When President Carter unveiled his new anti-inflation program earlier this month, there was widespread clucking that the measure would be ineffective. The consensus was the plan was so vapid it would have little or no impact on inflation. People were complaining that the President had brought forth another mouse.
Now, barely 1 1/2 weeks after Carter proposed the plan, there's growing apprehension that it may not be a mouse at all, but rather a precursor of a fiercer threat. The worry is, that when this program finally fails, Carter will be forced to move to a tougher plan - possibly involving formal wage-price guidelines. And that brings on the specter of dreaded controls.
To be sure, neither the President nor his top policy makers actually has mentioned the prospect of a stiffer plan. If anything, Carter himself has gone to great pains to eschew formal guideposts. And his strategists insist privately they aren't considering even voluntary restraints. A good deal of the fears can be dismissed as the normal paranoia of business and labor.
But the fires have been stoked precisely because the new proposal seems so squeamish that most outsiders see it as doomed from the outset. If the plan merely fizzles, Carter may be able to ignore the setback. But if it blows up in his face - that is, if business and labor openly defy the administration on the wage-price front - then he may be forced to act more harshly.
Indeed, organized labor already has been growling its disapproval, hinting that it may refuse to cooperate in Carter's effort. Almost before Carter had finished announcing his new program, George Meany, president of the AFL-CIO, was claiming that labor had been sandbagged because the President had thrown in a surprise wage guideline.
The widespread apprehension isn't over the basic strategy behind the new Carter program. Most labor-management experts agree the President has set down a fairly sensible overall goal - a "deceleration" from the present 6 percent inflation rate by trying to hold wage and price increases to below the average for the 1976-77 period.
What has heads shaking all around the city is that beyond setting down this basic principle, Carter hasn't really offered any solid plan for how to carry out his wage-price program. The only hint he gave last week was of plans to hold periodic talks between White House officials and various groups of business and labor leaders. But all would be informal, catch-as-catch-can.
"What they have here is a vague principle in search of a program," frets one knowledgeable analyst with experience in this field. "The 'deceleration' principle is very clever. It gives them both the underlying philosophy and the flexibility they need. But they don't have any way to implement the program. My own guess is that it'll fizzle out," he says.
Although Carter has mentioned both wage and price behavior, the administration's main aim actually is to dampen pressures for hefty wage increases before the beginning of next year's heavy collective bargaining schedule. Economists cite the wage spiral as one of the key elements today that that is preventing any slowdown in inflation.
The bargaining calendar is light enough right now, with most of the "problem" in the non-union contracts go up for grabs again - trucking, autos, rubber and electrical workers. What happens in these key industries could set the pattern for wage-behavior in the whole country for the next several years.
What Carter hopes to do is bring in management and labor groups industry by industry for "voluntary" discussions aimed at trying to cut costs. The emphasis: How to boost productivity, get a better deal on materials, possibly ease government regulations. In the process, officials hope they also may encourage employers to stand firmer in next year's wage negotiations.
In truth, the administration itself isn't as enthusiastic about the plan as its rhetoric might imply. The proposal came mostly because the administration was under pressure to take at least some kind of action to deal with inflation. Top White House officials didn't like the liberals' proposals, but felt they couldn't just sit back and do nothing. The new plan was a compromise.
Those supporting the new Carter plan argue that the notion of business-labor-government talks already has proved its worth. Administration officials openly concede their proposal was patterned after the private Labor-Management Committees run for several years by former Secretary of Labor John T. Dunlop. "This is pure John Dunlop," one onlooker says.
Dunlop's approach - getting all three sides to sit down behind closed doors and work out private agreements on work rules and other cost factors - admittedly has had some success. The Harvard professor's most notable victory was in helping to slow construction wages in the early 1970s. The results of his other attempts at these industry committees, however, have been mixed.
But there were some important differences between Dunlop's efforts and the plan for periodic talks that the administration is proposing now. For one thing, Dunlop's groups always have been rigidly organized - a single committee of carefully picked labor and management chiefs who sat continually to deal with all issues on the agenda.
Both sides were there voluntarily (often, the group was set up in the first place at industry and labor request). And Dunlop has proved a master at cajoling opposing groups to agree on a compromise. As a result, he was able to exercise some clout in these bargaining sessions - and to keep the discussions under control.
By contrast, the plan outlined by the administration envisions inviting different groups of business and labor leaders to attend discussions on their own particular industries - with no single formal structure, or even an agenda. Not all the participants would be from the top ranks of industry or government. There's not even a single White House group to take on the job.
(Officials insist the discussions won't deal with specific wage or price-increase proposals - just suggestions on how to cut production costs, such as changes in work rules or company policies. In return, the business and labor representatives would get a chance to complain about government regulatory policies that contribute to inflation.)
Moreover, although there's a chance these discussions could lead to some cost-cutting steps, there's a serious question of whether it's good public policy to carry on a program that involves secret negotiations with so many industries. If the Phase 2 wage-price controls were unworkable, at least they were out in the open. People had a feeling they knew where they stood.
Finally, critics of the Dunlop approach complain that it too often results in the committee dividing up the spoils among the major participants at the expense of smaller businesses and unions - "giving the lion's share to the lions," as the late Kermit Gordon, former Kennedy administration economist, used to put it. That, too, may be a luxury government cannot afford.
Meany's complaint that Carter surprised him with "guidelines" is another matter. When Carter first broached the principle of "deceleration," naturally the first question was "deceleration from what?" Instead of using the vague 6 percent underlying rate, aides referred to the average increases for 1976-77. "We thought it'd be more flexible," one official said.
Whether that constitutes a "guideline" is open to argument. Certainly the administration had to provide an answer for the question "deceleration from what?" And citing a two-year average as a standard seems no more ferocious on the surface that simply answering: "From what's going on right now."
On the other hand, Meany is aware of history. The Kennedy administration's formal wage-price guideposts began in just such a quiet way: The White House first asked only that wage increases not exceed long-term productivity gains - without setting specific numerical standards. Later, as special problems arose in individual industries, it was forced to turn to formal guideposts.
Labor knows from experience that no matter how policy makers try to shroud it, such wage-price programs almost always are aimed mainly at wages. The Kennedy guidelines were. The Nixon Phase 2 and Phase 3 programs were. And the Carter program is. To labor, Carter's new program actually is a second step toward controls - it's a tougher version of the program Carter proposed last April.
To be sure, the administration may be able to but some time - and get key business and labor leaders at least thinking about slowing wage-price increases -before next year's bargaining begins. The Teamsters' union is scheduled to begin serious negotiations late in November. And the calendar gets even heavier early in 1979.
The most immediate question is, will labor actually sabotage Carter's plans for these continuing labor-management talks or simply allow the program to fizzle? The betting is that Meany will hang on at least for a little while - he's counting on the President's help in pushing through the labor law "reform" bill and other key legislation. But how long after that?
Critics fret that Carter's new program is so weak that if Meany does choose to call the administration's bluff, the President either will have to abandon his present plan or turn to new, tougher proposals - such as guidelines. And Carter is viewed by business and labor as just unpredictable enough to "hang tough" if he's challenged.
In the meantime, the administration now is faced with the job of how to carry out the program Carter has outlined - both from a political standpoint and a technical one. Most outsiders still believe they ultimately will be proved right that the President has brought forth a mouse. They just want to be sure the next noise they hear won't be a roar.