Three House Democrats proposed yesterday that Congress instruct the Federal Reserve Board to ease its money policy in a budget resolution that also would include measures to reduce federal deficits substantially in 1983 and later years.
A House Budget Committee aide said there may be support on the committee for including a reference to money policy in a budget resolution.
Congressmen hope that, if they raise taxes and cut spending this year to bring down the huge federal deficits now in prospect, then interest rates will fall sharply. However, some believe that, for rates to fall sufficiently, the Fed will have to ease its money policy.
Reps. Henry S. Reuss (D-Wis.), Morris K. Udall (D-Ariz.) and George Miller (D-Calif.) suggested in a letter yesterday to the chairmen of the House Budget and Ways and Means Committees that the 1983 budget resolution in both houses should instruct the Fed to announce new, less-restrictive targets for money growth.
Budget Committee Chairman James R. Jones (D-Okla.) said earlier this week that he hopes the committee can "give some direction to the Fed as part of this budget resolution." He told Budget Director David A. Stockman that he hopes the administration will support this idea, but Stockman side-stepped his remark.
The budget committee aide said he believes there may be problems with the language proposed by Reuss, Udall and Miller, but said, "The notion of there being some reference to money policy in the resolution is not out of the question."