President Carter's budget director hinted strongly today that the goal of a balanced budget next year may have to be sacrificed in the battle for energy independence.
James T. McIntyre Jr., director of the Office of Management and Budget, told the opening session of the National Governors Association that the energy development program Carter is framing at the Camp David meetings "may mean foregoing or postponing for a short time the balanced budget, but in my judgment that is a tradeoff worth making."
Carter and McIntyre have been aiming at submitting next January a balanced budget for fiscal 1981, the 12 months to begin Oct. 1, 1980. Today's comments from the budget director were the strongest indication so far that the adverse energy developments of recent months may put that goal out of reach.
Carter had pledged during his campaign to balance the budget by 1980, but a year ago moved the deadline back to 1981.
McIntyre said in an interview after the session that "the economy is weakening," in large part because of the oil price increases imposed by the Organization of Petroleum Exporting Countries (OPEC). "That has caused us to revise our economic asumptions," which will be made public Thursday night when the administration submits its revised estimates for fiscal 1980, McIntyre said.
Jack H. Watson Jr., assistant to the president, told the governors that the administration now expects the size of the American ecnomy -- measured by the Gross National Product -- to drop 1 percent in 1979 and another 1 percent in 1980. Two consecutive quarters of economic decline are viewed as a recession.
The slowdown in the economy predicted by both men would reduce government revenues. But the OPEC price increases have fueled inflation and brought Carter to the point of recommending higher energy development expenditures than previously had seemed likely.
The combination of those factors, McIntyre appeared to be saying, is likely to make a balanced budget in 1981 impossible.
He stopped just short of making that as a flat statement, saying "that numbers are awfully close" and the outcome is not certain. But Mc Intyre told the governors that the president wants to put additional resources into energy development and "if we have to postpone a balanced budget to deal with such a national problem . . . . then that would be my recommendation to the president."
"My own personal philosophy and position is to try to balance the budget if we can," he said, "but not at the expense of risking the security and the energy self-sufficiency that we need for this nation."
McIntyre and Watson fielded questions from the governors for about an hour after Vice President Mondale, substituting for the president, had made a plea for national unity on energy.
Watson conceded to several New England governors that refineries are "running slightly behind" in building up distillate production to assure an adequate supply of home heating oil for winter. But he said the figures were being monitored closely and "we will do whatever needs to be done" to see that homeowners do not suffer.
Other governors pressed the two officials for early action on energy problems ranging from nuclear waste disposal and guaranteed supplies of disposal fuel for the autumn harvest to uniform truck weight limits on intersate highways and the speeding of a new pipeline from Alaska to the Midwest. The answers the governors received were sympathetic but noncommittal.
Watson did say, however, that Carter was considering asking Congress to create and "energy mobilization board," which would have authority to waive normal procedures and regulations to hasten the construction of high-priority energy projects.
And McIntyre suggested that the amount of money set aside from the purposed oil "windfall profits" tax to subsdize low-income users of fuel oil may be increased beyond the $800 million previously discussed.