In economic policy making, as in gourmet cooking, the most tempting recipes sometimes are the most exotic-sounding. A spurt of cognac over lean fresh ham, done the right way, can work out well on balance. And if you're out of white pepper and pulverized herbs, a healthy mixture of nutmeg, thyme and other spices can make up the difference.
So it's not too surprising that in their quest to work out the nation's delicate domestic and international economic problems, top administration officials should be mischievously eyeing a stewpot combination: A proposal to use revenues from the crude oil tax President Carter wants included in the energy bill to help finance a congressionally-sought reduction in Social Security taxes.
Carter hasn't formally endorsed this bizarre blending. Publicly, he still is staunchly for the crude oil tax and against any cut in Social Security taxes. But he and top administration officials have been hinting privately they'd willingly swallow the combination if it ever came out of congressional kitchens. Indeed, the president has told House leaders it would be the only Social Security tax cut plan he'd find palatable.
At first glance, the recipe seems workable, if somewhat strange. The White House badly wants the crude oil tax, which has been held up for months in conference committee. And Congress is pushing for a rollback in Social Security taxes, which the president opposes. Mix thoroughly, add a dash of election year rhetoric, and everybody's happy. And Carter's much-ballyhooed tax reduction and "reform" package is kept intact.
There's no doubt that some sort of crude oil tax is needed. The measure is the only really effective one in Carter's energy package, and its enactment almost certainly would bolster the sagging dollar. And a good many economists can make a solid case for rolling back Social Security taxes. For one thing, the move would help slow inflation.
Backers argue that linking the two proposals would have one major advantage: It might possibly persuade some members of Congress who want to cut Social Security taxes to push for the long-stalled crude tax - unbottling the key provision in the year-old energy bill. Without any outside boost, the crude oil tax now seems unlikely to pass - with prospects dimming every day.
The difficulty is, while the ingredients may seem tempting enough separately, analysts say blending them together has some serious flaws from an economic standpoint that are likely to leave a bad taste for years. "This proposal has been around here for several weeks now, and it hasn't improved any with age," observes one key official involved in the planning.
Economists cite these considerations:
The two proposals are basically incompatible as a financing scheme because oneis designed to take in gradually less and less revenues over the years while the other requires increasingly large infusions of funds. Within a few years, the revenues would disappear entirely, while the need for financing would be greater than ever.
The crude oil tax is designed to make up the difference between present domestic oil prices - which are being held down by controls - and the world price, which now is substantially higher.Unless world oil prices soar unexpectedly, the crude oil tax is supposed to decline as domestic prices gradually rise.
At the same time, the growing Social Security system would need more revenues over the years. There's almost certain to be a clash.
Contentions that the scheme might work out temporarily - perhaps for a year or two, until something else can be worked out - tend to overlook political realities. The oil industry, for example, has been lobbying heavily against any such melding - for fear that once the crude oil tax were linked to the Social Security program, it would never be eliminated. Many analysts see some logic that fear.
Even if both measures were passed, there aren't enough revenues left in the crude oil tax to finance any significant segment of the Social Security trust fund. A good portion of the planned crude oil tax receipts already has been spoken for - earmarked for everything from research and developments to home insulation.
And Sen. Russell B. Long (D-La.), chairman of the Senate finance Committee, has said if a crude oil tax is passed, he wants a major share of the revenues to be "plowed back" to the oil companies for new exploration. The current dickering over a possible linkup with Social Security seems likely only to postpone the day of reckoning on the crude oil tax.
The linkage would set a precedent for crazy-quilt financing of the long-cherished Social Security system, making it dependent on all sorts of taxes rather a permanent - and reliable - revenue source. Removing the Medicare and disablity components of the program and financing them with general income tax revenues is one thing. But analysts find it difficult to understand how Carter can be wary of that plan and not even be more nervous about the crude oil tax link.
Perhaps most important, economists say the linkup would get in the way of any serious efforts to help the ailing Social Security system by revamping its benefits formulas - a step that fiscal analysts, and many lawmakers, say is necessary before the trust fund can be financially sound again.
The big problem facing the Social Security today is that Congress has loaded it with cost-of-living adjustment formulas that commit the government - years in advance - to paying far larger benefits than the system will be able to support.
Analysts say muddling the problem with a new - and itself shaky - source of financing can only get in the way of rational decision making over the issue. The need to raise domestic oil prices to world price levels is hoped to be only temporary. But the problems of Social Security financing are not.
Finally, there's no guarantee the crude oil tax would pass, even if Carter did come out publicly in favor of using it to finance a rollback in Social Security taxes. Congress seems bent on reducing payroll taxes anyway - oil tax or no oil tax - and most likely will do so.
Whether for good reason or not, the crude oil tax has had little support in the conference committee that is considering the energy bill, and there's no overwhelming evidence it would pick up any more if it were linked to Social Security. Indeed, Long, for one, is reported to have told the administration privately last week he wouldn't have the votes to clear the crude oil tax even if the Social Security plan came through.
What Carter does have to help prod Congress into enacting the needed crude oil tax is the threat that he will impose an oil import fee on his own if the lawmakers don't clear the measure soon - a step most analysts regard as far more sensible and more effective in reducing oil consumption if the energy bill doesn't pass.
The president is expected to allude to this prospect in his speech Tuesday on energy, inflation and the dollar - though aides say they still aren't sure whether he'll raise the prospect bluntly, as some advisers want him to.
Meanwhile, the administration seems to be playing the issue both ways. In an apperance before a Senate Finance subcommittee last week, Secretary of the Treasury W. Michawl Blumenthal publicly reiterated the administration's official position that the crude oil tax passed and is against any change in last year's Social Security tax hike. But he left the door open to linking the two, saying if Congress passed such a measure, Carter would "consider" it.
Insiders say Blumenthal equivocated on the issue only on orders from the White House.Privately, the Treasury chief is said to think linking the two proposals is patently a bad idea. Instead, he's urged Carter to impose an oil import duty if the energy bill isn't cleared by May 1.
But the message Carter is passing on the lawmakers privately apparently is quite different - confirmed both by administration officials and key congressional leaders.
The question is whether that approach would be mixing apples and oranges, which hasn't always been regarded as a very tasty dish.