Inside Report (3)

New York Gov. Hugh Carey, who early last month startled many by calling for an open National Democratic Convention, may soon endorse Sen. Edward Kennedy for president.

Why would Carey risk directing the wrath of Jimmy Carter, the probable Democratic nominee, toward the state he will be governing for at least the next 2 1/2 years? Because, according to one Carey aide, "the governor feels the President's approach to the problems of New York State are either lacking or downright prejudicial."

Carey is upset over an $80 million cut in New York's medicaid reimbursements, a Carter administration suit seeking $300 million in alleged medicaid overpayments by the state, and indications that New York will lose $750 million in federal aid in fiscal 1981 because of Carter's budget cuts.

But iths too early to say definitely that Carey will endorse Kennedy. He is still somewhat worried that an outright endorsement of his Massachusetts friend could mean "pulling the plug" on federal aid to the state if Carter is re-elected this November.m

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