WHILE PEOPLE are paying attention to the high-profile aspects of the budget fight -- whether to curb Social Security payments, how big an increase to give the Pentagon -- Congress has been going along with the administration's intention of further limiting federal involvement in social programs. Since the need for some of these programs is actually greater than it was four years ago, local governments will have to try to make up the loss. Congress needs to consider that the areas where such losses will be greatest are also likely to be those in which local resources are already most strained.
It seems likely that most of the cuts in domestic programs the Senate Republican budget compromise calls for will be accepted. They range from the phasing out of some programs (revenue sharing, economic and urban development grants, the Job Corps, welfare job assistance and mass transit operating subsidies) to decreases in others (subsidized housing, community and social services, rural assistance, child nutrition and medical aid for low- income families and the elderly and disabled).
Federal Funds Information for States, a data service for state governments, estimates that the cuts would cost state and local governments almost $7 billion next year and would rise to an annual loss of more than $20 billion by 1988. This total does not include extra demands on local institutions that would arise from cutbacks in education, health and other aid given directly to individuals.
Some localities where private or defense industry is booming may find it easy either to make up for the lost services or to do without them. Others may be able to persuade state governments to provide additional help. But as Indiana Gov. Rob Orr told a House subcommittee, despite all the talk about state surpluses last year, few states are feeling flush. Many are trying to make up spending they postponed during the last recession. Others have never recovered from it.
What states and cities need, suggests Princeton professor Richard Nathan, is -- dare we say it? -- a "safety net." He would have Congress divert perhaps a third of the anticipated budget savings into a reserve fund to be distributed only to those areas where distress, measured by above-average unemployment, poverty and other such factors, is greatest. To keep Congress from succumbing to the temptation to waste the money by distributing it too broadly, Mr. Nathan recommends that the distribution formula be left to a commission. It's an idea that Congress at least ought to consider -- if it is going to go ahead with these very painful and consequential cuts in federal programs.