President Carter's proposed anti-inflation budget-balancing program is a fiscal and political "hot potato" that urban officials here may toss right back to the President at a very crucial time.
With less than a week to go before the state's Democratic primary, New York City Mayor Edward I. Koch is attacking the President's proposed cuts in general revenue sharing, mass transit, and the possible loss of special welfare aid.
Top aides at City Hall charge that just at a time when the city stands the best chance in the last five years of balancing its budget -- using generally accepted accounting principles and not gimmickry -- the Carter administration is pushing federal budget cuts that would dash this hope.
Proposed federal cutbacks could postpone the city's fiscal recovery -- anticipated in fiscal 1981 by Mayor Koch -- by at least another year, a mayoral aide said. Higher taxes for the city's residents was also a clear possiblity, the aide added.
At a City Hall press conference March 19, Mayor Koch said that as a result of the President's proposed cutbacks in revenue sharing and other urban aid, the city would very likely not be able to balance its fiscal 1981 budget. He said the federal cutbacks could mean new taxes. However, he said he had been told that the President will instruct his economic advisers to prepare new legislation for aid to the cities in greatest need.
The exact cuts in urban aid were not expected to be disclosed until after the March 25 primary here, even though Vice-President Walter Mondale, in an attempt to counter rising criticism in New York City of the new Carter budget policy, told Mayor Koch by telephone March 18 that the Carter administration was doing whatever it could to help the city in its financial plight.
Nevertheless, Mr. Carter could be hurt in the New York State primary as a result of the Koch administration's misgivings about urban aid cuts. In fact, Mayor Koch had scheduled a press conference March 18 to denounce the Carter administration's proposed cuts in city aid but held off at the 11th hour because of Mr. Mondale's persuasion.
The news of the urban aid cuts came only days after Mayor Koch and other prominent politicians strongly criticized the Carter administration's recent vote against Israel in the UN, despite the President's subsequent belated disavowal of the vote as an error in communications.
As Koch aides see it, the city may lose $150 million in aid as a result of the President's anti-inflation plan -- and possibly much more. The mayor's proposed fiscal 1981 city budget of $13.3 billion, which he announced in January , would have been balanced. Now, city figures are thrown off kilter, and the financial recovery could be delayed another year.
Meanwhile, the State of New York, which currently gets $254 million in federal revenue-sharing funds, may see that cut by as much as 75 percent, according to one published report. Gov. Hugh Carey, one of the few top Democratic officials here who has not endorsed President Carter for re-election, was expected to announce his support of the President just prior to the primary. But now close observers say he will not do so in the wake of the proposed federal aid cutbacks.
Senator Kennedy flew into New York March 17 in a lastditch attempt to beat Mr. Carter in a key primary race other than that of the senator's native Massachusetts, where he won big. One poll, the results of which were published last week, showed Senator Kennedy only 10 percentage points behind Mr. Carter, whereas previous samplings had shown him trailing by 20 points.
President Carter, political analysts say, has been losing ground steadily in New York, especially among the nearly 2 million Jewish voters, many of whom have been outraged by the way the administration handled a recent United Nations Security Council vote against Israeli settlements in conquered Arab territory.
Now Senator Kennedy will concentrate not only on the UN vote and the proposed cutbacks in urban aid, but on the need for gun control as well. In the next few days he is expected to visit a New York City policewoman who was shot during a recent Harlem robbery. And the murder by handgun of his friend and former associate, Allard K. Lowenstein, is certain to be mentioned by the senator in this effort.
Mr. Kennedy also is planning extensive forays into the large black and Hispanic communities here, as well as visits to the South Bronx, one of America's worst slums, which was promised significant aid by President Carter nearly three years ago but which remains essentially the same, largely because the aid never materialized.