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The single greatest challenge facing the new Republican Congress is welfare reform. It was the single greatest challenge facing President Clinton, too, but he simply ducked the issue, preferring instead to try to bestow upon the American people a new health care system.

The Republicans, however, are split on welfare. House Republicans are ready to exploit their Election-Day mandate and enact the radical reform they promised in their Contract with America. But some Republican senators and governors are saying: Hold it. They want the issue punted back to the states.

House Republicans would impose very strict welfare reforms on the states. For example: No welfare to unwed mothers under 18. No welfare for mothers who do not establish their baby’s paternity. No welfare for anyone after five years on the dole.

Now, governors, especially Republican governors, do not like mandates coming from Washington. They don’t like welfare mandates and they don’t like anti-welfare mandates. Meeting in triumph this week in Williamsburg, Va., they argued that welfare and a host of other federal programs are best sent back to them. Like Gov. Tommy Thompson, who has been quite successful in reducing Wisconsin’s welfare rolls even with current federal strictures, they resent having to come “to Washington on bended knee to kiss the ring” of the welfare bureaucrats before they are allowed to experiment according to their local conditions.

Sen. Nancy Kassebaum (R-Kan.), incoming chairman of the Senate Labor and Human Resources Committee, seems to agree. She would engineer a swap: the states would take over welfare in return for Washington taking over Medicaid.

The case for the Kassebaum-governors position is pragmatic-the states are closer to the people, can aggressively experiment and thus can do a better job-but it is principled as well. The principle is federalism: The federal government should not, as it has done since the Great Society, seize responsibility for everything from welfare mandates to midnight basketball. It should restrict its activities to those things that must be national (defense, currency, interstate commerce, etc.) and let the states look after the rest: schools and crime and social work.

This thinking, however, runs counter to the “Personal Responsibility Act” that will be introduced in the House early next year. It is radical welfare reform but hardly a model of federalism. True, it does consolidate some programs (nutrition, for example) for the states to administer. But many of its directives (no welfare for unwed minor mothers, for example) are delivered nearly as highhandedly as those Great Society directives it seeks to reverse. It gets on with the business of reforming welfare right now, rather than devolving it to the states and letting them handle it piecemeal 50 which ways.

Who is right? There is much to be said for defederalizing welfare. But it is a mistake to do so now. Now is the time for sweeping federal welfare reform. For four reasons:

1. Federalism is a high democratic principle but it is not the only principle. The restoration of individual responsibility is at least as important a hallmark of a democratic social order.

2. Conservatives have just received a startlingly powerful mandate to enact real reform now. It would be a tragic mistake to squander the historic opportunity to change the welfare system by simply punting the issue back to the states where it faces an uncertain fate.

3. Just over 30 years ago, the federal government created not just a welfare system but a deeply ingrained welfare culture. It now has the moral responsibility to begin the undoing of what it created. It cannot blithely turn to the states and say: OK. We have screwed this up beyond our fixing. Now it is your problem.

4. Federal action is more public and declarative. When Washington speaks, the effect is not just to change policy but to change mores. It is Washington that established the idea that able-bodied people who do not work are entitled to be supported by the taxes of people who do work-simply by virtue of having children out of wedlock that they cannot support and whose fathers will not support them.

This perversion of rights and responsibilities is at the core of the welfare rot. The beginning of the end of such a system is delegitimizing the welfare ethic itself. And only Congress, speaking for the nation, can do that. Only Congress can de-entitle this perverse entitlement.

Once that is done, we can have all the federalism the Founders intended. Congress can then gradually, fully devolve the program back to the states where they can adjust and tailor as their needs dictate. But now is not the time.

The Republican split on welfare can be breached by the simple expedient of seeing the House position and the Kassebaum-governors position as not contradictory but sequential. Fix first, then punt.