The Reagan administration soon will remove price controls on gasoline and crude oil and will impose a broad freeze on new federal regulations wherever it can, President Reagan's choice for budget chief, David A. Stockman, predicted yesterday.
"We're going to freeze everything we legally and technically can," said Stockman, speaking of the new administration's campaign against federal regulation.
Stockman, awaiting Senate confirmation as director of the Office of Management and Budget, said no decision has been made yet on decontrol of oil and gasoline, but he noted that Reagan and top members of the new administration made clear commitments to decontrol during the campaign. He told an audience at the National Press Club that they should "assume those commitments will be implemented shortly."
Immediate decontrol could add 12 cents a gallon to gasoline prices at the pump, an increase that would occur gradually if Reagan permitted price controls to phase out between now and Sept. 30 as present law provides. However, Reagan advisers believe the federal energy controls have discouraged explorations and disrupted the distribution of gasoline during shortages, and they are determined to do away with them as soon as possible.
At several points in his speech, Stockman sought to defend the Reagan administration's intention to ask for a large, multiyear cut in personal and corporate taxes -- a move that threatens to worsen the federal budget deficit and thus add to inflationary pressures.
In the Reagan economic package to be offered in about three weeks, tax cuts will be balanced by "major surgery" on domestic spending programs, "almost across the board," he said.
The Reagan administrations's goal will be to reduce total federal spending over the next five years, Stockman said. "There will be no increase even for the inflation that occurs each year . . . ." he said.
Stockman didn't disclose the magnitude of the tax and spending policies designed to "shock and shift the economy on a different path." He suggested that, despite the misgiving about the Reagan tax policy in some quarters, the administration has no choice. "An economic plan that is based on temporizing . . . or gradualism is simply a recipe for certain policy failure," Stockman said.
The sharp cuts in federal spending that the Reagan administration wants, would, if approved by Congress, make it easier for the Federal Reserve Board to control the growth of the money supply more closely and, in Stockman's view, that is the key to reducing inflation significantly over the next two or three years.
The administration will "throttle back" on the Energy Department's synthetic fuels program, public sector jobs programs "and some of the lavish subsidies for business and agricultural groups," Stockman predicted. Many long-term capital spending programs will be delayed and "stretched out," he said, although he tempered his earlier predictions of cutbacks in the space program, defending it yesterday as a valuable contributor to American technology and a source of inspiration to the public.
He confirmed reports that the Reagan administration will try to cut the so-called "entitlements" programs for aid to individuals by making higher-income recipients ineligible for assistance. The current program of extended unemployment benefits is targeted for a major change to bar payments in states with low unemployment rates, he indicated.
Price controls on U.S.-produced crude oil and gasoline are due to expire Sept. 30, and a Reagan administrations decision to decontrol in February would permit an increase in gasoline pump prices of 10 cents to 12 cents a gallon if competitive conditions permit service station operators to pass along the full amount.