President Carter's proposal for a "real wage insurance" tax credit has received strong endorsement from 12 prominent Democratic economists -- including four former chairmen of the president's Council of Economic Advisers.
The group, including onetime presidential economic advisers Walter W. Heller, Gardner Ackley, James Duesenberry and Arthur M. Okun, has written a joint letter to the two congressional tax-writing panels urging prompt passage.
At the same time, the tax credit planis expected to be endorsed tomorrow by Douglas Fraser, president of the United Auto Workers union. Fraser will be the first major labor leader to speak out in favor of the measure.
The endorsements have been welcomed by the administration, which has been almost alone in suppporting the proposal over the last few weeks. The AFL-CIO has reacted unenthusiastically to the plan.
The House Ways and Means Committee is scheduled to be begin hearings on the tax credit proposal tomorrow, amid widespread expectations that the panel will scrap the measure entirely or expand it into a general tax cut.
Rep. Al Ullman (D-Ore.), chairman of the Ways and Means, has promised to give the plan a full hearing. However, Ullman told the Chicago Tribune in a tape-recorded interview that he thinks prospects for its passage are "marginal."
Carter's plan, designed to protect workers who agree to keep their wage demands within the new 7 percent guideline, would allow eligible workers a tax credit of 1 percent of their first $200,000 in wages for each percentage point that inflation exceeded the pay standard.
The plan was suggested by Okun and added to Carter's October wage price guidelines package as a last-minute sweetener for labor. However, critics have complained the proposal is too complex and would be difficult to administer.
In their letter to the tax-writing committees, the economists conceded the legislation would be complex, but urged Congress to pass it promptly to help bolster the guidelines program.
In addition to the four former council chairmen, the economists are: Lawrence R. Klein, Carter's former campaign adviser; David L. Grove, former IBM economist; Robert R. Nathan, a Washington consultant; George L. Perry, the Brookings Institution; James Tobin, Yale University; Robert M. Solow, Massachusetts Institute of Technology; Lloyd Ulman, University of California; and Sidney Weintraub, University of Pennsylvania.