President Carter, contrary to earlier public statements on the subject, has not ruled out the possibility of an increase in federal welfare expenditures as part of a welfare revision proposal, it was learned yesterday.
In May, when the President announced 12 principles on which he will base his plans for welfare revision, the first was that there be no higher initial cost than under the present system. His public statements since then have reinforced the view that he would impose ceiling on welfare spending.
But yesterday, Carter's insistence on no increase in welfare spending was described first and foremost as an analytical tool, designed to force administration welfare planners to come up with the most effective uses of the money now allocated to welfare programs.
The President held two or three meetings with, top administration officials before convincing them he meant business in ordering the spending limit. But in doing so, he was said to be aiming largely at imposing some discipline on those preparing the welfare plan, preventing them from proposing solutions to welfare problems simply by spending more money.
Such an approach would not rule out an increase in welfar spending should further studies show that it was justified. At the same time, however, Carter's stated determination to balance the federal budget by the 1981 fiscal year is likely to work against significant welfare spending increase.
Meanwhile, it was also learned yesterday from administration sources that the President is developing his own standby gasoline rationing plan to replace one left over from the Ford administration which he considers inadequate.
Carter met yesterday with his chief energy adviser, James R.Schlesinger, and ordered him to develop legislation to eliminate certain restrictions on the President's authority to impose gasoline rationing.
Administration sources said rationing would be imposed only in the case of an emergency, such as another Arab oil embargo, and not as a means to force conservation to meet Carter's 1985 energy goals.
The President already has the authority to impose rationing after declaring a national emergency. Although Carter has set no deadline for it, the plan now being develop in the White House will be made public and presented to Congress when completed, along with legislation to remove those restriction the President wants to eliminate.
Talk of gasoline rationing has cropped up periodically in recent weeks and is viewed by some as a device the administration hopes to use in pressuring Congress into accepting the major componnents of Carter's energy program.
In addition to the rationing and welfare revision proposals now being developed, the administration is working on a tax revision plan to be made public by September. Among major options under study in connection with that plan are:
Imposition of a minimum tax on all persons with incomes above a certain level, not yet decided.
Elimination of the preferential tax treatment of capital gains. Now, half of a capital gain is taxable.
A reduction in the overall federal income tax rate by 30 to 40 per cent, with an accompanying elimination of loopholes to maintain federal revenues.
Imposition of limits on the amount of home mortgage interest expenses that are allowed as deductions.
A lowering of the corporate income tax or an end to "double taxation" under which corporation incomes and devidends are taxed.
It was also learned yesterday that, despite speculation to the contrary the President does not expect to meet soon with Soviet President Leonid I. Brezhnev, because Brezhnev wants such a meeting to take place after the details of a new strategic arms limitation accord have been worked out.
Carter yesterday received a letter from Brezhnev, a reply to one he had earlier sent to the Soviet leader, apparently ruling out an early meeting. Carter has said he would like a "get-acquaited" session with Brezhnev regardless of the progress in the arms talks.