President Reagan's plan to transfer $47 billion in federal programs to the states gets mixed reviews from Washington business leaders, but raises little concern at this point that it will cut the federal work force here.
Local businessmen who commented on the president's State of the Union address Tuesday night focused more on the problem of federal spending and the high budget deficits than on the cost to the Washington-area economy of eliminating large programs and, perhaps, the personnel who manage them.
Under Reagan's "New Federalism" plan, states would take over food stamps and Aid to Families with Dependent Children as well as about 40 federal grant programs in education, transportation and social services.
"I believe the government closer to the people is more efficient and responsive to the people's needs, so I applaud his steps," said Stephen D. Harlan, managing partner of Peat, Marwick & Mitchell and president of the Greater Washington Board of Trade. "I think in the long run the states will be better off."
Also approving of the proposal was Don J. Smith, vice president and division manager here for Safeway Stores. "I feel with the states administering the program it will be better run and take the fraud out," he remarked. But he added that he hopes the federal government will set guidelines before turning the food stamps program over to states.
But R. Robert Linowes, partner of the law firm of Linowes and Blocher, said he believes the transfer would cause serious problems.
"I think the concept of moving the cost of the programs to the states is unrealistic," he asserted. "Most states and cities are overburdened with debt and find it very difficult to operate on a balanced budget."
Richard England, president of Hechinger Co., said the transfer is "running away from the real issue, which is that government spending needs to be cut."
England was one of several businessmen disappointed that Reagan insists on keeping his tax cuts in place in the face of a deficit approaching $100 billion. "It would seem to me a more logical first step to balance the budget and then cut taxes," he said. "I haven't met anyone strongly defending the tax cut at this time."
"I'd have liked to have seen $30 billion or $40 billion in taxes added back to his program," said John J. Byrne, chairman of Geico Corp., who said he generally endorsed Reagan's direction. "The thing I'm the most concerned about is what the perception of those budget deficits are doing to the capital markets."
Insurance executive Byrne, who headed a board of trade task force on the impact of federal employment cuts on the local economy, said he was concerned about sharp new cuts in federal employment.