The congressional Joint Economic Committee, warning that the recession may prove more severe than expected, yesterday called for a "careful reevaluation" of current economic policy, but stopped short of recommending a tax cut.
In its annual midyear report on the economy, the 20-member panel said that, despite the gloomy outlook, it continues to believe "a moderate amount of restraint is appropriate and necessary in the current economic environment."
However, the panel said with consumer and energy prices soaring, a Social Security tax increase on the horizon and inflation pushing taxpayers into higher brackets, Carter may have underestimated the impact of his austerity policies.
Because of these new factors, "economic policies are more restrictive than was anticipated earlier in the year," the document asserted. It said a "careful reevaluation" of administration policy now is in order.
The carefully hedged warning was the only short-range recommendation the panel offered in its report. In a departure from the committee's previous practice, the document contained no specific forecasts or policy prescriptions.
Instead, the panel devoted the bulk of its 173-page report to a detailed study of the economic problems it foresees for the next decade, stressing the need to spur capital investment to boost the nation's productivity.
However, even here the panel offered no specific proposals beyond a passing reference to pending legislation that would allow business a faster depreciation writeoff.
The report marked a second step in the transformation of the once decidedly liberal panel since conservative Sen. Lloyd M. Bentsen (D-Tex.) took over as chairman in January.
In its initial report last March, the committee broke with tradition by advocating a set of moderately conservative economic policies that gave top priority to fighting inflation and spurring investment rather than to averting a recession.
Bentsen said in an interview that the panel had decided to emphasize longer-range problems this time because of a feeling that "we shouldn't just be dealing with crisis-containment. That's the way too much of our policy is going these days."
Perhaps in part because of the absence of specific recommendations, the report was nearly devoid of dissents or demurrers - footnotes that showed up virtually on every page during the panel's more liberal days.
The sole exception was a complaint by Rep. Parren J. Mitchell (D-Md.), the panel's only black, that the report had not adequately stressed the likelihood of higher unemployment. Mitchell called for $30 billion in new economic stimuli.
In its discussion of the outlook for the 1980s, the committee warned solemnly that the nation will face "a reduced standard of living and a time of...severe shortages" unless it finds a way to boost productivity.
It also offered these predictions:
- Inflation will continue as a major economic problem through the 1980s, slowing only moderately to average between 5.2 percent and 9.6 percent from 1985 through 1989.
- Because of the shift in the population's "baby bulge," there will be steady progress in reducing the nation's jobless rate, particularly for women and teen-agers. Unemployment among blacks will remain a problem.
- The cost of buying a single-family home will be significantly above what a median-income family can afford during the 1980s, making the American dream of home ownership more elusive for most families.
- Resolving the energy problem will require a forceful and energetic nationwide program to reduce imports and spur production. However, the report did not spell out what measures Congress should approve.