Reagan Seeks Cut in Vets’ Medical Aid : Budget Also Calls for Military Boost, More Aid to Rebels

President Reagan will ask Congress to cut veterans’ medical benefits in a federal budget proposal that emphasizes military spending over domestic programs and allocates another $100 million or so for Nicaragua’s contra rebels, it was disclosed today.

“We will be cutting a couple hundred million dollars, something in that nature,” from medical programs for veterans, said James C. Miller III, the director of the powerful Office of Management and Budget.

But “any veteran who’s sustained an injury or an illness connected with their service, of course, will be covered,” Miller told ABC’s “Good Morning America.” He also said that “poor veterans will be covered.”

$1.8-Trillion Plan

Reagan’s budget plan will be released formally Monday, and the New York Times reported today that confidential documents reveal the new spending plan proposes $1.8 trillion in military spending over the next five years.

The newspaper report also said the budget plan will slash federal farm aid by more than half and sharply curtail the growth of many domestic programs over the next five years.

The newspaper said the fiscal 1988 budget proposal totals $1,024.3 billion, with a deficit of $107.8 billion--just below the target set by law.

Reagan’s proposed cuts in veterans’ medical benefits will apply to those who earn $15,000 or more a year and do not suffer from serious medical problems related to their military service, Miller said.

Available Space

“Even some veterans above the $15,000 or $20,000 limit, when it’s a married couple, will be covered,” Miller said. “The only question is how much space available will there be.

“Some of the space available can be very expensive. We’ve got to be realistic about how much we can spend on that area.”

The Reagan Administration will again request a hefty infusion of cash for the contra guerrillas fighting Nicaragua’s leftist Sandinista government.

Congress in 1986 granted a $100-million request and Miller said, “We will be asking for something in that range this year. We will not abandon the contras. We will stay with them.”

Classified Matter

Budget spokesman Edwin Dale said the contra request will “almost certainly be in a classified section” of the budget.

Despite the political shock waves caused by the Iran arms-contras aid scandal, Reagan “has been involved as much this year as last year” in the budget process, Miller said.

“He’s had to make a lot of decisions,” Miller said. “There’s been no falling back of the President’s participation as far as I can see.”

Miller also said Reagan will request cuts and reform in the Medicare and Medicaid health insurance program.

“Keep in mind that health care costs in this country are a much larger proportion of the gross national product than in other industrialized countries,” Miller said. “That proportion is rising every year at a much faster rate.

“But let me just assure that medical care expenditures in this budget will actually rise.”