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The Administration, in contrast, has kept a discreet distance from those rather breathtaking assertions. Even Stockman's contention that the Government has no obligation to help Americans was quickly disavowed. Said Treasury Secretary Donald Regan: "I think Dave went a little too far in that statement. When people are in need or unemployed, they can expect that the Government will help them." Indeed, the Administration has concentrated on more reassuring defenses of its program: that its budget cuts preserve a "safety net" for the "truly needy," and that its proposal to slash all income tax rates by 30% over three years confers roughly equal percentage reductions in all brackets. Critics point out that the savings in dollar amounts are much greater, and more valuable, in the higher brackets than in the lower. Conservative economists argue that only higher-income people can do the saving and investing needed to renew noninflationary growth, though that case has not been made effectively by the Administration.
As to the "truly needy," the critics note, they usually pay no income taxes, and thus would get no benefit from the tax-reduction program. Nor does the "safety net" of seven programs that are exempt from budget cuts—primarily Social Security pensions, veterans' benefits and Medicare for the elderly—help them much. A study by the Field Foundation's Project on Food Assistance and Poverty found that 80% of the $210 billion now being spent annually on the seven programs go to people with incomes above the "poverty line," defined by the Government as $8,450 a year for an urban family of four.
In contrast, people with incomes below the poverty line would be affected by several spending cutbacks. The University of Chicago's Center for the Study of Welfare Policy gives this example: a working mother in Missouri with two children who earns $390 a month from her job now also receives $122 a month from the federal Aid to Families with Dependent Children program, $91 in food stamps and $39 in earned-income tax credits, leaving her family's total income 10% below the poverty line. Under the Reagan program, her food stamps would be cut to $75 and after four months her AFDC grant would be wiped out entirely, reducing her income to 31% below the poverty line. On top of that, she would no longer qualify for Medicaid benefits, and any assistance she might get from a federal program to help the poor buy fuel to heat their homes would be reduced.
Says the Chicago Center: "Taken alone, each cut seems to be small enough to allow a recipient to absorb it with other income. Taken together, the effects of the cuts are great enough that many families will be unable to meet their monthly living expenses."