After two months of deliberation and debate, the Montgomery County Council has cut almost half of the country executive's $397,000 request for staffing and expenses to develop services for county youths, the handicapped, the elderly and minorities.

The council voted this week to fund $200,000 for the remainder of this fiscal year, ending June 30, 1979, for the services, again saying they wanted to be cautious about making large appropriations in light of the public calls for spending cuts and the recent estimates that the county may be short of revenues for the next fiscal year.

County Executive James P. Gleason, who has spent much of the past year, along with a special task force, collecting information and testimony on the special problems of youth, the handicapped and minorities, had refused two weeks ago to submit a proposal for a lower appropriation.

But last week, he sent such a proposal to the council accompanied by a strongly critical letter, saying the council had consistently delayed his request for these funds, which was "a vital part" of his budget.

"The council, or perhaps only certain members of it," he said in his letter, "is obviously listening to other voices than the executive's and some I might say pointedly with vested interests of a political nature which are contrary to the objectives (I have). I do not wish to be party to this form of government any longer."

However, after the decision to fund the $200,000 appropriation was made, Gleason said he would look at it and see what could be done with it.

Council President Elizabeth Scull, a long-time advocate of the coordinating and development services, said about the appropriation, "Considering the temper of the times, I'm grateful that these many positions were approved. Obviously we can't do all we intended to do . . . Certainly the positions that have been approved give us a good start."

Under the appropriation, two commissions - one on youth and one on the handicapped - composed of professionals in these fields would be set up. Each commission would have an executive secretary and possibly staff aides, who would be unpaid volunteers.

The funding for the staff - reduced from the number Gleason requested - will go to the following:

an office on minority affairs, which will act as advocate for minorities in the county government.

a person to coordinate and plan drug abuse programs for all ages.

a planning and evaluation staff that will coordinate and review all the county public and private agencies and departments providing human services programs.

additional staff for an expanded volunteer bureau for the county.

The council also approved $358,000 in funds for the county school system's quality integrated education program which is designed to facilitate the school system's integration efforts in selected schools.

But council member and economist Neal Potter cautioned at the council session this week that "neither of the agencies (executive branch and the school system) seems to understand the fiscal crunch upon us . . . We must find ways to economize."

In non-monetary discussion this week, the council gave a vote of approval to an experimental housing subsidy program the county has been given federal funds to test. The program is a new twist on the Section 8 subsidy program, in which renters who qualify can rent apartments, with the landlord's consent, and pay only 25 percent of their income to rent while the federal government picks up the rest.

Under the test program, funds for 50 units will be set aside solely for those eligible people who work in the county but do not live there. The point of the program, according to housing official Pat Heinaman, is to see if there is a market for such a program and if people who work in the county, making moderate incomes, are avoiding living there simply because they cannot afford the county's high price of housing.