Treasury Secretary W. Michael Blumenthal said today that the Carter administration's anti-inflation program will involve "neither direct controls nor indirect coercion" of business and labor. Rather, he said it will try to enlist labor, management, consumers and government in a "cooperative effort" to hold down inflation.
Speaking to a group of business leaders here, Blumenthal indicated that the administration has backed off from any assertive role in trying to limit wage and price increases, including proposals for "prenotification" of pending wage and price boosts or application of government "jawboning" pressure on business and labor.
Instead he outlined eight measures he said will make the anti-inflation program, details of which will be announced in a few weeks. These mainly emphasize structural changes in the way government affects the economy, such as a review of regulations that create bottlenecks.
But Blumenthal still left open the possibility that, short of a prenotification policy, the Carter administration will still try to consult informally with labor and business before a major new contract is negotiated or a significant price rise is put into effect.
The prenotification proposal was floated recently by the administration as a method of controlling wages and prices, but it met with sharp opposition from AFL-CIO President George Meany.
The Treasury Secretary said today he did not "believe that it is useful to waste our energies on fruitless argumnts about the pros and cons of imprecise concepts such as prenotification on wages and prices - voluntary or otherwise.
"What is there to argue about?" he asked. "The expiration date of the major labor contracts is a matter of public record. Doesn't this give all the prenotification neded?
"On the price front, I am equally confident that major U.S. industrial leaders, who see the importance of containing inflation as clearly as anyone, will, in the kind of cooperative program we plan to develop, weigh carefully and be prepared to discuss with us the implications of various price options."
In recent days there has been renewed concern that inflation is reaccelerating, that the Carter administration's program to stimulate the economy will worsen the situation and that no effective plan to moderate inflation has been put forward.
Blumenthal tried to reassure the group that "this is not an administration that talks about inflation but will do nothing about it," and went on to sketch the proposals that he said will be part of the anti-inflation program. These include:
"A prompt review of all government regulations which create bottle-necks, restrict output or are othrwise inflationary," including examination of the need for cost-plus contracts with companeis that do business with the government "which tend to reduce normal business cost-minimizing incentives." This would mainly affect defense contractors.
A policy on international trade "that provides help and protection to industries and workers hurt by imports, but does so in ways which do not result in inflationary price increases borne by the consumer." This would emphasize "structural reforms" to lower costs and increase productivity.
Introduction this eyar of a major tax revision proposal "designed to promote business investment to achieve increased productivity."
"A review of unnecessary and costly reporting requirements imposed on business by the government."
"An effort to create an effective system to analyze the economic impact of each major new federal legislative or regulatory effort."
Improvement of how the government's council on Wage and Price Stability operates, "not to control or coerce but to provide the data and the research to identify bottlenecks and economic problem areas ahead of time."