President Carter has strongly defended his basic economic policies in an interview, saying they are sound and "suit me fine."
He also stressed several times that "mandatory wage and price controls are out of the question for me."
But with inflation at a "crisis stage," he acknowledged to a group of newspaper editors Monday that "we are assessing a wide gamut of possibilities," for refining present policies.
The administration has created a task force of senior economic policy advisers and their deputies under Vice President Mondale to conduct the policy review, which began Sunday night at a White House meeting at which Carter presided.
The principal options on which the task force was focusing yesterday, it was learned, include:
Cutting spending by $10 billion or more in the 1980 and 1981 budgets combined.
Cutting the automatic cost-of-living increases in Social Security and other federal benefits so that benefits would rise only 75 to 80 percent as much as the consumer price index instead of 100 percent as now.
Increasing the 4-cent federal excise tax on gasoline by a large but unspecified amount, or imposing a fee on imported oil, both to reduce gasoline consumption and raise revenue. Gasoline rationing is not under consideration.
Limiting future federal spending to a set percentage of the gross national product.
Authorizing the Federal Reserve Board to limit the use of consumer credit, probably by requiring minimum down payments on major consumer purchases, such as automobiles.
All but the last of these alternatives would require congressional approval.
If sufficiently large spending cuts could be made, an "anti-inflationary" tax cut, probably designed to encourage business investment, might be possible, sources said.
The task force, which is not even close to preparing a final list of options for Carter's approval, has begun to discuss some of the possibilities with members of Congress, Charles L. Schultze, chairman of the Council of Economic Advisers, and various high level officials from the office of Management and Budget, among others, have been meeting with the congressional leadership and other influential members.
According to a transcript of the interview released yesterday by the White House, in response to a question on inflation, Carter said, "It would be misleading for me to tell any of you there is a solution to it. . . . This is a worldwide, awful, basic problem with oil prices having been increased almost 100 percent during the last 13 or 14 months.
"We are dealing with this problem with every possible means," he said.
"We have had a tightly restrained budget," the president continued. "We have slashed the deficit down substantially; we have lowered the number of federal employes 20,000 below what they were when I came here. We are enhancing research and development to give us a long-range approach to the inflation problem . . . and we'll take other steps as appropriate.
"One of the reasons for the meeting [Sunday] was to go down again the long list of possible options open to us. We'll assess those as we have been in the past, and take the action as necessary."
Carter repeatedly rejected controls. "I don't see a prospect at all of my supporting mandatory wage and price controls," he said at one point. "I think it would be counterproductive. I think history has shown that it has never worked except during the time of intense crisis when the very existence of our nation was threatened. . . ."
Furthermore, he added, "I think it would precipitate a wild escalation in existing inflation" in the period between his asking Congress for authority for controls and its giving such authority.
Mondale was asked Monday morning by Carter to take charge of the policy review, the outcome of which could affect their chances for reelection.
The review was sparked by a worsening of the nation's inflation, which was running at more than 18 percent annual rate in January, and the turmoil in financial markets set off by a combination of the inflation news and a conviction by many financial experts that Carter's 1980 and 1981 budgets did not do enough to restrain federal spending.
A number of prominent economists have began to suggest that inflation will yield only to a series of drastic measures, including much tighter fiscal and monetary policies and wage and price controls.
White House press secretary Jody Powell said yesterday that, to the administration, "The only suggestion that would be drastic would be controls. . . ."
Any proposal to cut cost-of-living increases in Social Security and other federal benefits would be highly controversial, but a number of members of Congress are ready to propose it.
A House Budget Committee task force looking for ways to cut spending likely would back such a plan, and the Senate Budget Committee will hear testimony on the issue today. Proponents of such a cut argue that because of the way the CPI treats some items, including housing costs, it seriously overstated the inflation rate last year, giving benefictaries unnecessarily large increases in their checks. In many cases their incomes rose more than wage earners'.
OMB Director James McIntyre, who is expected to meet privately with members of Congress today to discuss the options, told the National Governors Association Monday, "I've been saying for 2 1/2 years that the real driving force of inflation is the indexing of the budget."
Heretofore, administration economists have opposed any use of credit controls as an anti-inflationary device, saying they were not needed to cool off consumer buying. Federal Reserve Chairman Paul Volcker also opposed their use in Capitol Hill testimony this week and last, arguing that auto sales, for instance, are already somewhat depressed and hardly need to be cut further.
Several members of Congress also are backing limiting spending to a percentage of the GNP. One version, offered last year by Rep. James R. Jones (D-Okla.), which the Democratic leadership has promised he will be allowed to bring to the House floor this year, would set a 21 percent limit for fiscal 1981 and 20 percent thereafter.
A 21 percent limit for fiscal 1981 would require a $36 billion cut in the $615.8 billion of outlays proposed by Carter rather than the $8 billion or so now under consideration by the administration task force.