With an eye to the Wisconsin primary and perhaps beyond, White House budget-slashers dropped a proposal to cut price supports for dairy products next year.
The politically sensitive item, which would save the Treasury $130 million, was on a preliminary list of President Carter's proposed budget cuts circulating last week. Mysteriously, it had vanished when the final list was released Monday.
Playing politics? "It wasn't just the Wisconsin primary," a White House adviser insisted yesterday. "But I'm not sure it would be the worst thing if it was. After discussions on the Hill, we saw it would be a mistake to include what clearly would be a lightning rod issue."
One thing seemed clear: what could cost the diary industry money, could cost Carter votes in Wisconsin and other dairy states. And Congress, milk-fed for years on dairy industry largess, would likely balk.
The proposal was to change the inflation adjustment of dairy price supports from twice a year to once a year. Congress passed a law last year requiring the Agriculture Department to recalculate price supports twice a year to account for inflation.
Under the support program, the government sets a price for dairy products and then purchases enough to keep the market price from falling below that level.
Adjusting the price supports once a year instead of twice would slow the price rise of milk, cheese and butter. Economists calculate that the government support program has increased the price of milk 7 to 22 percent.
Last month, when the president ordered departments to come up with cuts to help balance the budget, the dairy program seemed a fat target to Agriculture officals. This was particularly true because inflation adjustments for food stamps, which are also made twice a year, were on the list to be cut back to once a year.
Yesterday, an Agriculture Department source, who asked not to be named, called the White House's change of heart "outrageous. If food stamps are going to be adjusted once a year, it seems like dairy farmers could do the same. But food stamps has no powerful constituency."
Department officials suspected the intervention of Vice President Mondale, known in his native Minnesota as a friend of the dairy industry. "He's Mr. Dairy," one bureaucrat said.
However, a White House domestic policy staff member who sat in on budget conferences said that no one in the White House had ever really endorsed the proposal. "It was on an Omb [Office of Management and Budget] list hidden in a bunch of aggregates.
"There was no mention of dairy price supports in the budget discussions with the Hill. The minute that I and others became aware that someone had included dairy price supports on one of their lists, we said it was not consistent with the understanding on the Hill."
This staff member and others, he explained, immediately protested. "It's obviously sensitive. Let's not do it."
Among those who protested when word of the dairy support proposal leaked out was Rep. David R. Obey (D-Wis.). Obey received a quick call from the White House to reassure him no such thing was contemplated.
The president's change of mind had "political reasons," Thomas B. Smith of the Community Nutrition Institute charged yesterday. "It has long been recognized that the semiannual basis for adjustment is inflationary."