The Reagan administration is considering further cuts in the food stamp program that would reduce its cost by up to one sixth or about $2 billion in fiscal 1983.
Also under consideration is a plan to reduce the amount of cash given each month to welfare mothers who also receive so-called in-kind benefits in the form of food stamps, housing assistance and help in paying fuel bills. At present these in-kind benefits are not counted as income in calculating how much cash assistance a household is entitled to under the program of Aid to Families with Dependent Children. Under the new proposal, they would be.
A shift of this kind in the AFDC benefit formula could chop between $1.3 billion and $2.1 billion in 1983 from the federal government's $6.5 billion share of AFDC costs, and the state share would fall also. One official said even so that this idea will eventually be dropped, but others said it is still alive. The counting of in-kind benefits as if they were income has long been a favored notion of Reagan aides Martin Anderson and Robert B. Carleson.
The food stamp and AFDC cuts are among a number under study in so-called entitlement or basic federal benefit programs. The White House now plans to present these to Congress in January, as part of its next broad effort to hold down future budget deficits. These cuts would be on top of the more than $1 billion each that Congress cut from food stamps and Aid to Families with Dependent Children last summer at President Reagan's request.
The current set of White House option papers also includes a proposal to save about $300 million a year by forcing the children of elderly poor people in nursing homes to pick up part of the nursing home costs now paid by Medicaid, the federal-state medical program for the poor. Long-term care of the elderly in nursing homes now eats up almost half the entire cost of the $32 billion program.
The cuts being considered in the food stamp program, which has 22.4 million beneficiaries, include the following:
Increasing by 5 percent a special reduction factor that cuts people's food stamp allotments if they have any cash income. A family of four with $300 a month countable income now gets $143 a month in stamps; under the change it would get $128. Expected saving to the government in 1983 is about $850 million.
Reducing food stamps if the family gets government help in paying fuel bills under the low-income energy assistance program. Saving: $350 million.
Rounding down benefit amounts, forcing recipients to make an active job search at the time they apply for benefits, eliminating benefits under $10 per month, and further reducing the so-called earnings "disregard," which is the amount of an applicant's earned income not counted in determining food stamp eligibility because it is considered to cover work expenses. The disregard has just been reduced from 20 percent of earned income to 18 percent and this proposal would cut it further. Savings on these provisions: about $480 million.
Changing the periodic cost-of-living increase that raises the amount of food stamps received as food prices go up. Savings: $900 million.
All these possible cuts are in addition to a large batch of Medicaid and Medicare proposals, totalling $4.2 billion, and a handful of other cash welfare changes totalling about $600 million that have already been publicly reported.
Sources stressed that the president has made no final decisions yet. Most of the options that he finally chooses probably won't be publicly proposed until he presents his fiscal 1983 budget next January.
According to one report, the administration is now also looking at what amounts to a Medicare hospital cost-containment proposal in place of some of its other hospital cost-cut options.
Under the latest proposal, the administration would simply calculate how much it wants to spend on Medicare and then limit its reimbursements to hospitals for care of Medicare patients so they don't exceed the ceiling. Each hospital, in effect, would end up with reimbursements a bit below what it would otherwise receive under existing law.
Meanwhile, Robert Maffin of the National Association of Housing and Redevelopment Officials, declared Tuesday that if Congress eliminates $148 million in supplemental funds for public housing operating subsidies, as the administration has proposed, many local public housing agencies will go bankrupt and many thousands of public housing units will be permanently lost to the nation's housing stock due to deterioration.