Pensioners, Welfare Recipients, Military Personnel Exempt : Cuts to Be Felt From the Grocery to the Airlines

Farmers will receive smaller price-support checks. The federal meat inspection service could be forced to shut down for a month. The AIDS research budget will be reduced. And the Federal Aviation Administration might become a “disaster.”

Those, officials warn, are just some of the consequences of the across-the-board spending cuts mandated by the Gramm-Rudman law, which President Reagan is to implement today.

Reagan’s action became all but inevitable Thursday, when congressional and Administration budget negotiators failed to reach agreement on a plan to trim the federal deficit by at least $23 billion for fiscal 1988, which began Oct. 1.

Under the order that Reagan is to sign, the government’s domestic agencies will have to cut most of their programs by 8.5% from the spending levels in effect when the fiscal year began. And the Defense Department will have to cut its programs--except military personnel, which Reagan exempted--by 10.5%.

Jobless to Get Checks

By law, some domestic programs are also exempt. Government benefit payments will not be touched. Social Security recipients, veterans, the unemployed and welfare recipients will continue to get their checks without cuts.

Even for those program managers who face cuts, there is no immediate rush. For now, they can make modest trims--by reducing overtime and travel, for example--or even try to get by with no cuts at all. But they would have to implement deeper cuts later unless Congress comes to their rescue with more money.

“How the agencies make the cuts is up to them,” said an official of the White House Office of Management and Budget who asked not to be identified. “We are not dictating to them.”

Under Gramm-Rudman, the Agriculture Department will have less money for the federal payments and loans that many farmers rely on. And, for the local offices that handle the paper work for federal farm programs, Stephen Dewhurst, the department’s chief financial officer, predicted “abbreviated hours or days when they don’t open.”

Meat Service Cut to Bone

Joseph A. Powers, a deputy administrator of the Agriculture Department’s Food Safety and Inspection Service, which oversees the nation’s meatpacking plants, said that the service has already cut its budget to the bone. So an 8.5% cutback, he said, would leave his office no money to run its operations for about a month at the end of the fiscal year.

“We would not be able to stay open. There are no options beyond that,” Powers said. “And, if we can’t stay open for business, the meat and poultry business closes as well, because they can’t operate their plants without federal inspection.”

But, outside the Agriculture Department, no one expects such drastic consequences. “They can’t do that,” said an officer of a meatpacking company in Washington. “That would mean that all the grocery stores would have to shut down.”

James H. Burnley IV, nominated to be secretary of transportation, told a congressional hearing recently that the potential budget cuts could virtually cripple the Federal Aviation Administration. The Gramm-Rudman law does not leave the department the flexibility to transfer funds from highway programs to the financially strapped FAA.

‘Disaster on Our Hands’

“We would literally have a disaster on our hands,” Burnley said, because the FAA would be unable to hire the additional air traffic controllers it needs. It now employs 11,200 fully certified controllers, compared with 16,250 before the 1981 strike in which most controllers were fired.

Burnley said that the FAA would need “immediate help from Congress.”

Other government agencies foresee less drastic consequences.

At the Drug Enforcement Administration, spokesman Cornelius J. Dougherty said that the expected cut of $41.6 million “is not going to affect any operational programs. It will amount to a kind of belt-tightening.”

Likewise, the $70-million cut at the Immigration and Naturalization Service “is not going to have a major effect” on programs, spokesman Verne Jervis said.

Public schools and college students will feel no immediate impact from Gramm-Rudman cuts because the federal aid they are receiving this year was voted by Congress last year. This year’s budget cuts, unless reversed by Congress, will mean program reductions next year. Education Department officials said that next year college students might be required to pay higher fees for guaranteed student loans.

Possible AIDS Cutback

At the National Institutes of Health, spending for AIDS and other major activities will be trimmed, but officials probably will keep some projects going at full speed and sharply curtail or even eliminate others. “Individual judgments can and will be made,” said Norman Mansfield, the institutes’ director of financial management.

Even on the eve of the Gramm-Rudman cuts, some government program managers remained unsure of what they would mean for them.

“There are all sorts of contingencies and exigencies,” said Jonathan Moore, director of the State Department’s Bureau for Refugee Programs. “I can’t predict how that’s going to come out.”

A Labor Department spokesman had the same uncertain reaction. “We simply don’t have anything at this time in terms of impact,” he said.

Agencies that distribute benefit checks must trim administrative costs even though the benefits themselves will remain intact. Spokesman Phil Gambino said that the Social Security Administration would reduce office hours only as a last resort.

To Cut Doctors’ Payments

“Our objective is to do everything to prevent any deterioration of services,” he said. The agency would look first at cutting back travel, training, purchases of equipment and renovation of buildings and sites, he said. Under a special provision of the Gramm-Rudman law, Medicare payments to doctors and hospitals will be cut by 2.3%. There will be no impact on hospital patients or on patients of doctors who agree to accept Medicare’s suggested fee schedule for payment.

The Defense Department is also a special case. Because President Reagan exercised his authority to shield military personnel from cuts, other programs will have to absorb 10.5% reductions.

The House Budget Committee staff said that as many as 100,000 civilian Pentagon employees might be laid off, “including personnel responsible for maintaining and repairing weapons systems such as tanks, planes and ships. This would have a major negative impact on the readiness of our forces.”

Staff writers Lee May and Eric Lichtblau contributed to this story.