WASHINGTON, D.C. ? Lost amid the debates about President Bush’s tax cut and his plan to revamp Medicare is an attempt to reshape the key program that provides housing assistance to the poor.

The administration wants to change Section 8 from a program that gives rent vouchers to nearly 2 million low-income families to a system of block grants that states would control.

With between $1 billion and $2 billion worth of vouchers lost annually to fraud and mismanagement, administration officials argue that Section 8 needs an overhaul.

“It’s obviously not at the level we think it should be, if you’re losing a billion dollars,” said Donna White, a spokeswoman for the Department of Housing and Urban Development.

But the administration is meeting stiff resistance from housing advocates and state and local housing officials. Opponents argue that federal block grants are usually either “flat-funded” from year to year or increased by just minimal amounts, leading eventually to cutbacks in services.

Kim Schaffer, a spokeswoman for the National Low Income Housing Coalition, said that could force states to issue fewer vouchers, require the poor to pay rent, or serve people with higher incomes.

The proposal comes at a time when states are facing a massive budget crisis and are cutting critical programs. Since 2001, the states altogether have been trying to close a $200 billion deficit.

“It’s been a difficult environment,” said Roger Williams, who runs the Kansas Section 8 program for the state Department of Commerce and Housing.

Under Section 8, which began during the Nixon administration, the federal government subsidizes private landlords to provide low-cost housing for poor families and other people on fixed incomes, such as the elderly and people with disabilities. Local housing authorities issue vouchers to qualified renters who pay no more than 30 percent of their income. The government pays the balance.

Section 8 advocates fear that the administration might put a time limit on how long families could live in publicly assisted housing.

Michael Liu, HUD assistant secretary for public and Indian housing, said his department is not mandating time limits, but that states would be free to use them.

Liu disputed the contention that block grants invariably mean less money. He said the HOME program, which sends grants to states to help build and rehabilitate affordable housing, went up by nearly 11 percent this year and the administration has asked for a similar increase for fiscal 2004.

Liu also said HUD has proposed a $900 million increase for Section 8.

Opposition is broader than just housing activists and Section 8 managers. The National Association of Realtors and a half dozen other real estate and housing groups also oppose the plan, saying Section 8 “has become the cornerstone of federal affordable housing policy.”

And opposition has emerged among Republicans in Congress, as well. Sens. John Warner and George Allen of Virginia have written a letter against the plan signed by 42 colleagues. And Republican Sen. Kit Bond of Missouri, who heads the Senate Appropriations subcommittee that oversees the HUD budget, said his experience as Missouri’s governor taught him to be leery of federal block grants.

“Once you set up a block grant program, it never grows,” he said.