The Heritage Foundation has recommended against any long-term federal spending to help the homeless, and suggested the problem could be handled better at the local level through improvements in mental health facilities and housing policies.

The report by the Washington-based research institute said a federal homelessness program "would simply throw money at the symptoms, while creating a new federal bureaucracy."

A draft of the report prepared by policy analyst S. Anna Kondratas said "the root causes of increasing homelessness are not unemployment and budget cuts, which city and state officials, in their own self-interest, often cite as paramount . . . . The deinstitutionalization of the mentally ill and the loss of low-income housing stock due to urban development, gentrification and rent control, as well as problems of rent affordability resulting from an inflationary economy -- developments of the 1960s and 1970s -- are the chief causes of the homelessness of the early 1980s."

Mitch Snyder, a member of the Washington-based Community for Creative Non-Violence, which specializes in helping the homeless, called the report's conclusion "absolutely ridiculous."

"What they are saying is the federal government has no responsibility for helping a huge number of destitute people in the streets, that it is purely a state and local problem and they've got better things to do, like making guns," Snyder said. Cindy Bogner, a researcher for the National Coalition for the Homeless in New York, said her organization feels that the federal government should provide money to help localties relieve mental health and housing problems.

The report said a review of previous studies indicated that most homeless were on the streets because of mental illness or drug and alcohol abuse, not because of the recession or federal budget cuts.

It said a much-criticized Housing and Urban Development Department report last year provided "the most reliable estimate" of the number of homeless in the United States -- 250,000 to 350,000. It said no study had verified estimates of 2 million to 3 million homeless used by groups like Snyder's. The report criticized the media for giving credence to the higher numbers.

The report said large numbers of mentally ill were left without care when the 1963 Community Mental Health Centers Act reduced the populations of large state mental institutions, and not enough community-based centers were established to take up the slack. A solution, the report said, would be a federal requirement that states "provide for adequate mental health care in communities before releasing them from state institutions."

Homelessness was further aggravated, the report said, by a decline in numbers of cheap housing units because of rent control, which discouraged builders from constructing more rental units, and construction of expensive townhouses and office buildings in inner cities.