President Reagan is considering a change in his New Federalism proposal that would combine 30 to 40 domestic programs -- ranging from highway construction to child nutrition -- into two or three major block grants to the states, a White House official said yesterday.
Richard S. Williamson, Reagan's adviser on intergovernmental affairs, said these "megablock" grants would be turned over to state and local governments, in most cases along with federal tax money to pay for them.
But he said some of the grants eventually would be phased out, as Reagan originally proposed, leaving each state free to drop or continue the programs at its expense.
Williamson told a meeting of the National Conference of State Legislatures here that this was an effort to simplify Reagan's initial plan, which he said was too complicated. Administration officials are still working on the other part of the plan, a federal takeover of Medicaid in exchange for state assumption of welfare costs.
Several state legislators expressed concern that the administration might then reduce these big grants in the same way it cut block grants by 30 percent last year. Many state and local officials said they intend to concentrate more on imminent budget cuts than on debating the details of New Federalism.
Sen. David H. Pryor (D-Ark.) told the group that Reagan's plan is "dead in the water" as far as Congress is concerned. "We have too many fires to put out to be thinking about New Federalism," he said later. "It's an idea whose time has not come." But Williamson said he was "quite optimistic" the White House would produce a final plan that Congress could enact next year.
Reagan also gave awards yesterday to 10 mayors for making the best use of community development block grants to attract private investment. One recipient, Mayor Frank Duci of Schenectady, N.Y., complained that while the White House was praising his use of these community grants, its budget office has proposed to cut the $3.45 billion program by $330 million next year.
Another award winner, New York Mayor Edward I. Koch, said, "We can't even go a tenth of the distance that has to be covered to provide heat and all essential services that poor people rely on from the federal government."