President Reagan's fiscal 1986 budget would have a devastating effect on the ability of cities and towns to provide health care, operate buses and subways, educate children and shelter poor and middle-income families, local officials testified here today.
The first of six field hearings mounted by the Democratic-controlled House Budget Committee provided an opening salvo in what is expected to be a protracted battle over the administration's effort to make massive cuts in domestic programs, while increasing military spending.
If the war of words in Washington often seems abstract in places like New York City, Miami, San Francisco, Lansing, Mich., Irving, Tex., and Atchison, Kan. -- sites of the committee's regional hearings over the next two weeks -- today's testimony was designed to bring the numbers down to earth.
In the process, Democrats hope to build a constituency for what they call a "more balanced" approach to reducing the projected 1986 budget deficit of $180 billion; one that would temper the proposed cuts in social programs and curtail the growth of the Pentagon's budget.
For example, committee members were told that Reagan's budget is likely to:
* Cost New York City more than $1 billion a year, about 5 percent of its budget, including general revenue sharing funds equivalent to half the Fire Department's budget and community development block grants that have financed the rehabilitation of 4,400 dilapidated apartments a year in the South Bronx and other rundown neighborhoods.
* Increase subway and bus fares in New York City by 10 cents to $1 a ride.
* Slash Medicaid, or health care for the poor, by $208 million in New York City, affecting thousands of welfare families, unemployed and disabled people and working poor.
* Increase property taxes in Portland, Maine, by 10 percent to make up for fund cuts in welfare, transit, housing, economic development and revenue sharing.
* Significantly increase evictions and homelessness among low-income families in Suffolk County, Long Island, a relatively prosperous New York suburb with pockets of poverty.
Calling Reagan's budget "an outrageous attack on states and cities," New York Mayor Edward I. Koch said eliminating corporate-tax loopholes, as a Treasury Department plan proposed in November, could raise $22 billion in 1986 and thus eliminate the need for many cuts in social programs.
Corporate taxes, he said, comprised 25 percent of federal tax receipts in the 1950s and 1960s but only 8 percent of the 1986 budget, partly due to the large corporate-tax cuts that Reagan pushed through Congress in 1981.
Koch said the 1986 social program cuts would come on top of $2 billion in federal revenues that New York, the nation's largest city, has lost as a result of federal budget cuts since 1981. "Our poor people are less well fed, less well housed, and there are many more of them since President Reagan took office four years ago," he said.
In New York City, Reagan's 1981 cuts reduced benefits for 50,000 mothers and children on welfare and eliminated benefits for 22,000 others, primarily the working poor, George Gross, the city's Human Resources Commissioner, testified. Delayed cost-of-living increases reduced the purchasing power of food stamps for 1.1 million New York recipients and benefits fell sharply in 120,000 elderly and disabled persons' households in 1983, he said.
Koch called the U.S. housing program "a disgrace." Since 1980, the U.S. housing budget for the poor dropped from $27 billion a year to $11 billion a year. New York City has a waiting list of 170,000 persons for public housing and virtually no vacancies. The city is sheltering up to 18,000 homeless persons a night, triple the number in 1981.
"Yet this year the president is completely wiping out what remains of subsidized housing," Koch said. "What should we do, Mr. President, pitch tents?"
Rep. Delbert L. Latta (R-Ohio) suggested that the city make up for the federal cuts with its reported surplus of $900 million in fiscal year 1986. But Koch denied that the city had a surplus that was "money in the bank," and described it as a budgeting device to carry the city over into the second year of a two-year budget. He said New York has the highest taxes of any U.S. city.
"This budget cuts the core out of the Big Apple," said Rep. Charles E. Schumer (D-N.Y.). "For the average New Yorker, the Reagan proposal will mean higher transit fares, more expensive health care, a continuing decline in rental housing, a cut in school-lunch programs, dramatic cuts in the number of teachers in the New York public school system, and a continuing deterioration in basic sewerage and water-treatment facilities."
Sen. Daniel Patrick Moynihan (D-N.Y.) said that as a result of the Reagan budget's student-loan cuts "three out of every four graduate students in New York will have their funding reduced if not eliminated. Is that their idea of how to build a stronger country?"
Portland, Maine, City Councilor Pamela P. Plumb, testifying on behalf of the National League of Cities, said the impact of the Reagan budget on Portland was typical for small and mid-sized cities. "Our community fails to understand why the president wants to eliminate federal programs that have been so successful such as EDA and UDAG."
Portland used a $6.3 million Economic Development Administration grant to build a fishing pier and Urban Development Action Grants to renovate historic areas and build an industrial park. Both programs would be eliminated under the proposed fiscal year 1986 budget.
Eliminating general revenue sharing, a program of unrestricted funds to local governments, would slash $1.8 million from Portland's operating budget for fire, police and social services and force an increase in property taxes, she said.
"You hear that Americans say they want to get the government off their back," she said. "But we've had hearings neighborhood-by-neighborhood and not a single person has said that. They've asked for more policemen and more firemen and more services."
Separately yesterday, President Reagan in a radio broadcast cited "50 years of failed policies" as the reason for soaring U.S. deficits. He vowed to battle for his budget proposals and other initiatives that he said would reduce the deficit by stimulating economic growth.
"The single best deficit program is an all-out push for economic growth," he said in his weekly address. "Let's make one thing plain at the outset of the new term. We're raring to go."
Reagan contended that some of his past attempts to restrain U.S. spending had been "thwarted" by Congress, and he renewed his call for authority to veto individual items in appropriations bills.