The administration's top economic officials said yesterday there will be no repetition of the prolonged pause in economic growth that plagued the economy most of the last eight months of 1976.
"At present, we expect the rate of growth to slow down some," Charles L. Schultze, chairman of the Council of Economic Advisers said. "But it will not be like last year."
Schultze, testifying before the House Budget Committee, said the administration expects the economy to grow at a 5 per cent annual rate for the next 18 months, a little slower than the 7 per cent pace it maintained in the first six months of the year.
"I do not expect, except for maybe a month of so, the economy to go into a pause," Schultze testified.
Across the Capitol grounds at the Senate Budget Committee Treasury Secretary W. Michael Blumenthal said that a slight slowing "in the rate of growth is not unexpected at this stage of the business cycle when the economy is progressing from the recovery to the expansion phase.
"However, we do not anticipate any pronounded or extended sluggishness, and see no signs of recession."
Schultze told House Budget Committee members that conditions are far different than last year when business inventories were excessive, overall economic activity and confidence was lower and there was no economic stimulus program in place.
But both Schultze and Office of Management and Budget director Bert Lance who testified with him agreed, under questioning that the government may not be able to spend as much on public works projects by October as it hoped when the stimulus program was enacted several months ago.
Congress has approved $6 billion in public works programs to create jobs across the country. About $900 million of that money was to be spent in fiscal 1977, which ends Sept. 30.
According to OMB officials, $108 million had been spent by May, about what was expected, since it takes time to gear up the programs, which are paid for by the federal government but developed on the local level.
An OMB official said that another $103 million or so should be spent in June - the figures will be available by the end of the week - if the stimulus program is to keep on schedule, with payouts accelerating in July and August.
Some House Budget Committee members, such as Rep. Elizabeth Holtzman (D-N.Y.) and Rep. Donald Fraser (D-Minn.), were skeptical of the administration's committment to reduce unemployment, especially in the inner city.
"What does it mean to achieve 5 per cent economic growth, but leave our cities devastated, a battlefield," Holtzman complained to Schultze.