Labor Secretary-designate F. Ray Marshall told a Senate committee yesterday he thinks President-elect Jimmy Carter's economic stimulus package is too small and should be expanded to include more money for jobs.
In the first public sign of dissent from a Carter economic adviser over the two-year program of up to $30 billion in tax cuts and spending for jobs, Marshall said he believes the package is weighted too heavily toward tax relief at the expense of jobs.
Public works, housing construction and other programs that directly create jobs are more effective and less inflationary in cutting unemployment than tax rebates and reductions. Marshall told the Senate Labor Committee as it began hearings on his nomination - which even Republicans conceded would be confirmed without difficulty.
There is "very little rationale" for tax cuts to reduce unemployment, said the 48-year-old University of Texas economics professor. He said it takes $20,000 in tax cuts but only $5,000 in direct expenditures to produce a job.
Marshall told reporters afterwards he believes the package may be modified by Carter to provide more direct spending for jobs. He suggested at least another $1 billion to $2 billion for job-creating public works projects, for which Carter has recommended up to $4 billion.
As disclosed last Friday, Carter's package envisions $23 billion to $30 billion in tax relief and jobs-related spending over the next 20 months, with emphasis in the first year on a $7 billion to $11 billion rebate on 1976 federal income taxes paid by individuals.
Direct government expenditures to create an estimated 800,000 jobs would amount to $2 billion in fiscal 1977, which ends Sept. 30, and another $5 billion to $8 billion in the fiscal year starting Oct. 1.
The jobs program includes expansion of the public service employment program, which puts people to work on local government projects, from the existing 300,000 jobs to 500,000 jobs later this year and add to 725,000 jobs in 1978.
Its other major component is a doubling later this year of the present allocation of $2 billion for public works projects built by private contractors, with the possibility of another $2 billion in 1978.
The overall program also includes a permanent income tax reduction for low-to-middle-income taxpayers by increasing standard deductions and permanent tax relief for businesses by allowing them to claim about 5 per cent of their Social Security payroll taxes as credit against income tax payments.
The program was criticized earlier this week by the AFL-CIO as too small and too slow in its likely impact on the economy. The AFL-CIO had advocated a $30 billion spending program for this year alone.
Although Marshall had been described by Carter domestic policy aide Stuart Eizenstat as the principla architect of the jobs section of the program, Marshall told the committee he succeeded only partially in getting more jobs into the package.
Public works jobs could be expanded easily because they do not entail the administrative obstacles and delays posed by other jobs programs, Marshall argued, nothing there are already $24 billion worth of projects ready to go.
On other matters, Marshall, questioned sharply at times by Republicans, said he:
Opposed a blanket prohibition against striking by government workers (except for the military) but favored collective bargaining for them, suggesting such steps as fact-finding, mediation and binding arbitration as alternatives to walkouts.
Favored repeal of the controversial 14-B provision of the Taft-Hartley Act, which permits state right-to-work laws banning union shops, thus going a step beyond Carter, who has said he would sign such a repealer but not advocate it.
Supported increasing the $2.30-an-hour minimum wage but siad he is not perpared to say yet what the new minimum should be.
Intended to step up the Labor Department's probe of Teamster union pension funds, which some committee members charged has been tax, and agreed to members' demands taht he spell out before his confirmation how he will pursue the investigation.
Endorsed the common site picketing bill, vetoed last year by President Ford, under which a labor dispute with a single contractor could shut down an entire construction project.
Supported efforts to reduce the high unemployment rate for Vietnam veterans and enforce affirmative action programs for women as well as minority groups.