White House anti-inflation czar Robert S. Strauss said yesterday President Carter should adopt "the toughest possible" wage-price program he can, and not listen to those who contend it would hurt him politically.
At a breakfast meeting with reporters, Strauss said the "best politics" for Carter would be to propose "a tough, tough, do-able program" that asks "significant" sacrifices from all sectors of th economy.
"I think if he came up with a year of national denial, of national austerity, the public would buy it, business would buy it and labor would buy it," strauss said. "The president has to lay it on the line.."
Strauss' remarks essentially countered those of another White House official on Monday who cautioned that a stringent guidelines program might prove Carter's political "undoing," and urged the plan be weakened.
The developments came as Secretary of Labor Ray Marshall, trying to assure organized labor, yesterday told a steel workers' union convention the administration's new wage-price program won't burden labor more than other groups.
Meanwhile, the Agriculture Department predicted that food prices will rise by between 4 and 5 percent next year - well below this year's expected pace - in the wake of a bumper crop in grains and other commodities.
Marshall's remarks were intended to soothe apprehensions of union leaders following a warning by AFL-CIO President George Menay on Monday that labor would not cooperate with a guidelines program that did not hit business as well.
President Carter is scheduled to address the same convention, in Atlantic City, N. J., today. Aides said they expect Carter to call generally for "sacrifices" by business and labor, but not to discuss any specifics.
However, Marshall cautioned the steel workers yesterday that no matter how the wage-price program turns out, there will be strong public pressure to hold down wage increases of big unions, if only because they are so visible.
Carter began an initial review of some of his advisers' recommendations yesterday. The guidelines program has been awaiting his return from the Camp David summit.
The president's economic advisers have recommended a voluntary wage-price guidelines program, to be enforced by informal government sanctions designed to pressure unions and corporations that violate preset standards.
Strauss conceded yesterday that "nothing" in the new program "is going to work unless we have the cooperation of labor," but asserted that despite Meany's warnings, "I think we're going to get it."
He also suggested that the president consider calling a small group of business and labor leaders to Camp David - in the wake of the Middle East summit - to work out an agreement on some sort of guideliness program.
However, Strauss cautioned that the proposal was "just an idea" he mentioned to his wife, Helen, "after I had two martinis," and that Carter hadn't heard it yet. "Don't make a big deal out of it," he told reporters.
The Agriculture Department forecast on food prices was substantially below the increase that private economists are predicting for 1979.Most now believe supermarket prices will jump by between 7 and 9 percent next year.
However, Howard Hjort, the department's chief economist, said the key would depend primarily on how quickly pork and poultry supplies can be increased, to help offset expected declines in marketable beef.
The department frequently ends up revising its forecasts by substantial amounts, depending on adverse weather and other factors. Hjort said for 1979 there were "uncertainties . . . in all sectors of the food system."
Strauss also confirmed yesterday that Carter is considering a significant cut in spending for fiscal 1980, and possible vetoes of several of this year's spending bills.
While declining to list which measures Carter would reject, the wage-price czar said the public works bill now under consideration "is the most abvious one." He also urged passage of hospital cost-containment legislation.
In his speech to the steel workers yesterday, Marshall told the group that "we have no intention of making some sectors of the economy bear all the sacrifices to make this program work."
However, the secretary urged union leaders to assess the administration's new program "in the context of the economic and political realities which face the country today" - including public "perceptions" of big wage increases.
Marshall said the widespread coverage given major labor negotiations "helps create the public impression that unions trigger inflation." He said that "helps underline the important stake that labor unions have in fighting inflation."