Share this story
Close X
Switch to Desktop Site


President Reagan's new budget proposes reducing slightly the percentage of US government resources devoted to social programs. Activities that directly aid people - education, health programs, social-security and civil-service pensions, food stamps, welfare, and unemployment compensation - accounted for 53 percent of the budget in 1981. Next year, under the administration's just-released fiscal 1984 budget, social spending's slice of the federal pie would shrink to 50 percent. After taking inflation into account, the amount of money spent on social programs, $424 billion, shows a similar small decline from 1983.

But all social programs are not suffering equally. Spending for social security and medicare/medicaid will rise, though the White House is proposing major reforms to slow the growth of these huge programs.

About these ads

Other social programs, mere midgets compared with the giant income security twins, would thus lose large chunks of their budgets under the Reagan plan. Child nutrition block grants, for instance, would get 15 percent less money in ' 84 than in '83.

Highlights of proposed social spending changes:

The big two: social security and medicare/medicaid. Taken together, social security and medicare/medicaid will spend about $253 billion this year - over 60 percent of the social program budget.

Spending for social security is still expected to rise in 1984. But Reagan's budget assumes that the package of reforms recently proposed by the National Commission on Social Security Reform, including a six-month delay in the annual cost-of-living adjustment, passes - an event that would cut $12.2 billion next year from what otherwise would have been spent.

Changes proposed in medicare/medicaid, though they'd save only $2.1 billion in '84, are perhaps more far-reaching. Reagan plans making beneficiaries share more of the costs for hospital stays.

Medicare would set rates with hospitals in advance, instead of paying whatever costs a hospital incurs, plus a slice of profit, and payments to doctors would be frozen for one year. Employees would be taxed on any company-provided health-care insurance over $175 a month.

And the administration is proposing a voluntary ''voucher'' plan, which would allow taxpayers to opt out of medicare, and instead have the government buy them comparable private health-care insurance.

About these ads

The Civil Service Retirement system, a cousin of social security, would also have its cost-of-living adjustment postponed until next January. Contributions civil servants make to their pension fund would rise, and the retirement age would be gradually raised to 65 instead of 55.

The salary scales for all federal civil servants would be frozen for one year.

Other entitlement programs. These programs - food stamps, child nutrition block grants, supplementary income payments to elderly poor, Aid to Families with Dependent Children, and veterans pensions - would be cut 5 percent under the Reagan '84 budget.

''They are asking for between 70 and 100 percent of the cuts - the deep cuts - they asked for in these programs last year,'' says Robert Greenstein, director of the Center on Budget and Policy Priorities.

The administration is also once again proposing that welfare recipients be required to work in private or public-service jobs, for free if necessary, if their benefits are to continue.

Employment and education. The '84 budget proposes $3.5 billion for employment training programs next year, a $15 million cut from last year. Funding would be greatly expanded, to $199 million, for a different program that retrains displaced workers.

Jobless eligible for extended unemployment benefits would have the option of taking their payments in the form of vouchers which would give a tax credit to any employer willing to hire them.

Department of Education programs would be cut about 12 percent, to $13.2 billion. Students who qualify for federal college grants would be required to pay 40 percent of the cost of their education, after subtracting their family's contributions.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.