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O.M.B. Plan Now Said 'Moot'

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Washington--Within hours after President Reagan told William J. Bennett that he was the choice for education's top post, Mr. Reagan presided over a Cabinet meeting at which the Office of Management and Budget offered a general plan to dismantle the Education Department.

An Administration official said the President adjourned the meeting before the plan--one of several items on an agenda that included the proposed reorganization of several federal agencies--could be discussed.

The official, who attended the meeting, said, however, that the President's letter last week to Senator Orrin G. Hatch, Republican of Utah, stating his intention not to abolish the department "at this time" made the omb proposals moot.

The draft "Talking Paper on Reor-ganization Ideas for the Second Term" proposed to:

"Transfer educational grants to [the] Treasury [Department] or leave [the] bulk of programs in an office or agency without Cabinet rank." These funding programs, the proposal noted, "would first have to be legislatively converted to a strict formula block grant (like Revenue Sharing)."

"Transfer Rehabilitation Services and Special Institutions" to the Department of Health and Human Services."

"Transfer [the National Center for] Educational Statistics to Bureau of Census (or new statistical agency)."

These proposals, omb conceded, would face three major obstacles: Congressional opposition; opposition from "special interest groups"; and a "complicated transfer" of functions.--jh

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