Office of Management and Budget Director Bert Lance told reporters yesterday that the Carter administration is still convinced it needs some sort of anti-inflation program that provides advance notice of wage and price increases.
That proposal was vigorously attacked earlier in the week by AFL-CIO president George Meany and Federal Reserve chairman Arthur F. Burns.
"We have to promulgate some sort of dialogue (on wage and price increases) between the public and private sectors, and it has to be before rather than after the fact," Lance said. "What we have to avoid is playing 'catch up' ball."
The budget director said that the anti-inflation program, being drawn up by the new Economic Policy Group (EPG) headed by CEA chairman Charles L. Schultze and Treasury Secretary W. Michael Blumenthal, would be submitted to President Carter in about six weeks.
At the same time, Lance disagreed with Burns, assessment that the Carter-amended budget "is stirring up new fears of inflation." Lance said he thought large budget deficits this year and next would be less of a problem than suggested by Burns, because "there's not much (business) loan demand, and not much of a conflict between the private and public sectors (on) borrowing money."
Nonetheless, he said that "Dr. Burns ought to be concerned about inflation . . . All of us are, and we can't be light about it."
Later, both Lance and former Economic Council chairman Leon H. Keyserling testified on the budget before the Joint Economic Committee.
Keyserling, who was CEA chairman under President Truman, said the Carter stimulus package is "seriously deficient in size and misdirected in detail." He said that the first-year package should be in the neighborhood of $25 to $30 billion, instead of $16 billion.
Keyserling said at least two-thirds of the stimulus should be for direct job creation, rather than tax cuts - but not the "conventional" public service jobs and public works. Most, he said, should "be (for) marginal assistance to job expansion in the private sector, housing and energy being good examples."