In 1997, the District of Columbia enacted legislation implementing provisions of the 1996 federal welfare law, which includes a 5-year lifetime limit on welfare benefits. Families will begin reaching that limit in 2002. The District's welfare reform experience has been similar to that of other states. Welfare caseloads have fallen substantially, and a relatively high percentage of former welfare recipients are working. However, significant numbers of families have not left welfare and are approaching time limits. The District helps families move to employment and uses the federal law's flexibility to continue providing cash assistance to families who reach the time limit but do not earn sufficient income. This report describes: the District's welfare caseload trends; circumstances of former welfare recipients; the fact that the District is not unique in having many families nearing time limits; services the District provides to help long-term recipients move to work; what happens to families reaching the time limits; and how federal law gives states flexibility over time limit policies. As a large city, the District faces larger challenges than average in helping needy families move from welfare to work. Its welfare reform is hampered by delayed and incomplete implementation of some welfare reform components. (SM)