Treasury Secretary G. William Miller ruled out today any general tax cuts next year saying that such "stimulative action" would "merely feed the fires of inflation" in the wake of dramatic decisions over the weekend to tighten the reins on credit expansion.
"There is no demand from throughout the country for a tax cut . . .the people want fiscal responsibility and a balanced budget. . .they want big government under control and price stability," Miller told reporters at a news conference here.
At the same time, Miller said earlier in an address to a packed session of the American Bankers Association convention that the Carter administration is working on development of "incentives" to encourage savings and investment. Without a general tax cut, specific incentive to business could be accomplished through with devices as changes in depreciation.
More than 9,000 bankers and their spouses filled the main ballroom of the Hilton hotel here, spilling over into nearby corridors and adjacent rooms, as the bank leaders sought to here first-hand some details of sweeping government actions late Saturday to tighten credit.
They applauded enthusiastically when Miller promised continued surveillance of foreign exchange markets and "other complementary actions when and if appropriate. . .to maintain a sound dollar."
In both his speech to the ABA convention and a subsequent news conference, Miller sidestepped questions about the specific role of the administration in formulating the Federal Reserve Board policies announced Saturday -- boosting the discount rate by another full percentage point to 12 percent, adopting a new technical strategy of controlling money supplies and establishing 8 percent reserve requirements for certain bank liabilities.
But Miller did say the Federal Reserve had acted on its own, that the steps announced were "not dictated by foreign banks" and that the administration was "not in the dark" about what was happening. He described the anti-inflation program as a joint venture of the independent central bank and the Treasury Department.
The secretary declined, however, to be specific about what further steps are planned if the new moves to stem inflation are not successful. Miller and West German officials had told him at international banking meetings recently that they would take whatever steps are required for world currency stability, including 'close coordination of counter measures."
Miller's visit here today amounted to essentially a strong defense of the administration's commitment to whip inflationary expectations. He predicted there would be no credit crunch as a result of the new monetary restirictions and dismounted a suggestion that President Carter's expected campaign for reelection next year could be hurt by a deeper recession as a consequence of the new decisions.
There has been speculation that the German government might impose new restrictions on ownership of its currency by foreigners.
On the question of a general tax cut Miller asserted that members of Congress after recent forays back to their districts had returned to Washington with much less vocal support for the proposition.
In Washington Rep. James R. Jones (D-Okla), a key member of the House Ways and Means Committee predicted Congress was likely to enact a tax cut of $20 billion or more in the last quarter of 1980. He said a tax cut was unlikely during the current fiscal year unless "the bottom falls out of the economy.
On other subjects today Miller said:
The "time is ripe" to end interest rate ceilings for financial institution deposits.
It is time to authorize interest on checking accounts nationwide.
The Treasury Department will soon launch a drive to clean out unnecessary regulatory burdens.