Reagan program cuts may chill "frost belt" most.
Washington — Will the "frost belt" states of the Northeast and Midwest bear the brunt of the Reagan budget cuts? Many close observers think so. They say there are clear signs that the administration's spending plans could effect important demographic changes in the United States, accelerating trends that aid the Sunbelt and cause concern in the Northeast and Midwest.
Largely excluded from Mr. Reagan's "safety net" are the working poor, those who do not rely -- at least for the moment -- on social welfare programs. And they, like the beneficiaries of such programs, live in disproportionate numbers in the older metropolitan areas of the North and East.
Advocates for these regions, as well as some neutral observers, say these areas will feel most sharply the proposed cutbacks in many federal programs. For example:
* Jobs: Nearly 800,000 public-service jobs and job-training positions will be eliminated. Peggy Cuciti of the federal Advisory Commission on Intergovernmental Relations, which studies the financial relationships of the different levels of government, points out that a disproportionate number of these publicly funded positions are held in "frost belt" states. Since many of these states have higher unemployment rates (as well as unemployed who remain jobless for longer periods), administration plans to cut back compensation programs also will have greater effect here.
* Housing: President Reagan wants to cut back funds for housing rehabilitation and "urban homesteading," reduce the number of new subsidized housing commitments by one- third, and lower government rent assistance for the poor. "With the nation's highest percentage of rental housing and higher housing costs, lower-income households in Northeastern and Midwestern states will bear the brunt of cuts in assisted housing programs . . .," warns the Northeast-Midwest Congressional Coalition, a bipartisan group of more than 200 members of Congress.
* Energy: The administration plans to cut low-income energy assistance by 25 percent as well as reduce funds for "weatherization" and other conservation programs that are particularly important in colder regions of the country.
* Public works: The Reagan budget envisions a hazardous-waste "superfund" well below what President Carter had asked for, along with a major reduction in Environmental Protection Agency grants for sewage treatment. Both of these programs are of special concern in the Northeast and Midwest, as is the federal urban parks program, which the President wants to eliminate.
* Transportation: Federal mass-transit operating subsidies will be held at 1981 levels through 1982, then phased out by 1985. "No new transit rail system construction would be federally financed," according to budget documents. Amtrak subsidies also will be reduced as will the Northeast Corridor Rail Improvement Project.
Between 1975 and 1979, residents of the Northeast and Midwest paid $165 billion more in federal taxes than was spent by Washington in their region. The Sunbelt saw a net gain of $112 billion. If defense spending increases while domestic programs are cut, the Sunbelt (with many military bases and other defense facilities) may benefit even more.
The President's Commission for a National Agenda for the Eighties last December recommended a "long-range reorientation of federal urban policy" widely interpreted to favor the burgeoning Sunbelt.
While recognizing the "traumatic consequences for a score of our struggling largest and oldest cities," the commission (which had been appointed by President Carter) said, "we cannot avoid the fact that growth and decline are integral parts of the same dynamic process in urban life."
With some notable exceptions (the commission recommended federalizing welfare), the thrust of Reagan urban policy seems to follow along these lines.
"A good deal of it is moving in the direction our commission recommended," said Charles Bishop, president of the University of Houston, who headed the group's urban policy subcommittee.
This troubles such groups as the US Conference of Mayors, which represents the nation's larger cities. Other urban experts agree that the frost belt -- at least in observing the early rounds of the federal budget battle -- has cause for concern.
"The cuts are going to fall hardest on the domestic programs, particularly those best targeted in terms of the needs of older and distressed areas," says Richard Nathan, director of Princeton University's Regional Center.
"I was hoping we'd see some [grant] formulas changed so that we'd have a safety net for communities," said Dr. Nathan, who was assistant White House budget director for human resource programs during the first Nix on term. "We don't yet see evidence of that."