Reagan administration budgetmakers have overruled Education Secretary Terrel H. Bell and will ask Congress to let $4.6 billion in federal funds that now go mainly to poor and handicapped children be spent in the future for whatever educational purposes state and local authorities choose.
The Reagan budget plan announced Wednesday also would do away specifically with longstanding rules that bar school districts from substituting federal aid for local spending on these children.
An Education Department official said these proposals, if approved by Congress, would transform and in effect eliminate many federal programs set up to help "target populations" of disadvantaged children during the Johnson administration.
"The programs are being wiped out and strings are being removed from the aid," said Tom Skelly, the department's assistant director for budget review. "It's a radical change from existing programs."
Republicans for years have advocated merger of what they regard as narrow-purpose federal programs in education and other domestic fields into broad block grants to the states and localities, partly as a way of lessening federal control.
Several such block grants were proposed in the Nixon administration, including one, unsuccessfully, in education. But President Nixon would have preserved broad federal control by insisting that fixed shares of federal aid continue to be spent on disadvantaged and other groups of children.
Under President Reagan's more far-reaching plan, the federal government would be little more than a conduit for revenues raised by its tax system and channeled directly to state and local authorities.
The decision to do away with a federal say in the spending of the education assistance was made by David A. Stockman, director of the Office of Management and Budget, according to two sources. These sources said Bell had wanted to continue the federal programs in some form, but was overruled.
Bell's initial proposal called for the consolidation of 57 federal programs into block grants, with the new grant total much smaller than previous spending on all the programs combined.
However, Bell's proposal would have required that "monies made available through the block grants be used only for the activities and services in one or more federally defined categories."
The plan Reagan delivered to Congress Wednesday kept the spending cuts and block grant approach but deleted this language. It also deleted a longstanding requirement that the federal funds "supplement rather than supplant" local funding, a provision that civil rights and other groups fought for in the 1960s to ensure that the extra money would be added to what already was being spent for the schooling of disadvantaged children.
In the plan released Wednesday, the Reagan administration said the federal role in education is "to supply necessary resources, not to specify in excruciating detail what must be done with these resources . . . .There will be no endless Byzantine squabbles over myriad accounting regulations that aid bureaucrats, not children."
School and civil rights groups and their supporters in Congress were gearing up already to fight the Reagan proposal. Without the protective language proposed by Bell, this opposition is expected to become even more vociferous.
Included in the consolidation of federal money that would be rolled into a $4.6 billion block grant to local school districts is $137 million previously earmarked for bilingual education.Thus, the proposal could mobilize some Hispanic leaders if it appears that local districts might choose not to allocate the funds to bilingual education.
Bell reportedly argued strongly against the lumping in of this money with the block grants, preferring that funds be earmarked for bilingual instruction. He has continued to make his case with Stockman and at Cabinet meetings even after Reagan's speech Wednesday night, sources said yesterday.
Under the plan cleared by Stockman the $4.6 billion block grant to school districts would be made up of the bilingual moeny, $2.8 billion now allocated to low-income children under Title I of the Elementary and Secondary Education Act, nearly $1 billion of grants that now go to handicapped children programs, and smaller amounts for adult education and school improvement.
At this stage officials expect to allocate the grants according to a state or district's number of disadvantaged or handicapped children, the present formula. However, there would be no further requirement that any of the aid be spent in educating these children.
One fear voiced yesterday by August Steinhilber of the National School Boards Association was that the removal of federal sanctions "strengthens the political forces who want to cut taxes." This is because school districts, to qualify for federal aid under the old system, have to demonstrate that their spending per pupil had not slackened. Now this stricture would be gone.
"This whole plan virtually invites local governments to spend less on schools attended by the poor or handicapped," a congressional aide said.