The White House, having rejected most proposals for even a moderately tough wage-price restraint program, is now struggling to put together a low-key plan designed to help save face for the administration's foundering anti-inflation efforts.
Officials say the cabinet-level Economic Policy Group is beginning to consider proposals that, if nothing else, would set an overall "framework" for the administration's anti-inflation policy and lay down a genral code of conduct for various sectors of the economy.
The administration then would try to coax business and labor into working together voluntarily to develop specific proposals for eliminating existing practices and conditons that economists say are keeping prices from slowing further.
Officials say the relatively mild program would not involve formal controls, Kennedy-style guideposts, or - most likely - any form of numerical goals or standards. Instead, industries would be given informal lists of "suggestions" that they would be free to carry out or reject.
Authorities say the administration may seek to make use of some industry labor-management committees, similar to the one-being run on a national scale by John T. Dunlop, the former Secretary of Labor. But mostly, they stress, any decisions would be left to the industry involved.
Policymakers are hoping to unveil the proposal in time to include it in the President's late January economic message, but aren' sure they'll be able to make it. Although top officials agree some anti inflation effort is necessary, they still are split over how to go about it.
Meanwhile, the administration was criticized yesterday for its lack of any anti-inflation program by Arthur M. Okun, onetime economic adviser to President Johnson. Okun told reporters the White House was following "a pretty dangerous course" by skirting the issue.
The Democratic economic adviser said that from all indications, "they do not have an . . . anti-inflation policy" at the White House. "Prayer is the mechanism for dealing with inflation, as far as I can see," he said. "I see a lot of reasons to believe" that inflation may accelerate.
The proposal to make use of Dunlop-style labor-management committees is being pushed by Secretary of Labor F. Ray Marshall. However, the idea reportedly has received a luke-warm reception from some other members of the policy group.
The White House recently rejected a spate of suggestions on how to help slow inflation in the coming year, among them a proposal by Okun for a tax incentive system that would reward companies and unions which hold wage-price demands down. Officials dismissed it as too complex.
The only anti-inflation steps the administration has proposed to far have been provisions in the President's new tax package that would eliminate the 4 per cent excise tax on telephones and reduce the employers' share of unemployment insurance taxes.
However, while officials have been touting these as "anti-inflation" measures, White House economists concede the provision to remove the telephone tax would pare only 0.0019 per cent from the estimated 6 per cent inflation rate next year, and the employer tax measures 0.15 per cent.
Policymakers also have rejected proposals for a federally-financed reduction in state sales taxes, for grants to eliminate state's deficits in the unemployment insurance fund, and for elimination of other state taxes such as excise taxes on cigarettes and liquor.
Officials say the new program, if adopted, would have three basic objectives:
To set broad criteria for what "framework" for the administration's anti-inflation policy - both to provide general direction to government agenies and departments and to give presidential impetus to the entire wage-price effort.
To set broad criteria for what kind of wage-price increases policymakers would consider inflationary in various sectors of the economy - based on a description of general market conditions, and not on specific numerical guidelines.
To publish lists of suggestions for various steps that specific industries can take to help slow inflation in their sector of the economy.