The AFL-CIO yesterday strongly denounced President Carter's proposed "real wage insurance" tax credit plan, asserting it would prove too costly and ineffective and would treat large groups of workers unfairly.
In testimonv before the House Wasy and Means Committee, Kenneth Young, the orgnization's chief lobbyist, complained the plan "contains too many flaws, inequities and complications to make it viable."
Meanwhile, Sen. Russell B. Long (d l/a.), chairman of the Senate Finance Committee, said his panel probably will approve "about half" of the $600 million in modest Social Security cuts Carter has proposed this year.
Long also raised the possibility of eventuaslly limiting Social Security retirement benefits to "minimum" levels now paid to persons earning $15,000 a year. Those who wanted larger pensions would have to get them privately.
The AFL-CIO's sharp criticism of the real wage insurance plan was a setback for the White House. Although AFL-CIO leaders never have been enthusiastic about the measure, yeaterday's testmony was more stridnet than expected.
Rep. Barber B. Conable (R-N.Y.), ranking minority member of the committee, termed the criticism "quite significant" because it was mainly to help win labor's backing that the White House included the plan in its wage-price guidelines program.
Nevertheless, committee sources said yesterday the testimony did not necessarily alter the proposal's already uncertain prospects. While Yound criticized the plan, he also agreed to help "work... to correct the inequities."
Supporters of the Carter measure say they now have the backing of approximately half the panel's 24 Democarats. The administration is expected to try to lure more votes next week.
Rep. Al Ullman (D-Ore.), chairman of the panel, reportedly gave a fairly optimistic assessment of the plan's prospects in a meeting late Wednesday with President Carter, hinting the plan may pass because the panel has no alternative.
Meanwhile, Long declined yesterday to take a position on the real wage insurance plan, saying only the Finance Committee will "consider it" if the proposal is passed by the House and will "forget about it" if it fails.
The AFL-CIO's opposition was joined by the National Association of Manufacturers and the U.S. Chamber of Commerce, both of which already had expressed disapproval of the taxcredit proposal.
Long's comments on Carter's proposed Social Security cuts came in an interview with a group of reporters. His plan to act on the proposals this year came in contrast to that of Ullman, who has ruled out action in 1979.
The Finance Committee chairman's plan to limit Social Security retirement benefits came as part of a longrange proposal to repeal Social Security payroll taxes, cut federal income taxes and replace them with a valueadded tax.
Long said he thought it would be wasteful, in the face of such a massive overhaul, for the government to continue paying retirement benefits hinged to higher-income levels.
He said middle-and upper-income persons who wanted retirement benefits in excess of a basic level could obtain them through private pension plans or employe stock ownership plans. But he plans no action for 2 or 3 years.
Long also threw his backing behind efforts by some taxpayer groups to push through a constitutional amendment that would limit the maximum rate on federal income taxes which now is 70 percent, to 33 percent.
And he said he thought if the nation does shift to a value-added tax -- a form of European-style national sales tax -- it should impose the tax on everything, rather than exempting food and clothing to ease the burden on the pool.
The AFL-CIO criticism of the real wage insurance plan essentially paralleled that of most other labor groups. The federation sought guaranteed taxcredits for low wage workers and objected to exclusion of some other goups.
Labor's reaction to the plan so far has been mixed. While the AFL-CIO opposes the measure, the United Auto Workers and American Federation of State, County and Municipal Employees have endorsed it.