Stung by a sudden political furor, the Reagan administration yesterday rescinded an order reducing welfare benefits for elderly, blind and disabled people receiving hot meals, blankets, shelter and other free aid from charitable groups.
Health and Human Services Secretary Otis R. Bowen announced that the order would be revoked immediately with the expectation that Congress soon will approve long-term legislation banning such cuts in welfare benefits.
"It was never our intention that these most fragile of Americans be harmed by this lapse in the legislative process and none will be," Bowen said.
The order, which took effect Oct. 1 but was never publicly announced, applied to the estimated 4.3 million Americans who receive monthly government checks under the Supplemental Security Income program. Most have little or no other income and many are unable to provide for themselves.
The order required that noncash assistance from churches and other private, nonprofit charitable organizations be assessed at market value, counted as income and deducted dollar for dollar from SSI payments.
Maximum federal benefits under the SSI program are $340 a month for individuals and $510 monthly for couples. According to one estimate, the new Social Security policy would have resulted in cuts in monthly welfare benefits of as much as $113 for individuals and $170 for couples.
The law that had exempted charitable aid since May 1983 expired Sept. 30, but administration critics said Congress had made clear its intention to extend the exemption soon.
Legislation to do this was approved Thursday by the House Ways and Means Committee and yesterday by the Senate Finance Committee. Early floor action is expected in both chambers.
The administration acted after disclosure of the Social Security Administration's order in yesterday's New York Times. The report prompted protests from members of Congress that the order was "an absolute outrage" and "terminal sleaze."