Congress and the Carter administration have both chosen to ignore provisions of a 1978 law calling for massive expansion of the number of public service jobs whenever unemployment tops seven percent. Instead, to the dismay of many liberal groups, countercyclical public service job funds have been sliced away as part of the budget balancing drive.

According to the nonbinding statement of intent in that legislation, the government should be providing -- with unemployment close to eight percent -- at least one million countercyclical public service jobs at a cost of more than $9 billion. The number of such jobs actually will drop from about 200,000 at the end of last year to 50,000 in October and will cost about $1.4 billion next year.

Whatever anyone's intent may have been two years ago, the administration has no present plans to expand public service employment -- even though Secretary of Labor Ray Marshall recently called it, "The most effective and least inflationary way to create jobs, particularly in a recession."

In fact, obeying another congressional mandate in the 1978 bill that extended the Comprehensive Employment and Training Act (CETA) -- that the benefits flow almost entirely to the poor and unemployed -- makes rapid expansion of public service employment all but impossible.

When President Carter chose such an expansion of CETA jobs in 1977 as one way to cut unemployment quickly, new job slots were added at rates up to 60,000 a month, until more than 400,000 additional persons had been put to work.

But hewing to tighter eligibility standards put in effect last year, as well as lower ceilings on how much a CETA worker can be paid, would limit any expansion today to about 20,000 jobs a month, according to Charles Knapp, deputy assistant secretary of labor for employment and training administration.

During the expansion three years ago, some state and local governments treated CETA money as a form of revenue sharing. They simply switched some employes from one payroll to another and supplemented the CETA wage from their own funds so that the employes were making what they were before.

Such actions, along with highly publicized charges of fraud and abuse in various parts of the nation, soured many former CETA backers on its virtues as a tool with which to fight recession -- whatever that statement of intent may have said. The emphasis in the 1978 CETA extension lay elsewhere.

Secretary Marshall last year explained the new focus this way:

"The new CETA will target our efforts to assure that we provide jobs and training to those who really need it. The new CETA will work in partnership with business and industry so that our jobs program goes where the jobs are -- the private sector. The new CETA will include new initiatives to greatly improve management. We want to be sure that we can deliver more jobs and training for every dollar invested in CETA by American taxpayers. And finally, we renew our pledge to crack down on fraud and abuse."

Since Marshall made those remarks, his department has been "trying to move the system into an era of modern management," while at the same time incorporating the "philosophical changes needed to move much closer to the private sector," assistant secretary Arnold Packer says. In the view even of some CETA critics, that effort is bearing fruit.

By the beginning of fiscal 1981 in October, more than 95 percent of the people enrolled in CETA are expected to be from the ranks of the poor and the unemployed. Declares Packer, "We are serving the people Congress wants us to serve."

A major experiment involving private business, called the Private Sector Initiative program, is under way, as are other new programs such as one helping women on welfare find jobs that has been more successful than anyone had dared hope.

Meanwhile, the Labor Department is providing greatly increased management advice to the local organizations that manage the actual work and training program, the so-called prime sponsors. However, Washington is also making increased demands on the prime sponsors for financial accountability and for more information about the people enrolled in CETA and whether the experience helps them.

Previously, the test of performance by a prime sponsor essentially was how many CETA workers got nonsubsidized jobs when their CETA training or work was over. But that alone was not a good guide, because in some cases prime sponsors tended to select only the more employable applicants in the first place to boost placement statistics later. And a placement indicates nothing about whether someone may have kept the job only a week or two.

Developing a test of performance is difficult. "We have been working for more than a year to see what the bottom line should be," Packer said, "but we still don't have performance standards."

Nor are all of the new management controls in place, though they apparently are on the way. For instance, all of the regional CETA administrators are now getting more prompt policy advice which means that they can give the prime sponsors correct information rather than their own varying interpretations as in the past. When a program changes as often as CETA has, that is no small matter.

One objective, Knapp said, has been "To make sure the 'primes' understand the policy even if they do not like them." Knapp also said decisions are being made in Washington as quickly as possible, in recognition of the fact that in the past needed policy choices were "left to fester" rather than resolved.

There are about 470 prime sponsors across the country, generally with their controlling boards of directors headed by a top local government official, such as a mayor or county executive. The prime sponsors in turn, have contracts with about 30,000 schools, nonprofit groups and private businesses to provide the actual training, work experience or, in some cases, remedial education or other personal assistance for an enrollee. Altogether, about 200,000 people are involved in running the CETA system, Knapp said.

Because of the rapid changes over the years -- such as the big antirecession expansion in 1977 when pursuit of economic goals swamped the training aspects of the program -- Knapp says that today, "We are dealing with a very fragile system with a lot of burned-out people."

Along with the countercyclical public service jobs, there are 200,000 job slots for work with state and local governments and private, nonprofit organizations under a socalled structural public service authorization.

Unlike the countercyclical jobs, these must involve entry-level work. To be eligible, enrollees must have been unemployed for somewhat longer than for the countercyclical jobs. (Persons on welfare can qualify for either.)

The biggest difference in the two programs, however, is that in 1981 at least 20 percent of the structural public service jobs money must be spent on training people rather than just paying their wages.

The administration had intended that 250,000 job slots be available in 1980 under this part of CETA. Providing them has taken more money per job than expected, however, so that only 200,000 slots were available. In 1981, the administration will try again to reach the 250,000 level, which would off-set the reduction in countercyclical jobs. Nevertheless, that would leave the total number of intended public service jobs at 400,000, down from the 450,000 goal for this year despite a big jump in unemployment.

CETA is an umbrella for many other programs besides public service employment. Perhaps persons will be getting training under a wide variety of other CETA programs involving vocational education in classroom settings, on the job training, "work experience" or a combination of several of these approaches.

An additional one million temporary jobs will be provided for use under the annual summer jobs program, also part of CETA.

Because of the new private sector initiative program, virtually every prime sponsor now has a private industry council to give it advice on what the sponsor should be doing to give CETA enrollees training and experience that will meet manpower needs in the area, and therefore make it easier for that enrollee to get a job.

In some cases the industry councils, which must have a majority of their membership drawn from private business, have begun to operate highly successful training programs of their own. In Springfield, Mass., for instance, a training program has been so successful, it has helped persuade new businesses to locate in the area.

But how successful any job training program can be in a time of deep recession and high unemployment is open to question. With former employes laid off and hoping for a call back to work or with other well-skilled, experienced workers applying for jobs, it is doubly hard for CETA trainees to find jobs. They usually would not have been in the program in the first place had they not had some disadvantage that made it hard for them to get jobs even when unemployment was low.

That is one reason some liberal groups are particularly upset at the decision to reduce the number of countercyclical public service jobs. For example, Mort Sklar of the Center for Community Change at Catholic University, complained the cutbacks will hit the poor, minorities and women hardest since in the best of times they face barriers to employment. And Sklar adds, "It's not just the loss of jobs, but also the loss of community services."

But the legacy of fraud and abuse in 1977 lingers on even though careful audits may well keep it in check in the future. Should the administration change its mind and seek to expand public service employment to reduce the number of jobless during the recession, it is doubtful whether Congress would go along, say Capitol Hill sources.