President Carter conceded yesterday the economy probably will grow at a very sluggish pace next year, but he insisted "I don't think we will have a recession" as some economists have predicted.
In his press conference, Carter said he would choose to be a one-term president if necessary to carry out his new fight against inflation, but indicated he believed the anti-inflation effort would also prove to be good politics.
Carter also declared he was "satisfied with" the way his new wage-price guidelines program is going, despite some reports that it has run into some difficulties in getting started.
And he said he intends to boost the defense budget by somewhat more than is needed to offset inflation.But he avoided promising to fulfill a pledge last year to U.S. allies to increase defense outlays by a full 3 percent after inflation.
In discussing the economic outlook, the president conceded that "our real growth rate will be reduced some what" next year to "maybe below 3 percent" -- the same figure his economic advisers have used.
A growth rate that sluggish would not necessarily mean the economy was in a recession, but only that output was not rising rapidly enough to keep the unemployment rate from increasing.
By contrast, several leading private economists have forecast that the economy will grow at only a 2 percent pace or less next year. Some forecasts predict there will be at least six months in which output declines -- technically a recession.
On related matters, Carter also:
Asserted his administration already has streamlined the federal government "considerably," although there are now 6,000 more U.S. employes than when he took office. He blamed the rise on congressional increases.
Said he did not veto the tax bill in September even though it might have helped to slow inflation because a veto "would have added a tremendous additional tax burden on our people and restrained greatly the normal [economic] growth."
Insisted that Americans still would prosper despite the sacrifices he is asking of workers and businesses in his anti-inflation program. "We don't anticipate a recession or depression next year," he said.
Carter's remarks on the economy came as Charles L. Schultze, chairman of the Council of Economic Advisers, predicted that despite this week's glum inflation figures, prices will begin slowing "probably before the middle of 1979."
In a speech before the Pittsburgh Chamber of Commerce, Schultze said, "we ought to see some leveling off and edging downward of the inflation rate" by the middle of next year. He also denied that Carter was seeking mandatory wage and price controls.
The Labor Department reported Tuesday that consumer prices rose a sharp 0.8 percent again in October, disappointing administration analysts, who had been hoping for some easing.
Alfred Kahn, Carter's anti-inflation czar, told a luncheon group that day he did not expect to see any quick improvement. He predicted the inflation rate may diminish "in nine months" or so.
The dispute over the defense budget involves a pledge Carter made to U.S. European allies last year to boost military spending each year by at least 3 percent after adjustment for inflation.
The president earlier this fall had given the go-ahead for the full 3 percent increase, but since has come under pressure from liberal groups who fear the rise would squeeze out monies for traditional Democratic social programs.
Earlier this week, the White House hinted strongly that Carter was reconsidering his initial decision, and sources said most of the president's top economic advisers were urging him to trim the increase in defense.
Carter carefully avoided committing himself on the issue in his answers yesterday. Aides have indicated the president may make a decision within a few days.
The president's commitment to keep up his inflation fight came in response to a question on what Carter would do if he were faced with a choice between continuing his wageprice efforts and becoming "a oneterm president."
"I would maintain the fight against inflation," he said. Then, referring to complaints about his budget-cutting, he added: "I'm beginning to see more and more clearly how difficult that will be, but I intend to do it."
Carter also insisted that changes his policymakers are considering in the way wage and price increases are computed for the new guideposts program do not represent any change in his guidelines.