Alfred E. Kahn, the nation's chief inflation fighter, said yesterday that he hopes to see small victories in the anti-inflation campaign in the next few months and that by next August the new program should have "observable" impact on the overall rate of price increases.
Kahn, testifying before a House Banking subcommittee, said that a "small or zero" increase in the price of oil by the major producing countries would be like a "small victory."
If I don't have things to show you by February, I'll be more than disappointed. I may take up my tenure at Cornell," Kahn said.
He has said before that he hopes his anti-inflation operation will convince the President to take steps such as vetoing legislation that contributes to price increases.
On Oct. 24, Carter proposed a several-pronged effort to stem inflation - including keeping the 1980 budget deficit under $30 billion and taking a careful look at the cost of regulation. But the heart of the program is a system of wage and price guidelines.
Those guidelines call for holding all wage and fringe benefit increases to 7 percent a year or less and ask companies to keep their price increases a half percent smaller than the average of their increases during 1976 and 1977.
The former chairman of the Civil Aeronautics Board, who has headed the president's inflation plan for less than a month, also said tha unions with ongoing contracts calling for wage and benefit increases in excess of 7 percent will not be eligible for the administration's proposed real wage insurance program.
That program, which is administration plans to send to Congress next year, is supposed to protect workers who conform to the President's 7 percent wage standard. If inflation exceeds 7 percent next year, workers will receive a tax rebate to cover the difference between the actual inflation rate and 7 percent.
Khan, in response to a question, said there will be no wage guarantees to "people who violate the guidelines or who did so in past settlements."
Nevertheless, the President has said that if contracts were signed before Oct. 24 - or if a firm management offer had been on the table - the administration wil not consider them in violation of the program.
Kahn told the subcommittee that while he would be happy to postpone the scheduled Jan. 1 increase in social security taxes, there is probably no way that it can be done.
He said if the tax increase were postponed, the Social Security system would have to dip into general Treasury revenues to pay some of the benefits and tnat would make it difficult for the president to achieve his goal of keeping the fiscal 1980 budget deficit under $30 billion.
He said it is not feasible to expect Social Security tax relief in the short-term, but noted that several administration task forces are studying ways that the rates might be reduced in the future.
Kahn also relterated the adminstration's stance that there would not be a recession in 1979 and said that he was misinterpreted last week when he said there would be a "deep, deep depression" if the anti-inflation program failed.
Kahn said he is not predicting a recession, but simply saying that inflation is such an important political issue that if the program does not work, the American people might demand very stringent anti-inflation measures that could seriously hut economic growth.es that could seriously hurt economic growth.