President Carter still believes it is "premature" to consider a major tax cut as an anti-recession measure, but has told key congressional leaders he will review the question against in October, according to White House sources
Carter also criticized a Republican congressional proposal for a $36 billion across-the-board cut in income taxes as too expensive and inflationary. Aides quoted him as saying it would be a "mistake" to move now to enact a tax cut.
The clarification came after presidential remarks to a congressional anti-inflation task force last thursday apparently caused some confusion about Carter's position on the tax cut.
Several participants said they heard Carter refer to the possibility of a $20 bllion to $30 billion tax cut if the economy slumps more deeply than now expected, with a presidential decision likely in October.
However, White House sources said last night that Carter was only relating recommendations that private economists had given his advisers earlier in the month, and was not trying to suggest that he favored the proposals.
Last night a high-level aide who said he checked with the president after the Thursday session quoted him as saying the administration would stick with its steady-as you-go policy and "not jump into a tax cut now."
"He said now was not the time to make any judgment about it and that he would take another look at the situation Oct. 1," the aide said. He said the private economists had suggested the possibility of $20 billion -- not a $30 billion -- reduction if the recession worsens.
The aide also confirmed that Carter had repeated his admonition that any tax cut measure be "noninflationary" -- in the form of a cut in Social Secutity taxes which also lowers business costs, or a revival of his "real wage insurance" plan.
"Real wage insurance," proposed last October as part of Carter's wageprice guidelines program, would have given workers a tax credit if they heeded the 7 percent wage standard. It was rebuffed by Congress.
Carter's Thursday remarks left some participants unsure just what he though, but most interpreted his words as leaning closer to a tax cut.
Most of the group had just finished urging White House aides not to propose a tax cut now.
Moreover, just the night before, the president had told a nationally televised news conference, in answer to questions about a possible tax cut, that "there is no free lunch" -- implying he thought such a move would "destroy out budget."
Ironically, Vice President Mondale, who also attended the Thursday meeting, ws said to have argued against a tax reduction. Mondale traditionally has been among the first in the administration to urge more economic stimulus.
The White House has been under pressure from Republicans, who have proposed a $36 billion tax reduction as a way to steal the Democrats' thunder. Sen. Lloyd Bentsen (D-Tex.) also has advocated a $20 billion tax cut.
Key administration planners say the president's top economic advisers have only casually discussed tax reduction prospects, with no serious prosposals near decision-point. The official White House stance has been to wait to see.
Congressional leaders opposing a tax cut included Reps. Al Ullman (D-Ore.), chairman of the House Ways and Means Committee and Robert N. Giaimo (D-Conn.), chairman of the House Budget Committee. CAPTION: Picture, REP. AL ULLMAN . . . tax writer opposes tax cut