A Carter administration study group is preparing to recommend adoption of a toughened, three-part voluntary anti-inflation program that includes economywide wage and price standards to be "enforced" by a variety of government carrot-and-stick measures.
Although details have not yet been ironed out, the subcabinet-level task force reportedly has agreed on the thrust of the recommendations, with plans to discuss them early this month with labor and business leaders.
The program would be designed to hold wage increases next year to somewhere around 8 percent - a move aimed at slowing the underlying rate of inflation to between 6 and 7 percent, down from nearly 8 percent a year now.
Officials say President Carter could announce the new program as early as the end of this month. However, they again stressed that the program would be voluntary, and would not involve mandatory wage and price controls.
The plan under consideration reportly includes:
Voluntary wage and price standards for all workers and businesses, including those where union contracts are not involved. Officials apparently are undecided about whether to establish specific numerical wage-price guidelines or set more general standards that would effectively produce the same limitations. However, one plan would establish a limit of 8 percent for wage increases next year, and ask businesses to pass on any cost savings to consumers by holding profit marmins level.
The program would be "enforced" on a case-by-case basisby White House moves to alter government policies to exert pressure on offending businesses or unions. In one recent action being cited as an example, the Council on Wage and Price Stability moved to head off sharp increases in wages by asking the Interstate Commerce Commission not to allow truckers to raise prices to cover Teamster wage hikes. The government has a variey of other actions available from withholding construction contracts in high wage areas to altering its new "tigger price" system for the steel industry or possibly even encouraging consumer boycotts.
Some sort of proposal for using the tax system to help prod businesses and workers to comply with the voluntary guidelines, either by penalizing violators with tax hikes or rewarding others with a tax reduction. Although planners still have not agreed on a specific preposal in this area, insiders say there now is widespread support for the notion among top strategists, including key White House aides.
The administration also is considering a move to propose guaranteeing workers an automatic income-tax cut next year if the inflation rate doesn't drop to a preset level, as a form of insurance for unions that members will be covered.
There also is some support within top policymaking circles for a plan to delay next year's scheduled increases in Social Security takes and the minimum wage, both of which would add to labb costs and spur inflation.
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Under this plan, however, the administration would not intervene directly, but would voice its displeasure at a contract privately, outside the bargaining process. The difference may seem semantic but is regarded as important.
In general, the new standards being considered would ask businesses to moderate price increases in line with the slowdown in labor costs resulting from smaller wage increases accepted by workers.
The aim would be to stiffen the determination of employers to resist excessive wage demands. Officials say they probably would acept higher price increases in cases where supply shortages exist.
Officials stressed that while the subcabinet-level task force generally is agreed on the major elements of the program many of the specifics - from the guidelines to the tax-cut proposal - are undecided.
Planners are scheduled to show a rough draft of the plan soon to labor and business leaders, and then send it to the president for final action. Carter's expected to review the proposals after this week's Mideast summit.
Adoption of the new plan would be the administration's most visible step yet in combating inflation. The White House has run throught three abortive anti-inflation programs, including a jawboning effort begun a few months ago.
Policymakers earlier had predicted that prices would edge up only slightly more this year than they did last year, but in recent months the inflation rate hasworsened substantially, outstripping even the most pessimistic forecasts.