WASHINGTON -- President Reagan's proposal to swap expensive Medicaid and public assistance programs with the states has been endangered by the reluctance of governors to accept it, a White House spokesman said Saturday.
'A lot of them are saying, 'We'd love to have you pay Medicaid but we don't want food stamps,'' said White House communications director David Gergen. He said many governors 'for a long time' have held a philosphy 'to federalize an awful lot of this.'
'There are disagreements,' said Richard S. Williamson, presidential assistant for intergovernmental affairs.
Both said the Medicaid offer could be withdrawn if an acceptable exchange cannot be worked out.
A centerpiece of Reagan's New Federalism blueprint is a proposed swap in which the federal government assumes the $19.1 billion Medicaid program while states take over the food stamp and Aid to Families with Dependent Children (welfare) programs, which cost $16.5 billion.
Pressure for changing that plan emerged a week ago during a 'developmental' meeting between governors and White House officials. The governors insist that programs dealing with the poor -- such as AFDC and food stamps -- are a federal responsibility.
Gergen said Reagan was not ready to abandon the proposal. 'We're still in the middle of discussions with them,' he said.
And Williamson said that in an effort to salvage the swap, 'We are looking not only at the president's original version but at ... probably a dozen configurations.'
Gov. Richard Snelling of Vermont, chairman of the National Governors Association, said that because of the policy adopted by the govenors on the subject, 'It is clear to me it would be very difficult to get the governors to agree to a swap at this time ... which did include those items (food stamps and Aid to Familes with Dependent Children).'
He was interviewed at the Republican Leadership conference in Easton, Md., where the GOP leaders adopted a resolution supporting a compromise New Federalism plan.
The resolution was similar to the position already adopted by the governors association which calls for the federal government to take over 'income maintenance' programs such as welfare in exchange for state governments assuming an equal dollar amount in aid now paid for by Washington.
Williamson said that if the states do not change their positions, there could be no swap and the Mediciad offer would be taken out of the negotiatons. Another meeting between the White House and governors is scheduled Wednesday.
But he insisted the overall federalism concept was not endangered and changes were anticipated even when Reagan announced the program in his State of the Union address Jan. 26.
'The whole concept was laying out a framework instead of a bill,' he said to emphasize that the program had flexibility built into it. 'If he had wanted to send up something chisled in stone, he would have sent up something in that fashion.'
The second major segment of the Reagan plan -- turning back to the states more than 40 current federal programs ranging from transportation to community services -- is 'moving strong,' he said.
That part of the program covers some $30 billion of the overall $50 billion initiative. 'There are some refinements going on, but it moving with pretty good positive force,' he said.
Williamson said the basic New Federalism program had to pass through three stages: the presidential outline; hearings by public interest groups such as the National Governors Association; and development meetings. He said the first two stages had been completed and the third was just underway.
