An article yesterday on President Reagan's fiscal 1987 budget quoted the Center on Budget and Policy Priorities as saying the plan would cut low-income programs by $23 billion over five years. They would be cut $23 billion in the fifth year alone, according to the center. Also, a chart accompanying the article said the president's budget would eliminate housing vouchers. Rather, they would replace other housing programs that would be eliminated. In addition, one of the chart's headings, "Make Responsibility of States," was misleading because states would continue receiving federal funds, although in most cases at lower levels.
Loretta Montgomery is one of the survivors of President Reagan's war against what he calls wasteful federal spending.
Four years ago, when Montgomery was entering medical school at the University of California at San Francisco, she applied for a federal grant for first-year students. But budget cuts engineered by Reagan had left UCSF with only one such grant in 1982, and Montgomery, who is single, was not the neediest student in the class.
She is managing to become a doctor anyway. "I am perfectly willing to take on the responsibility of borrowing and paying it back," she said, "as long as money is available to borrow." But at the age of 27, she will graduate June 1 with a debt of $40,000.
Many like Montgomery have survived Reagan's fiscal policies by borrowing, going to other sources or going without. For them, the Reagan spending cuts have produced far less devastation than critics foresaw five years ago.
"Many of the cuts were exaggerated by liberals who wanted to say 'how awful' and by conservatives who wanted to say 'look what we've done,' " said Richard P. Nathan, a professor at Princeton University.
"Overall, the cuts have not been dramatic," said Gerald H. Miller, executive director of the National Association of State Budget Officers. "It's been a grinding down, a little bit less every year."
On accounting sheets, the cuts in some areas have been severe indeed. The three major spending categories -- defense, interest on the debt and direct benefit payments to individuals (programs such as Social Security) -- have been wholly or largely off-limits to budget cutters. That means the great bulk of Reagan's cuts have been absorbed by the "all other spending" category. Spending on these programs -- from foreign aid to student aid, sewer construction to subsidized housing construction -- has declined by 15.2 percent, after adjustment for inflation, since 1981. And Reagan's new budget would extract another 14 percent of what's left.
But as Reagan had hoped, other sources of funds materialized when the federal government pulled back. In some cases, the funds came from increases in state and local taxes at the same time the president was reducing federal tax rates.
"There is no question," said John L. Palmer of the Urban Institute in Washington, "that state and local governments have offset some of the losses, and they have raised taxes to do it."
Tennessee state Rep. John Bragg, the outgoing president of the National Council of State Legislatures, said that in his state, "We've reduced state payrolls . . . neglected parks and roads and cut back support of cultural programs."
Nancy Kull, director of student aid at the University of California at San Francisco health professions campus, said, "The trend in student aid is to have medical students rely more on loans than grants. Philosophically, I agree, but in real situations it sometimes seems very rigid." The Association of American Medical Colleges said, "We are seeing richer students because of the tuition problems."
"There is a little bit of good in austerity," said Nathan. "It has put a lot of pressure on state and local government to improve. Real welfare reform is taking place. Schools have tougher standards and merit pay. Hospitals are controlling costs. That's real reform in health, education and welfare."
To be sure, cities appear harder hit than states, although cities, too, have offset some of the losses. The poor were most badly hurt by cutbacks in 1981, according to the Urban Institute, but Congress restored some of the cuts. "Families at the top of the income distribution have gained substantially; those in the bottom two-fifths have actually lost all the ground they had gained over the two preceding decades," the institute concluded in 1984.
Congress has not liked Reagan's budgets for several years, and the plan for fiscal 1987 is no exception. Congressional reluctance to act on Reagan's hit lists is cited as the principal reason budget cuts haven't been more noticeable.
Office of Management and Budget statistics, however, suggest that Reagan has gotten more than expected. "The president asks for 180 percent of what he really wants," said former domestic policy adviser Martin Anderson. "Congress offers 142 percent and Reagan reluctantly says okay."
