Care Action Campaign and the Children’s Defense Fund, joined together to announce their latest reports, which show what they see as a weak state commitment to working families. The combined studies attracted more attention– and newspaper space–than many individual efforts in the past. “There’s a growing recognition that they have to do a lot more to get their message across,” says Sheila Kamerman, a social policy professor at Columbia University’s School of Social Work and a supporter of more governmental aid for families.

The old methods were mostly ad hoc. “The typical campaign was usually something the director of the group came up with while they were mowing their lawn,” says Susan Bales, head of children’s issues for Washington’s Benton Foundation, which is doing more polling these days for children’s advocates. Next month Benton plans to release a poll commissioned by six children’s groups, showing where child advocates went wrong with the public in the