In 1975, when the Council of Jewish Federations (CJF) opened its Washington Action Office, Jewish leaders saw a gold mine in the federal programs that were dramatically expanding America’s social safety net.

This week, President George W. Bush announced a budget that critics say could start unraveling that net. And politicians from both parties say that with huge deficits and soaring defense costs, the funding mine may be tapped out.

Likely cuts in Medicaid, a vital ingredient in the Jewish service delivery mix, could have a particularly big impact on Jewish health agencies, which focus heavily on the elderly.

“Over 50 percent of revenue that our agencies receive from government originates with the Medicaid program,” said Ronald Soloway, managing director of government relations for the UJA-Federation of New York.

Even small cuts in Medicaid, or changes in how the money is allotted to the states, can have a dramatic impact on Jewish health services, Jewish leaders agree.

”Medicaid money goes down, and nursing homes and other institutions start to cut services or close,” said an official with another Jewish organization. “It’s as simple as that.”

For Jewish agencies across the country, and especially in New York, government money has become the critical lifeline for a growing population of vulnerable citizens, including the elderly and the poor.

”It’s a huge source of anxiety for us, but there’s no realistic alternative to government money,” said William E. Rapfogel, executive director of the New York Metropolitan Council on Jewish Poverty, whose agency has faced a doubling in Jewish poverty in recent years. “Every year when we go through the city, state and national budget process, there’s always the possibility of a crisis.”

Rapfogel’s organization, widely considered a model social service provider, receives 97 percent of its funds from an alphabet soup of government agencies – some direct from Washington, some passed down through state and local agencies, each of which takes a cut for “overhead.”

A tremendous amount of his staff’s time is spent writing and updating grant applications and keeping up with the extensive, finicky reporting requirements of government bureaucracies.

Rapfogel agrees with the Bush Administration that there is room to trim waste from programs like Medicaid, but said that in many cases his agency is prohibited from doing that due to rigid federal rules.

That’s a double bind for agencies that may be forced to do more with less but are not allowed the flexibility to become more efficient.

Rapfogel said that major cuts in health and social service money coming from the federal government cannot be made up through charitable giving.

”There’s no realistic alternative,” he said. “We have been increasing our fund raising, and we can and should be doing a better job at that. But the amounts of money are huge.”

That’s the predicament many Jewish agencies across the country are facing as the federal government re-examines its role in funding health and social services, and as cities and states, required by Washington to do more with less, engage in fiscal triage.

From the start, tapping into the government money pipeline was a huge plus for a community that cares more than most about its vulnerable members – but also a source of risky dependence.

”It’s like a narcotic,” said an official with one group. “You get hooked on big government money. You’re able to provide better services to more people, you can focus on providing those services and not just raising money, and before long, you can’t get along without it. Then you get murdered every time there’s a cut, or even when government spending goes flat.”

The Jewish community has tapped into government funding for decades, since the New Deal created the idea of a government-funded safety net, but the process accelerated in the late 1970s and early 1980s as unprecedented amounts of taxpayer money hit the funding pipeline.

When the Council of Jewish Federations, now part of the United Jewish Communities, opened its Washington Action Office, a key function was to coordinate the hunt for federal funding, according to its first director, Mark Talisman.

”It was a bottom-up decision,” he said. “Jewish agencies around the country were working to meet the needs of people in their communities, and especially the aged. There was a feeling that we’re part of the American community, we’re not going to ghettoize ourselves, from a government point of view. When programs become available, we’re going to use them.”

Medicaid money was flowing, subsidized housing programs were flourishing, and federations in New York, Chicago, Los Angeles and Miami pioneered the use of combined government and philanthropic dollars to provide community services.

The CJF Washington Action Office accelerated that process and helped open it up to smaller communities without the political resources.

Before coming to CJF, Talisman was a top aide on Capitol Hill, where he authored a document for constituents listing federal programs offering health and human service grants.

At CJF, an expanded and specialized version became the first comprehensive guide to government funding for Jewish organizations.

Medicaid, Talisman said, “has a huge piece of the puzzle in the growth of Jewish services, which colors every aspect of Jewish life.”

Agencies also learned to parlay one grant into many.

”Chicago is a perfect example of how to organize this in all its majesty, without pillaging the treasury,” Talisman said. “They were able to get small grants, and immediately use that to get state money and local money. We learned how to produce a wave effect.”

From the start, he said, there was talk at the highest communal levels about the risks of dependency on government bodies, which are subject to the whims of politics.

“We had prolonged discussions and debates. There were some who felt it was like a drug,” Talisman said, “and we realized that going after federal funds just because it was there was not good. It has to be based on real needs.”

But quickly, community leaders learned just how many more people could be provided with more services once the U.S. Treasury was backing up their efforts.

“Do you classify transportation for the elderly as a fringe benefit? Well, just try going without it,” Talisman said. “The government money allowed the Jewish community to do things it wouldn’t have been able to do without. And now we’re seeing more of the risk.”

“There was a lot of talk about the risk at first,” said Shoshana Cardin, a Baltimore activist who held numerous leadership posts in national and local Jewish organizations. “But we were in a time of economic growth and the feeling was if anything happened, we could cut back and try to make it up through the private sector.”

But times have changed, she said. “That’s no longer possible and we’re at a point where we can’t do it on our own and provide the same level of services. And that puts us at risk.”

Cardin agrees with most Jewish leaders that the benefits of government money far outweigh the ever-present realities of funding cuts and red tape.

“The risk today is very serious, but I don’t know if we’d have done things differently if, 10 years ago, we’d known where we would be today,” she said. “People really have benefited from these programs; they deserved to be helped. But we have to prepare for a time of change. It’s going to affect everything we do.”