The Reagan administration is planning up to $2.8 billion in new food stamp and child nutrition program cuts in fiscal 1983, sources said yesterday.
The Office of Management and Budget, these sources said, compiled a list of proposed cuts last month for the food stamp, school lunch and breakfast and women-infants-and-children, or WIC, feeding programs ranging from $2.3 billion to $2.8 billion next fiscal year. The White House has approved most of the proposals, sources said.
On another matter, sources said the White House has also decided to drop most of the 150,000 new subsidized housing units for the poor authorized for fiscal 1982 and to provide at most a handful of new ones for fiscal 1983. OMB and the Department of Housing and Urban Development were reported still to be negotiating over the exact numbers.
OMB is apparently willing to allow 17,000 new units of housing for the low-income elderly in fiscal 1982 and 10,000 in fiscal 1983, plus perhaps a few thousand units for the non-elderly poor each year, and no more. The subsidized housing program has been one of the fastest growing in the government, and has become the third largest welfare program, after only Medicaid and food stamps. It has recently been expanding at 200,000 or more new units of all kinds a year.
The food stamp reductions would be on top of substantial cuts already made by Congress at the request of President Reagan earlier this year. President Carter, before leaving office, had estimated that the combined federal feeding programs would cost $17.5 billion in fiscal 1982, but last summer's cuts are expected to reduce that to $14.7 billion and the new requests, if approved by Congress, would cut this further.
News of the proposals came as President Reagan completed a round of major decisions on the fiscal 1983 budget, which is expected to be submitted to Congress Feb. 1. Edwin Dale, spokesman for the OMB, said decision-making is now about nine-tenths completed.
Sources gave this rundown of the OMB's food proposals:
The cuts in food stamps for low-income people proposed by OMB would total anywhere from $1.5 billion to $2 billion in fiscal 1983.
The major change would be an increase in the so-called "benefit reduction rate," or how much a household's stamp allowance goes down as its income goes up. Under current law, a family's maximum possible food stamp allotment is reduced by 30 percent of its net income. The OMB proposal would raise this to 35 percent. In practice, this means, for example, that a family with $300 a month net income, which now gets $143 a month in stamps, would be cut to $128.
Another proposal would reduce benefits by dropping a rule under which 18 percent of a person's gross earnings are excluded in figuring his income for food stamp purposes. This would mean that a working family with $5,000 take-home pay would lose $300 a year in benefits, experts said.
The plan also would eliminate any new applicant who qualifies for less than $10 a month benefits; it would require any fuel aid assistance received by a family to be counted as income, which would mean less stamps, and change the rounding rules in calculation of benefits.
On child nutrition, the OMB plan would save the Treasury about $450 million in fiscal 1983 by cutting out the summer food program, reducing the day-care center feeding program by one-fifth, ending the special milk program even in schools that have no school lunch program, and phasing out over two years the basic cash subsidy (equal to 10.5 cents per meal) that schools receive on meals served to middle-income children. The subsidy was already cut about 15 cents in last summer's legislation.
In letters to OMB director David A. Stockman and White House staff chief James A. Baker III dated Oct. 27 and Oct. 28, Rep. John M. Ashbrook (R-Ohio), Rep. William F. Goodling (R-Pa.), Senate Agriculture Committee Chairman Jesse Helms (R-N.C.), Senate Finance Committee Chairman Robert J. Dole (R-Kan.) and other prominent Republicans objected to the proposed school lunch cut, saying that the so-called subsidy to the middle-income students was actually a "grant in aid to the schools to help defray the cost of the whole program in each school based on total student participation, regardless of income."
Removing the subsidy for the middle-income student, who pays for most of the cost of his lunch, the letters said, would so increase overall school costs that many schools would drop out, thus eliminating the program for needy free students as well. Despite the letters, the OMB proposed eliminating the 10.5 cents in its list of cuts in late November.
There had been rumors that the Agriculture Department made no objections or appeals to any of the food program cuts, but Deputy Secretary Richard E. Lyng said in a telephone interview, "That's not precisely accurate." He said he had talked to a White House task force handling food stamps and as a result, "We didn't get rolled 100 percent. They have not emasculated the food stamp program."
He said he had talked to Stockman about the school lunch cuts and as far as he understood, "It is not yet settled." He declined to give details and the OMB had no comment.
The proposal on the women-infant-children feeding program, in which low-income pregnant women and mothers get vouchers at health clinics to buy prescribed nutritional foods for themselves and their children, would set the WIC appropriation in fiscal 1983 at $650 million, which is $300 million less than Congress appropriated for fiscal 1982, and blend WIC into the existing maternal and child health block grant. It has been approved by the White House.