But he said that his welfare and Medicaid experts had concluded that Ohio could handle the transition from entitlements to block grants.

Many Republicans wanted to simply convert the welfare programs to block grants, or lump sums of money, and turn them over to the states.

The state can probably turn to block grants only if Republican plans to change Federal law for Medicaid, welfare and other programs are enacted.

Mr. Dole has been working to broker a compromise around a measure that would change most welfare programs to block grants.

The House-passed bill would convert those programs to block grants.

House Republicans are firmly committed to block grants.

They depend on public funding for day care, which is optional through social services block grants.

Mr. Packwood said the switch to block grants would save money for the Federal Government.

Mr. Clinton signed the law giving states block grants and primacy over welfare after two earlier vetoes.

Republicans said the change to block grants would not cut the program but would make it more efficient and reduce the paperwork required by Federal regulations.