The Carter administration yesterday declared that its stepped-up campaign against inflation has fared better in its first 100 days than many critics had predicted, though the battle is far from over.
"It is abundantly clear," Alfred Kahn, the president's chief inflation fighter, told a House banking subcommittee, "that people all over this country are taking the president's program seriously, very seriously."
With one week to go before large firms have been asked to file price and profit data with the White House, Kahn released a list of 206 firms that already have pledged to go along with the administration's voluntary wageprice guidelines. The pledges came in response to a letter sent by President Carter to the nation's 500 biggest companies asking for compliance.
Kahn also said that most recently negotiated major labor contracts have been within the 7 percent wage guideline.
But despite these encouraging signs, administration officials conceded they had yet to make much of a dent in the nation's inflation rate, which continues to run at over 8 percent on an annual basis.
"I have the strong impression," Kahn stated, "that the first stage of our program was easy compared to the job that lies ahead." He predicted "some bad news ahead" as a result of an "accumulation of past effects" and said he did not expect to see evidence of deceleration of prices until "late spring or summer."
To gear up for the administration's wage-price monitoring efforts, Kahn, who heads the Council on Wage and Price Stability, asked Congress for an additional 123 staffers and a budget next year of $8.5 million. The council currently has a staff of 110 and a budget of $1.7 million.
In addition, Kahn disclosed that President Carter would announce "before the end of this month" a program to enlist state and local governments in the anti-inflation battle. The program is expected to urge a modification of building codes and the easing of other regulatory activities by state and local governments.
The White House also indicated it would ask state and local officials to deny government contracts to firms that fail to comply with the wageprice guidelines.
It is this policy, which Carter has said he will enforce at the federal level, that the General Accounting Office called illegal Monday and that yesterday came under attack from the American Bar Association as well.
Echoing the GAO's position, the ABA's economic controls committee submitted a statement to the hearing blasting Carter's claim that the wageprice program is a voluntary one. The ABA said the program depends not on voluntary action but "rather on a fear of government retaliation against companies that 'violate' pay or price standards."
Kahn defended the White House program as "in a very large measure, voluntary" and he said Justice Department lawyers have asserted its legality.
Declaring that Carter's guidelines alone can't solve inflation, Kahn urged Congress to pass legislation that would put a lid on rising hospital costs. He also asked for enactment of the president's real wage insurance proposal, a plan that would provide limited tax credits to employes whose wage increases are held within the 7 percent guideline in the event the inflation rate exceeds 7 percent this year.
In related testimony before another House subcommittee, Internal Revenue Service Commissioner Jerome Kurtz said that if Congress enacts the wage insurance plan, the IRS will be able to administer it without "significant" difficulty, dismissing fears that the program could prove an administrative nightmare.
The IRS chief estimated the administrative costs of the program between $20 million and $40 million, most of which he said would be incurred during fiscal 1980 and fiscal 1981.