Federal impact aid and loans for middle-income college students came out winners in a damage-control game in Congress yesterday as House Democrats reshuffled their spending cuts to fend off another budget blitz by President Reagan.
The tactic forced Republicans to reassess their plan to introduce a substitute for the $37 billion in cuts approved by the Democratic-run House committees, although Minority Leader Robert H. Michel (R-Ill.) said an effort to win approval of the administration's block grant proposals and some further spending shifts was still highly likely.
House Republicans appear to be under great pressure from the administration to make this effort in behalf of several of its spending proposals Congress has still not approved and its battered idea of consolidating many existing programs into block grants to the states, with few strings attached.
But Democrats on the House Education and Labor Committee undercut support for an across-the-board GOP substitute, which would include block grants, by withdrawing their most provocative proposals for cuts. The administration had used some of these in ridiculing as unrealistic the Democrats' alternative for reaching Reagan's budget-cutting targets.
The committee agreed on a 26-to-6 vote to restore about half the money it cut earlier from the impact aid program. It also agreed to eliminate a $25,000 family income for receipt of government-guaranteed college student loans.
The committee had previously voted to eliminate totally the impact aid program, which provides more than $800 million a year to school districts serving children of federal employers, such as those in the Washington area. The Senate voted $200 million for impact aid, limiting it only to the most heavily "impacted" districts. The new House plan, costing $414.6 million, would provide scaled-back subsidies covering children of all government workers, which would give Washington-area school systems about half what they're getting this year.
The committee had also voted earlier to restrict loans to families earning $25,000 or less a year, which would have knocked about 1 million recipients off the loan rolls. The Senate would only make more affluent students prove a need for loans. The new House proposal would eliminate any means test, while slightly increasing a new assessment fee for loans that both houses are proposing 4 percent by the House and 5 percent by the Senate. b
Michel acknowledged the committee's new proposals would make a full substitute more difficult to pass. But he indicated the administration wants at least "some modifications" including block grants, which the House committees rejected and Senate committees approved only in diluted form.
Michel said no decision on the substitute will be made until after the Budget Committee acts on the cuts. The committee approved them by voice vote last night but will not recommend procedures for floor action until today.
Education and Labor's decision to restore $1.75 billion for a variety of popular social programs, largely at the expense of the once-huge public service jobs program, amounted to a retreat for the Democrats. But it was also a damage-control operation.
By including the most popular features of the looming Republican substitute, the committee Democrats hoped to head it off and thereby avoid having to swallow other GOP ideas, including block grants.
"This is an effort to head off block grants," said Rep. John M. Ashbrook (R-Ohio), ranking Republican on the committee. "As a combatant I might concede they probably made a step in that direction."
In addition to $250 million for student loans and $414.6 million for impact aid, the committee added back $205.5 million for Head Start programs, $102 million for vocational education, $400 million for educating the poor, $130.5 million for educating the handicapped, $141.2 million for feeding for the elderly, $88.6 million for elderly employment and $19.3 million for the foster grandparents program championed by the president's wife.
To offset these additions, the committee cut a total of $1.57 billion, including $1 billion from public service jobs, $150 million from child nutrition, $119 million from emergency school aid and $125 million from college loans (increasing the proposed new assessment for loans from 3 1/2 to 4 percent).
Because the restorations exceeded the new cuts, the committee wound up with about $183 million less in cuts than it approved earlier, although it appeared to be in the general range of its $10 billion target for cuts.
Most of the restorations reflect Reagan's proposals, including the meals-for-the-elderly example he cited Tuesday in denouncing the Democrats during a news conference.
But they were also cuts that the Democrats planned to eliminate by amendments on the House floor -- a strategy that fell apart when the Republicans served notice that they, too, wanted a chance to rearrange the cuts on the floor. To close off the Republicans, the Democrats had to close off themselves as well.
"We're trying to make the best of a rotten situation that is being forced on us by the Reagan administration," Rep. Peter A. Peyser (D-N.Y.) remarked.