Although President Carter was rescued from error by House Speaker Thomas P. O'Neill at a crucial moment in the energy war between the White House and Congress, the administration's tendency toward overkill to sell its case continues to boomerang.
O'Neill's rescue of Carter the day after a House Commerce subcommittee voted to deregulate natural-gas prices was sucessful as far as it went. Alarmed that the President had decided to go "live" to the country over nationwide television on the morning of June 10 to lambaste that subcommittee decision, O'Neill quietly and correctly advised against it. There was much that would happen before Congress came even close to final action on gas deregulation - and a score of only marginally less important energy decisions. O'Neill told Carter: Cool it, for God's sake, and save your ammunition.
The President cooled it - but not before instructing his press secretary, Jody Powell, to read the same riot act that he himself had planned to deliver on television.
Powell seized the occasion with relish, not only blasting Congress for caving in to the oil lobby but also for costing taxpayers "a paltry $71-billion rip-off."
When the front-page banner headline appeared in The Washington Star a few hours later - "Congress Caves in on Energy, Carter Says" - presidential aides started beating a retreat. Waiting to tape a Chancellor-Brinkley interview on the battle with Congress for that evening's NBC news, Powell pleaded (wholly unsuccessfully) with NBC reporter John Hart: "Now don't say I was attacking Congress, because I wasn't."
But where had that "$71-billion ripoff" come from? It came not from Powell but from energy experts in the office of James Schlesinger, President Carter's energy chief. Instructed to make the worst possible case out of the deregulation bill then awaiting action by the House commerce subcommittee, these experts drafted two case studies purporting to show the huge cost of gas deregulation under two differing sets of circumstances.
"Case 1" showed a revenue increase to gas producers of $56.7 billion; "Case 2" an increase of $86 billion.
A document containing both "cases was rushed to each member of the House Commerce subcommittee 20 minutes before the vote on Rep. Robert Krueger's deregulation bill. It had little impact. Krueger's amendment carrying a 12 to 10 vote.
Krueger, a moderate Texas Democrat who earned an Oxford Ph.D. and who has become the acknowledged superexpert in Congress on gas and oil industries so important to his state, was first surprised - then angry. The cost allegations in the administration's two "cases" ignored the extra cost of gas to consumers under Carter's bill. That cost is conservatively put at $15 billion.
Before examining the rest of the data in the administration's documentation of the cost of his deregulation bill, Krueger bitterly complained to Schlesinger's office. That accounted for Powell's curious use of the "paltry $71-billion ripoff." He took the higher $86-billion cost estimate in "Case 2" and simply subtracted the cost of the President's partial decontrol program.
But the arithmetic used to project the cost of Krueger's deregulation bill to astronomical levels gets curiouser. For example, the administration's documentation appears to make an assumption that much if not most of the interstate (price-controlled) gas flowing through pipelines the day a Krueger-style deregulation bill became law would quickly rise to about $2.40 (per 1,000 cubic feet). Krueger claims, to the contrary, that nothing in his bill would permit abrogation of existing delivery contracts (some running for almost 20 years), which would continue to control the price for their lifetime.
That bit of administration arithmetic, Krueger says, is a mistake worth another $17 billion in Powell's $71-billion "ripoff."
Such claims and counterclaims may be par for the course in the high-stakes game of gas deregulation, but administration overkill is clearly damaging Carter in the eyes of Congress, and the President is clearly becoming aware of it. Thus, while his energy experts spread fear about the Krueger bill on Capitol Hill, Carter has tamed his rhetoric - at least for now - and instead is making quiet telephone calls gently twisting the arms of House members to win key votes.
Such tactics may be esseential to overturn the gas deregulation vote in the full Commerce Committee in the next few days. That is O'Neill's advice, and the advice of insider O'Neill is beginning to count heavily with outsider Carter.