The Carter administration showed further signs yesterday that it now regards inflation - not unemployment - as the nation's number-one economic problem.
In testimony before a Senate Finance subcommittee, Treasury Secretary W. Michael Blumenthal said policymakers now believe no economic problem is more important than controlling inflation.
He said the administration is committed to slowing the wage-price spiral.
Blumenthal's comments appeared to mark a shift from the administration's previous posture. Until only recently, officials have sought to portray inflation and unemployment as equally important problems - carefully avoiding emphasizing one over the other.
However, the job picture has been improving recently, with the umemployment rate declining to 6.1 percent of the work force in February, from 6.3 percent in January and 6.7 percent last fall.
As a result, policymakers have been shifting their posture on the inflation-vs.-unemployment issue. Last week, Blumenthal told a newspaper editors' meeting that "inflation is the chief threat to our continuing recovery." Yesterday, he repeated that view.
Blumenthal's remark followed disclosure of a memo written by Barry Bosworth, director of the Council on Wage and Price Stability, complaining that the administration is not doing enough to combat inflation and suggesting added steps the president might take.
There was no immediate reaction to the Bosworth memorandum, but Treasury Department officials are said to be taking a dim view of one of his major proposals - to go along with a congressional rollback of last year's payroll tax increases.
Blumenthal made his comments at a hearing over a bill to raise the ceiling on the national debt. The present debt limit expires March 31, and the government cannot continue day-to-day borrowing without extended authority from Congress.
The House last week defeated a debt-ceiling measure in what was widely regarded as an election-year protest vote.The earlier version included a provision that would have scrapped the semiannual deby-ceiling approval ritual and made the limit part of the congressional budget process.
Yesterday, the House Ways and Means Committee approved a watered down substitue that would freeze the present debt limit of $752 billion until Aug. 1 - right in the middle of the primary election campaigns most members will face in the summer.
In his testimony yesterday, Blumenthal acknowledged that the 37 per cent wage increase granted coal miners in the recent settlement will place some upward pressure on consumer prices, but insisted it would not be likely to set a pattern for other major industries.
He also once again described maintaining a sound dollar as another top priority of the administration. The U.S. and West Germany announced on Monday, but the currency has continued todecline on the foreign exchange markets.