This paper--the outcome of a conference and subsequent consultations involving a majority of the nation's former Secretaries of Health, Education, and Welfare--recommends the revision of the present program of Aid to Families with Dependent Children. A brief overview of the United States welfare system and a detailed list of eight charges made against the system precede a summary statement of policy objectives for optimum welfare program reform. Proposed changes believed to represent a creative and realistic form of federalism are then offered. The key features of the recommendations include national eligibility standards, national minimum benefit levels, federal funding of those minimum benefit levels, and retention and strengthening of state/local program administration and service delivery. (RH)