Times Staff Writer

Opening the first round of testimony in Congress on the federal arts budget, Frank Hodsoll, chairman of the National Endowment for the Arts, claimed Tuesday that even with significant cutbacks, "we will continue to be able to support the best of the nation's arts, provide access to excellent programming" and "encourage growth and stability in the diverse network of public and private support."

Hodsoll, a deputy assistant at the White House before his appointment by President Reagan as endowment chairman in December, 1981, tried to put the best possible face on the Administration's budget for the endowment, which would drop from $165.6 million for the current fiscal year to $144.9 million for fiscal 1987 if Congress fails to intervene.

Hodsoll's testimony before a sitting-on-the-floor-room-only crowd at the House appropriations interior subcommittee also comes in the wake of the Gramm-Rudman-Hollings budget-balancing law. On Saturday the first part of the measure went into effect, cutting endowment funds as well as other domestic programs an across-the-board 4.3%. Gramm-Rudman brought the arts budget for fiscal '86 (which runs from Oct 1, 1985, to Sept. 30, 1986) down to $158.5 million.

"We will be able to live with that," Hodsoll said before the hearing. "A major orchestra which gets $290,000 will now receive $283,000."

Asked how the overall pre-Gramm-Rudman proposed 12.5% cut from fiscal '86 to fiscal '87 would affect programs, Hodsoll smiled and waved his hand. "We will be all right," he said.

Whether Rep. Sidney R. Yates (D-Ill.), longtime chair of the appropriations subcommittee and a strong supporter of arts funding, would agree that the arts budget will be "all right" was unclear at the end of the first lap of testimony.

For the first five Reagan budgets, Yates has usually been the point man in seeing to it that the endowment budget was increased. When the Administration sought $144.5 million for the current fiscal year, he saw to it that it went to the present $165.6 million. Hodsoll explained that the Administration's request for $144.9 for fiscal '87 was about half a million dollars higher than the Administration had sought the year before.

But Yates appeared to be giving double messages Tuesday. At one point he noted that his committee has consistently raised the Administration budgets, and "that might take place again." That encouraging note, however, came after a particularly gloomy one.

Yates was asking Hodsoll how cuts are being made. Hodsoll replied that peer review panels each year determine who gets what. As Yates was asking the question he remarked, "Assuming the cuts are greater this year, and you don't get the $144 million, some suggest the figures for the deficit may be greater. We may be called upon to make additional cuts. . . . "

At still another point, in noting the decline in the budget for dance programs from fiscal 1986's $9 million to $7.6 million (before the Gramm-Rudman 4.3% cut), Yates commented on the review panel's work. "In other words, the panel determines who shall live and who shall die?"

Gramm-Rudman's impact was revealed in another way. During questioning by Yates, Hodsoll said that in his budget submissions last September to the Office of Management and Budget, he had initially recommended an increased budget for the endowment at $170.6 million. "But that was before Gramm-Rudman."

Hodsoll's formal testimony lasted only 35 minutes. Then Yates began calling the various program directors in the individual disciplines to ask how the cuts would affect them. Most said they would do the best they could with what they get.

Among the cuts in the 13 listed endowment disciplines, assistance to theaters would be cut from $10.7 million to $9.2 million; visual arts from $6.2 million to $5.5 million, and opera/musical theater from $6.1 million to $5.1 million. Literature suffers a loss from $4.9 million to $4.6 million. Yates seemed particularly disturbed by the opera/musical theater cutback. He said he had read in the papers that it was on the decline and wondered whether the endowment wasn't contributing to that decline.

Meanwhile, Hodsoll is asking for "a modest increase" of 2.7% in the endowment's administrative budget, from $14.5 million to $14.9 million. In response to a question from Rep. Les AuCoin (D-Ore.), Hodsoll argued that even with declining support, the number of grant applications remains the same.

Only at the end of the morning testimony did Hodsoll sound the least bit bleak.

"We have frozen all travel, all hiring, all promotions, and we are not there yet. We may have to furlough some people. We fought this over with OMB (the White House Office of Management and Budget) and we need this even after Gramm-Rudman."

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