The Carter administration is considering proposing $8 billion to $10 billion in new budget cuts in an effort to reassure the nation's skittish financial markets that it is serious about fighting inflation.
Although officials still are far from decisions, the budget-cutting idea is said to be the main option under review by Carter and his economic advisers.
The disclosures came as, separately, President Carter told a group of out-of-town editors yesterday that inflation and the energy problem had "reached a crisis stage." He complained about Congress' laggardness in passing his programs.
Sources say some administration officials also have been talking about the possibility of asking the Federal Reserve Board of tighten monetary policy further to help cool the economy and slow inflation.
Meanwhile Federal Reserve Board Chairman Paul A. Volcker told the Senate Banking Committee "we have reached the point in this inflationary situation where I believe decisive action is necessary" on economic problems.
The high-level White House policy review, which Carter began late last week in response to new fears about inflation, is not expected to result in any new policy decisions until sometime next week.
Officials say that, if nothing else, the White House wants to wait until after today's New Hampshire primary before even hinting at what steps the president might take. Any new cuts are likely to be controversial.
However, officials said yesterday there was little doubt the administration would come up with something, and that whatever it proposes will be aimed at jolting the inflationary psychology in the financial markets.
Sudden new pessimism over the inflation outlook has sent interest rates soaring in the past few weeks and pushed the bond market into a slump.
Officials stressed yesterday that the budget cut proposals were still far from final approval by the president. The $8 billion to $10 billion figures were described as only "ballpark estimates" and not formal recommendations.
And strategists were reported divided over whether to limit the cuts to the fiscal 1981 budget that Carter has just proposed, or try to reduce the deficit for the current year, as well.
The president's political aides reportedly want to confine the cuts to fiscal 1981, which doesn't begin until October 1. But economic aides argue that Wall Street is far more worried about the fiscal 1980 deficit, which has ballooned to $39.8 billion.
Although the exact figures still haven't been decided, officials say they are considering sufficient cuts for fiscal 1981 to slash the $15.8 billion deficit Carter proposed last month in half -- to say, $7 billion or $8 billion.
Some aides also want the prsident to propose several billion dollars in cuts for fiscal 1980 as well.
Although the fiscal 1981 totals still would leave a deficit, they could prove tougher than they appear, particularly if the review finds the White House has underestimated the fiscal 1981 deficit, as some analysts suspect.
The $15.8 billion red-ink figure was calculated by using last autumn's energy prices and interest rate assumptions. It also assumed that Congress would cut some spending programs. Some say the real deficit could be $10 billion higher.
The talk about tightening monetary policy centers on a possible increase in reserve requirements in an effort to limit the ability of banks to meet mounting loan demands. The Fed has boosted reserve requirements once, in its Oct. 6 credit-tightening action.
In his appearance before the Banking Committee yesterday, Volcker did not explain specifically what he meant by his call for "decisive action," but an associate said later he was merely trying to rally support for budgetary restraint.
"The real risk would come if we fail to face up to this inflationary situation," the Fed chairman told the panel. He urged the lawmakers to make "as much progress as we can . . . in balancing the budget."
Volcker also again opposed both wage-price controls and credit controls, and rejected one senator's suggestion that the existing Council on Wage and Price Stability be empowered to demand advance notification of pay and price increases.
He also reiterated earlier assertions that the reaction of the markets to the latest inflation figures appears to be "overdrawn.' Volcker said that the sharp increases in prices "shouldn't be surprising" in light of recent oil-price hikes.