Budget ‘Road’ Hearings Open : Critics Assail Social Cuts at Panel Session in N.Y.

The opening act of the House Budget Committee’s six-city “road show” of hearings on President Reagan’s fiscal 1986 budget brought the plan a torrent of criticism Saturday as regional officials testified that proposed cuts in social programs would devastate New York and other major urban areas.

During the next eight days, the committee will travel across the nation to solicit public comment on the President’s budget proposals and deficit-reduction alternatives. Democrats hope that the widely publicized hearings will help fix the blame for the deficits--and the unpleasant choices required to bring them under control--on the White House.

Saturday’s hearing focused on urban problems in light of the Administration’s plan to end such programs as mass transit subsidies, urban development grants and federal revenue-sharing, the no-strings-attached grants that many cities use to fortify their budgets.

New York City Mayor Edward I. Koch told the committee that, although his city is back on sound financial footing a decade after the financial crisis that almost left it bankrupt, it still has 3,000 fewer police officers than it did then and needs more teachers, sanitary workers and firefighters.

“It would be impossible for us to make up the gap” if Congress went along with the Administration’s proposals, Koch said. “The monies that would have gone to adding cops, they would go to providing the medical services the federal government seems to be saying people should be deprived of.”

But Rep. Delbert L. Latta of Ohio, the ranking Republican on the committee, countered: “The federal government helped bail you out when you were on the brink of disaster. Now the tables are turned. . . . The federal government is asking you to help us out.”

Part of the problem, Koch said, is that “we are picking up the bills for Congress’ good ideas,” such as a law that allows all senior citizens to ride mass transit for half-price even if they are not residents of the city. Koch said he voted for that bill when he was in Congress but regrets it now.

Sen. Daniel Patrick Moynihan (D-N.Y.) said the Reagan Administration “deliberately created” record deficits “as the occasion to dismantle many of the basic social commitments of the last half-century. These are people who care little about ink, red or black; they care about political doctrine.”

George Gross, the city’s human resources administrator, criticized Reagan’s contention that the truly needy have remained protected by a federal “safety net” during the first four years of his Administration.

“If you . . . always redefine the safety net to narrow the range of the truly needy, it is not, in fact, a safety net; it is a budget cut,” Gross said.

“The President’s budget is warped” because it allows the military to grow while forcing cuts on social programs, said Rep. Charles E. Schumer (D-N.Y.), a Budget Committee member. “We do not expect to emerge from . . . these hearings unscathed, but to do it (draft a budget) in such a lopsided manner is unfair and, I believe, will not be acceptable to the American people.”

A parade of officials from city agencies and volunteer groups also testified at the hearing, which Budget Committee Chairman William H. Gray III (D-Pa.) called part of an effort “to take the budget out of Washington, D.C., and bring it to the American people.”

One Republican staff member, however, termed the hearing “nothing more than just a gripe session.”

Weighing in as a Republican witness was J. Peter Grace, who headed the President’s Private Sector Survey on Cost Control, which has made cost-cutting suggestions that it contends would save $424 billion over three years, an estimate that is widely disputed.

Grace, who is the chairman of W. R. Grace & Co., complained that many of his commission’s ideas have been ignored. He said that he plans to follow the committee around the country and testify at as many hearings as possible.

“Congress is paralyzed by its pandering to special interests and its preoccupation with political realities,” he told the committee. For example, he said, congressmen refuse to allow military bases in their districts to be closed, even though the Pentagon has said that only 300 of the 4,000 bases are “considered significant.”

The problem is “waste, waste, waste, and it’s not compassionate” to continue wasteful programs, he said.

When asked whether he would support Koch’s proposal to close corporate tax loopholes and require companies to pay a minimum tax, Grace replied: “I’m all for corporations paying taxes.”

However, he acknowledged that his own company enjoys large domestic tax savings because it receives credits for taxes that it pays overseas.