The Reagan administration is considering cuts of about $17 billion in fiscal 1982 in programs for the poor, aged, ill and jobless, congressional sources said yesterday.
The proposed reductions, outlined on Capitol Hill this week by the Office of Management and Budget, would affect programs such as college student loans, Social Security, low-income energy assistance, aid to families with dependent children, unemployment compensation, food stamps, child nutrition, Medicaid, and aid to the states for social services.
Congress would have to approve nearly all the cuts and if it did, the action would mean lower income support and services. Ultimate approval would mark a historic reversal in the almost uninterrupted growth of public income maintenance and social service programs. Some, such as Medicaid, would be sharply braked; others, such as public service jobs, would be eliminated.
Sources said the $17 billion isn't a cut from what is being spent this year, but from what human services programs would cost in fiscal 1982 if current eligibility and benefit laws were unchanged. They said the $17 billion may end up as as a minimum for human services cuts, since the figure doesn't include possible cutting of housing aid to the poor and special unemployment benefits for workers made jobless by imports.
The potential cuts are:
Social Security disability insurance would be cut about $600 million in fiscal 1982, as compared with anticipated outlays under current law, by tightening up on administration and providing for reexamination of beneficiaries to see if they are still disabled; by putting a "cap" on the monthly benefits an individual can get if he or she is collecting simultaneously from a number of different programs such as Social Security, veterans' compensation and workmen's compensation, and by denying benefits to those who haven't worked in at least six of the 13 quarter-years before becoming disabled, a tougher "recency of work" standard than now. Annual savings by 1985 were estimated at $1.5 billion.
Social Security student benefits would be phased out over four years and the size of the payments cut, in order to save $700 million in 1982 and $1.7 billion in 1985. The Social Security minimum monthly payment of $122 would be eliminated for present and future beneficiaries for an estimated saving of $1 billion in 1982 and $1.1 billion a year by 1985.
Changes in aid to families with dependent children would save $671 million in 1982 and $845 million a year by 1985. Retrospective accounting, elimination of payments below $10, tougher reporting requirements, inclusion of step-parent income in eligibility determination and limiting deductions for work expenses when determining income of an applicant are contemplated.
Elimination of the federal public service jobs program would save nearly $3.8 billion in fiscal 1982.
Federal outlays for the giant Medicaid program would be "capped" at about $16.3 billion for fiscal 1981 and could rise only 5 percent in fiscal 1982, which would save $1 billion in fiscal 1982 as compared with currently anticipated outlays. Thereafter they could rise only to keep pace with inflation, saving an estimated $5 billion a year by 1985. States would be given broad discretion on how to cut services or eligibility.
Food stamp eligibility would be sharply tightened by lowering income eligibility limits, reducing benefits for children getting school lunch benefits, cutting benefits 35 cents instead of 30 cents for each dollar a recipient earns, and using retrospective accounting.Anticipated savings: $2.6 billion in fiscal 1982, $3.6 billion a year by 1986.
School lunch and child nutrition programs would be cut $990 million in fiscal 1982 and $1.7 billion annually by 1986 by toughening eligibility and federal matching provisions.
Guaranteed loans for college students would be made subject to a needs test, federal interest subsidies would be lowered in order to save $878 million in fiscal 1982 and $2 billion annually by 1985. Basic educational opportunity grants would be cut $150 million a year by tightening income eligibility levels.
Child welfare, low-income energy assistance, the social services grants program and some smaller welfare programs would be combined into a single block grant to the states at 80 percent of what their combined total would otherwise be, for a saving of $1.8 billion in fiscal 1982 and $2 billion in 1985.
The national "trigger" for extending unemployment benefits in every state an extra 13 weeks would be repealed, so that only states which themselves had very high unemployment would provide the extra 13 weeks; this and other changes would save the federal government $2.2 billion in fiscal 1982.
Meanwhile, in another budget development, the State Department said yesterday that it had sent to the Office of Management and Budget its own detailed proposals for foreign aid expenditures, with the hope that State and OMB "will be able to go to the president with a unified position." State objected last week when an OMB memo proposed a 30 percent cut in President Carter's $8 billion fiscal 1982 foreign aid budget authority request, OMB Director David Stockman agreed later to pare back the cut.