President Carter's voluntary anti-inflation plan, which will depend for its success on business and labor cooperation, had neither yesterday. It drew fire from both sides.
Administration officials insisted that the plan will survive its initial frosty reception by both the AFL-CIO and the U.S. Chamber of Commerce, but said one of the Carter inflation-fighters: "It's going to be more difficult."
The irony of the administration's plight is that it must rely on voluntary support from business and labor because of its reluctance to invite their wrath by imposing mandatory controls. But voluntary support melts as soon as the administration mentions any specific anti-inflation bench-marks or standards.
It was one such proposed bench-mark - keeping wage and price increases below their previous two-year average - that got the White House into trouble with AFL-CIO head George Meany.
What the administration did in its economic message to Congress Friday was to ask for advance discussions of major wage and price increases and to urge that any increases in 1978 be kept below the average rate of increase that each industry experienced in 1976 and 1977.
It called this a "standard of hebavior" and a "voluntary deceleration standard." But labor and business called it a guideline or, in effect, controls.
"The President merely plays on words when he states 'I do not believe in wage and price controls,' and then initiates wage and price controls," said Jack Carlson, chief economist for the U.S. Chamber of Commerce.
Both business and labor will become concerned about being "locked in" to certain wage and price levels and so "rush to increase prices and wages wherever possible before controls are made mandatory," thus creating more inflation and more pressure for mandatory controls, said Carlson.
AFL-CIO President Meany, who rarely agrees with Carlson on anything, agreed on this point. "Guidelines, in any form, are, of course, a step down the road toward controls," said Meany.
His reaction illustrated both the prickly sensitivity that many in labor and industry have developed on the subject of wage-price guidelines and administration's apparent failure thus far to deal effectively with it.
According to both administraion and AFL-CIO sources, the two-year-average yardstick was not mentioned in a 16-page memorandum on the proposed earlier by Treasury Secretary W. Michael Blumenthal and Economic Council Chairman Charles L. Schultze.
"The first time we heard that was in the President's message on Friday," said an AFL-CIO spokesman.
"It was inadvertent," said a leading administration official. "We only put it in because we felt that a two-year average actually would mean more flexibility" from labor's point of view. It was actually an attempt to "soften" the impact of the suggested standard by making clear that a union or company would not be "penalized" for only one year's experience, said another official.
Administration officials said one bright spot from labor's point of view is that relatively few union contracts come up for renegotiation this year, and wage increase trends are decelerating slightly anyway. Thus the impact of a restraint effort would not be severe at the start.
Meany did not close the door to cooperating, saying he would be willing to meet to discuss problems of "mutual concern," and a top administration official telephoned AFL-CIO officials yesterday to reassure them that there had been no conscious effort to change the plan at the last minute.
Asked if Meany felt angry or betrayed, an ALF-CIO aide said "it's more concern than anger."
Added the aide: "Almost everyone over there [at the White House] believes in guidelines or guideposts, so you aren't surprised when they try to push one by.If they try to sneak one by, you just catch 'em and hold 'em."
This, in effect, is what Meany did last year about this time in rejecting an administration plan for prenotification of wage and price increases. Administration officials said the new plan calls for voluntary discussions of inflationary trends but does not evision advance notification of bargaining demands.