Less Federal 'Gold' for the Golden State

JACK O. is all for wiping out the federal deficit by 2002. But the freshman at the University of California, Los Angeles says he could get hit from two sides if Republican budget proposals now on the table in Washington become law.

''I could lose my student loan at the same time my mom loses her job at the [county] hospital,'' he says, strapping his backpack to a moped outside the student union.

All across the Golden State, public officials and private analysts are trying to assess the broad array of congressional budget-cutting proposals that could amount to $50 billion less in Medicaid and Medicare projected funding just for Californians.

Similar arithmetic is being calculated from Salt Lake City to Salem, Mass., as a historic shift in who pays for the services the government provides is pondered on Capitol Hill.

Here, in the state with the nation's largest number of immigrants, poor children, elderly, and disabled, many are concerned that cutbacks would hit these vulnerable populations hard.

Others point out that the overall savings from a leaner federal budget will benefit California's lagging economy. State leaders claim that having more control over how government money is spent will allow them to serve their constituents in a more creative and efficient manner.

The nitty-gritty

''Los Angeles County is going to have to close down if Republican proposals go through,'' warns Rep. Henry Waxman (D), of Los Angeles. ''The impact of these health cuts is going to be devastating, particularly for those hospitals dealing with poor, elderly, and children.''

Democratic Senators Dianne Feinstein and Barbara Boxer have also come out against the federal budget-balancing bill. At present, Republican lawmakers from the US House and Senate are hashing out the final details to hand to the president. California's senators have assessed the reverberations that are likely to be felt in their state:

* On social services. Block grant funds to California for the elderly, child care, adoption programs, child-abuse prevention, deaf access, and child welfare would be cut by 20 percent or $3.3 billion over seven years.

* On the Earned Income Tax Credit Cut. This proposal would effectively raise taxes for nearly 3 million California families, more than 21 percent of taxpayers in the state, by an average of $500 each year for seven years. More than 615,000 working Californians will lose their eligibility for the credit because it will no longer be available to families without children.

* On child support. Some 600,000 California child-support cases may have to now pay proposed child-support collection fee.

* On Medicare and Medicaid. The total drop in the growth rate of California's Medicaid spending would be up to $18 billion over seven years. California public hospitals could lose $2.3 billion over seven years, and children's hospitals are set to lose $900 million by 2002. California could lose more than $32.5 billion in Medicare over seven years, including $7.5 billion in Los Angeles County where there 1 million people collect federal funds.

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