President Reagan's plan to change the way federal grants are handled could eliminate the need for thousands of government jobs and force layoffs of 30 percent to 50 percent in agencies handling specialized categorial grants to states. Hardest hit under the proposal to shift to block grants would be the Department of Health and Human Services and Department of Education.
If Congress goes along with the bloc grants idea -- in which Uncle Sam would give state-local governments big bloc grants to be divided up at the local level -- agencies that now process the smaller grants, write regulations and monitor programs could be forced to RIF many staffers if they could not find other work for them, or if their personnel ceilings are cut.
Reagan's budget goes to Congress this week. Agencies soon will get allotment letters that will spell out new, in most cases lower, job ceilings than those proposed by President Carter in his final budget.
In his Friday afternoon press conference, Reagan said his budget would reduce fiscal year 1981 federal employment 33,000 below the level targeted by Carter. Once agencies get allotment letters -- they start going out March 10 -- they can figure out what their new personnel ceilings are for the current 1981 fiscal year that ends Sept. 30. Those that are below the new ceilings (and some are because of Carter and Reagan job freezes) could actually be in a position to lift their own hiring freeze. Those that are above targets, however, will have to keep the hiring lid on and may have to resort to reductions-in-force. Defense is the exception. It is due to get more civilian workers this year and in upcoming fiscal 1982. Most Defense agencies lifted their hiring freeze last month.
Last week officials of the Alcohol Drug Abuse and Mental Health Administration (ADAMHA) advised employes that if the worst comes to pass they could be forced to cut employment by as much as 50 percent. ADAMHA has just over 1,800 workers, most of them in the metro Washington area. ADAMHA is heavily involved in categorical grants.
Federal workers at the Nuclear Regulatory Agency, Department of Energy and Department of Education also are hearing RIF talk. The Office of Personnel Management will have to cut its staff involved in intergovernmental exchange programs.
Key federal officials say that, in most cases, the first big federal RIFs won't hit until sometime in August. The magnitude of the RIFs will depend on what Congress does with the Reagan budget and on the success of the current freeze in reducing employment.