Cuts that sounded astounding in 1981 are now talked of seriously. "If you repeat something horrible over and over it begins to take on the aura of the commonplace," said Barry Zigas, president of the National Low Income Housing Coalition.
A look at four federal social programs shows how they coped -- by shifting costs to beneficiaries, by shifting some costs to the states, by muddling through or by waiting out a lag in the impact while old commitments were kept.
Student loan programs are complicated examples of where some costs have been transferred from government to better-off students and their families.
When Reagan took office, Congress had already begun to sour on medical school programs that had mushroomed in the 1960s, when communities were advertising for doctors and shortages were predicted in specialties such as family practice.
In 1981, the Bureau of Health Professions got $175.8 million for its array of health training programs. Last year the figure was $145.5 million. Part of that money is earmarked for exceptional financial need scholarships for students in their first year of medical, nursing or other health schools. That has gone from $28 million to $6.6 million nationwide.
Medical school tuition, on average, has more than doubled.
Students have made up the difference by borrowing. Since 1981 the average indebtedness of medical students who borrow (only 15 percent do not) rose from $19,700 to $29,900, according to a survey by the Association of American Medical Colleges. A survey conducted for the Health and Human Services Department found that debt has little effect on a doctor's specialty.
Loretta Montgomery hasn't changed her plans to go into family practice rather than a more lucrative specialty that would help pay back her loans more quickly. "I already made that decision before I started," she said.
Childhood immunization is a program that received almost twice as much money this year as when Reagan came into office, and yet is still cited as a victim of cutbacks under the Reagan administration. Simply put, inflation, more than Reagan cutbacks, reduced the number of children served by the federal government.
The immunization program also is an example of how states have helped as money from Washington proved inadequate. Federal immunization payments went from $24.1 million in 1981 to $42.4 million in 1985. During the same period, costs of vaccinating a single child against diphtheria, whooping cough, tetanus and polio went from $4.85 to $23.26.
Congressional staffers say some states made up the difference by requiring parents to pay more for each shot.
Washington state received $540,000 for immunization last year -- an extra $250,000 to help absorb the huge rise in vaccine costs. This year the money was back to its usual $300,000. Only months into the fiscal year, the state's immunization budget is gone, and the state health department has asked for a $600,000 supplemental appropriation from the state legislature.
"We used to be able to send children who hadn't been immunized over to the state health department to get their shots," said Dr. Edgar Marcuse, medical director of outpatients at Children's Orthopedic Hospital and Medical Center in Seattle. "Now we either have to absorb the costs or let them go unimmunized."
Barbara Bavins, a nurse practitioner at Children's clinic, said that in dealing with an unimmunized child, "We would still go ahead and give the shots. We have never turned down anybody yet."
Soon after the introduction of Head Start, the federal government set out to "follow through" Head Start children to the third grade to ensure that preschool gains were not lost in the regular classroom. Teachers were trained and parents hired as classroom aides.
By the time Reagan took office, the follow-through budget was down to $70 million. In 1986 it was $7.5 million, although the Head Start program itself was continuing at about $1.1 billion a year.
"The first to go was evaluation," said Dr. Gene Ramp, chairman of the National Follow Through Association. "Next was parents in the classroom. Once we had probably 200 projects, now we have 65, just a shell of their former selves."
Housing programs are a different example of why Reagan administration budget cuts have had less impact than expected, because of what might be called budget lag.
Zigas, of the National Low Income Housing Coalition, said aid has been cut from "$30 billion in the last Carter budget to $10 billion." The average wait for low-cost housing is two years, he said, and the "tremendous cut is a major contributing factor in homelessness."
But the number of families who received housing assistance under the Housing and Urban Development Department rose during the Reagan administration from 3.5 million to 4.4 million, according to the Congressional Budget Office.
This stems from the lag between the time money is authorized for housing units and the time the units are built. About two-thirds of the new families that received HUD housing assistance last year reflected commitments made before 1982.