The Carter administration has raised its 1980 consumer price forecast another notch in a gloomy footnote to the budget-balancing package of spending cuts the president will submit to Congress today.
In its third and highest price forecast this year, the administration is predicting the consumer price index will rise 12.8 percent during 1980, roughly the same as last year.
Until now, even though consumer prices have been rising at an annual rate of more than 18 percent since the end of 1979, the administration had been predicting an abatement of the inflation rate this year.
The projected 12.8 percent increase between the fourth quarters of 1979 and 1980 represents an increase over President Carter's January forecast of 10.7 percent for the same period.
As recently as March 14, when Carter announced he would propose a multibillion-dollar budget cut for 1981 in an attempt to curb inflation, his economic advisers were talking in terms of a 1980 inflation rate of less than 12 percent.
The administration has consistently underestimated the inflation rate, raising questions to whether its latest forecast is more realistic than the others -- or a harbinger of worse to come.
Officials attributed the more pessimistic forecast largely to higher oil prices and soaring interest rates, although they have also warned recently that serious inflation is spreading more broadly through the economy, making it harder to control.
But for 1981 the administration continues to predict an end to double-digit inflation, with the rate of price increases falling to 9 percent, up only marginally from its January estimate of 8.7 percent.
In its updated forecast for Congress, the administration said the recession it has been predicting for some time will still occur but will be milder and later than appeared likely in January.
The administration anticipated that unemployment, now about 6 percent, will rise to 7.2 percent by the end of 1980 and 7.3 percent in 1981. In January, it had predicted an unemployment rate of 7.5 percent for 1980.
As for the gross national product, which reflects the total value of goods and services produced in the country, the administration now predicts more sluggishness in 1980 and a better recovery in 1981 -- but balancing out to the same two-year economic growth of 1.8 percent that is predicted in January. t
Carter's detailed list of budget cuts, reportedly totaling $2.5 billion for the 1980 fiscal year that ends Oct. 1 and $15.5 billion for fiscal 1981, closely parallels cuts approved earlier this month by the House Budget Committee.
According to a list circulated last week, the cuts would be spread over about 70 programs, including revenue sharing to states, antirecession aid to cities, public service employment, various social welfare programs, highway programs, law enforcement assistance and Postal Service subsidies (although enough money would be left for Saturday mail delivery).
Defense spending would be increased but not by as much as proposed earlier when Pentagon outlays were expanded to account for higher inflation.
As Carter proposed earlier, federal hiring would be partially frozen, along with the salaries of top-level government officials.
In a speech last week, Carter ruled out any cuts in Social Security, as did Senate Majority Whip Alan Cranston (D-Calif.) in an interview yesterday on the "Face the Nation" (Cbs, WDVM) program.
Cranston said he anticipated cuts in virtually every program except defense, adding that, "even defense will be carefully pruned to get rid of what can be put off or ended to make room for 'readiness' efforts to strengthen our defense."
Cranston also said he thinks Congress will approve cuts of $16.5 billion for fiscal 1981, and the Senate Budget Committee is thus far taking a hard line in its deliberations on funding increases for 1980, including defense spending. The Senate committee has not yet gotten to the 1981 budget.