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Democrats, Educators Critical Of Reagan's Program Tradeoff

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Washington--President Ronald Reagan's sweeping proposal to exchange education, school lunch, and other programs with the states, which he described last week on national television, has drawn mixed reaction from members of Congress and association leaders.

The executive director of the Washington-based National Association of Counties, Bernard F. Hillenbrand, called the President's plan "a stunning victory" for local control.

Albert Shanker, president of the American Federation of Teachers, claimed the plan would turn the programs into a "50-state hodgepodge."

'Shift and Shaft' Program

Representative Ted S. Weiss, Democrat of New York and a member of the Committee on Education and Labor, characterized the plan as a "shift and shaft" program. He claimed it "shifted the burden and shafted the recipients."

Other Congressional Democrats, who spoke to reporters after the Presidential address before a joint session of Congress, expressed wariness toward the radical proposal that would begin in 1984 to shift to the states responsibility for 40 federal categorical programs, food stamps, and welfare--along with some federal funds to support them.

The "tradeoff" plan would shift to the states all elementary- and secondary-education programs except Title I and education of the handicapped. In addition, states would take over all federally sponsored child-nutrition programs.

"To turn these programs back to the states is to turn us back to the 1920's," said Senator Daniel Patrick Moynihan, Democrat of New York.

The speech included a reference to eliminating the Education Department, and the Administration has drawn up a legislative proposal to turn the department into a foundation. (See story on this page.)

The programs are part of the President's "new federalism" program, in which states and the federal government would eliminate the current practice of sharing financial responsibility for many national programs. The President's proposal, under which the federal government would assume of total responsibility for the Medicaid program by 1984, was praised by conservative Republicans.

"The sooner we shift these matters back to the states, the better off we're going to be," said Senator Orrin G. Hatch, Republican of Utah and chairman of the Committee on Labor and Human Resources.

But a moderate Republican Senator, Robert T. Stafford of Vermont, warned that although he found the plan "acceptable philosophically," he was concerned that it would not "ensure fairness and equity for the states."

Senator Stafford, the chairman of the Senate education subcommittee, also said he was interested in learning the details of the shift in education programs. "The federal role in access to and equality in education programs is a crucial one," he said.

The President provided few details about the plan last week, and Administration officials at a briefing held before the speech said the precise dollar amounts involved in the exchange, as well as the mix of 40 programs that would "devolve" to the states, had not been decided.

They said the plan would be phased in over a period of eight years. Beginning in 1984, the federal government would take the Medicaid program, while states would assume responsibility for Aid to Families with Dependent Children and food stamps.

Between that year and fiscal 1991, according to the plan, the federal government would set up a "grassroots trust fund," that would channel money to the states to offset the cost of state assumption of the 40 federal programs. The fund would be made up of revenues from federal excise taxes on alcohol, tobacco, gasoline, and telephone service.

The trust fund would be eliminated at the end of the eight-year period, and the federal government would relinquish its excise taxes to enable states to levy such taxes themselves.

Administration officials last week characterized the proposed exchange as "gradual"--permitting states to accept slowly the additional responsibility.

The officials also asserted that states would receive added dollar benefits from the program because costs of the Medicaid program are growing faster than the costs of welfare and food stamps. In addition, they said the federal trust fund would be used to "equalize gains and losses among states" for the exchange programs.

Nevertheless, the speech provoked speculation about whether the program would result in wide variations in the services provided by rich and poor states, a situation that existed before President Lyndon B. Johnson's Great Society program expanded the federal role.

Although an estimate of the program's effect on the state of New Jersey, reported last week in The New York Times, said that the first phase of the exchange could yield a surplus of as much as $20 million for the state, other states are considered less likely to fare that well.

A. Craig Phillips, the state superintendent of education in North Carolina, said, "The message Tuesday night was a clear reaffirmation that this Administration is getting out of the education business. This will be a blow to public education because, unfortunately, the children who need help the most will be those hurt the most."

"The idea would concern anyone who believes there's a national interest in such things as the health of children. The President is saying there's no federal role in any of these areas," said John F. Jennings, counsel to the House Committee on Education and Labor.

"You've got to wonder whether he just wants to lay the groundwork for elimination of these programs. States won't be required to continue the programs. And states have an unequal ability to pay. The poorer states wouldn't be able to tax themselves enough to make up for the federal programs," Mr. Jennings said.

Rural, southern states, many of them with "dry" counties where the imposition of an alcohol excise tax would generate no revenue, may have problems making up for the loss of federal funds, Mr. Jennings said.

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