Back during the Carter administration, a handful of agencies set out to give the public more input into federal decision-making.

Any group that felt its point of view was not going to be adequately represented at agency rule-making hearings could hire an attorney and expert witnesses and get the government to pick up the tab.

Not any more.

Since President Reagan took office, these public-compensation programs have come under attack on three fronts: Congress has cut off their funding, Reagan's appointees have stopped implementing them, and a non-profit law firm with strong ties to the administration filed a successful suit to put some out of business permanently.

The result: nearly all the compensation programs that existed when Reagan took office have been shut down.

Financially strapped consumer groups, the main beneficiaries, claim the Reagan policy has made it much tougher for them to compete head-on with well-financed business groups."It costs us money to participate in these proceedings and we simply don't have the money that industry does," says Khristine Hall, an attorney for the Environmental Defense Fund, which collected $1,810 in compensation payments during 1979. "It's not going to make us go under, but it's not going to encourage our participation either."

Administration officials, however, maintain the compensation programs were unnecessary and wasted tax money.

Critics and supporters agree that it was the aggressive program at the Federal Trade Commission that infuriated business groups and Congress the most, setting the stage for the abolition drive.

"The FTC was the only agency that really got its program off the ground," explained Washington attorney Bruce Terris, who frequently represented consumer groups at FTC hearings. "It changed the whole dynamics of federal rule-making by putting consumer groups on the same level as industry. Its extinction was the product of its success, not its failure. It simply worked too well."

During 1979-80, the FTC paid $351,049 to 54 witnesses for testimony about regulations on children's television programming, over-the-counter drugs, used cars, funeral homes, children's hearing aids, mobile homes and home insulation. The largest fees went to the Consumers Union Committee for Children's Television ($36,225), the National Consumers League ($35,605) and the Community Nutrition Institute ($33,368).

"It was a waste of money," says Timothy J. Muris, the new director of FTC's consumer protection office. "The money was spent largely on groups that already supported rules being proposed by the FTC staff. It wasn't really needed. We feel our staff adequately represents the public."

FTC Commissioner Michael Pertschuk, who chaired the commission during the Carter administration, disagrees, saying consumer advocates often kept the staff from bending to pressure from industry and made it possible for commissioners to hear "a real, full-scale debate for the first time. It was an enormously effective program that enriched the rule-making process."

FTC Chairman James C. Miller III has asked Congress to repeal the FTC's statutory authority for compensating the public. Congress refused to appropriate any funds for it this year and Miller has said he doesn't want any next year either.

The Consumer Product Safety Commission was the only other agency that got its compensation program off the ground. In 1979 and 1980, it paid $26,033 to 44 witnesses for testimony about power mowers, upholstered furniture, asbestos and urea foam insulation. Because of congressional action and a recent lawsuit, however, the commission is now restricted to compensating public witnesses only in hearings involving the Consumer Product Safety Act; most of the claims it has paid in the past involved other laws.

The Environmental Protection Agency and the Federal Energy Regulatory Commission were also authorized by Congress to pay public witnesses, but neither has in recent years. The EPA created a test program in 1977 and paid one claim, but later dropped the program, according to a study by the General Accounting Office. No funds were ever authorized for the FERC, the GAO said..

Four other federal agencies developed public participation programs on their own during the Carter administration, citing a 1976 opinion by the comptroller general that Congress had given them "implied authority" to do so.

The Commerce Department's National Oceanic and Atmospheric Administration has paid $8,050 in compensation since 1978, officials said, and the Food and Drug Administration, $7,721 since 1979. The Agriculture Department and the Federal Deposit Insurance Corp., which regulates banks, also created programs, but never paid any claims.

Last year, the Pacific Legal Foundation, a conservative legal advocacy group, filed a lawsuit against the FDA, arguing the agency had no authority to compensate witnesses and attorneys. A federal district court said it had "implied authority," but the federal appeals court in Richmond reversed that decision. Based on that ruling, the FDA and NOAA said last month that they would stop. USDA is expected to do the same thing soon, and the foundation plans to file a petition with the FDIC soon if it doesn't end its program.

"We filed the suit because we do not believe federal agencies should exceed their statutory authority," explained Eileen White, the foundation attorney who argued the case. "The government should stick to the laws it has."