Under growing pressure to regain the political initiative in economic policy, President Carter and his aides have abruptly stepped up planning for a major economic package to revitalize U.S. industry.
Acceleration of the administration's plans was revealed yesterday by House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.).
O'Neill told reporters: "The president is going to make a major address to some group next week on his program for revitalization of the economy." O'Neil and other congressional leaders met Thursday night with top administration economic officials.
But administration officials cautioned that there has been no decision on the timing of any new economic policy statement, or for that matter the content of a program to help hard-hit industries such as autos and steel.
Word that a new economic policy statement might be imminent caught some administration officials by surprise.
Although an intensified study of an "industrial policy" has been underway for several months, key officials said yesterday that final decisions are a long way off.
"I would hedge on anything of importance coming out next week," one official said. "I think it will just be some rhetoric."
However, even rhetoric apparently would satisfy some of Carter's Democratic supporters, who have become panicked by the liberal challenge to the president and the repeated Republican moves to take over the economic issue in the presidential campaign.
Rep. Leon Panetta (D-Calif.) said he and other Democratic colleagues told the president this week that "there is a real sense of panic" on Capitol Hill over the liberal push to "open" the Democratic National Convention, which begins Aug. 11.
White House press secretary Jody Powell said administration officials are consulting with Democratic congressional leaders about "the economic situation and what steps might need to be taken."
But, he added, "There have not been decisions made about the contents of some package."
A range of tax policy changes to help boost the economy next year were discussed at Thursday's meeting between the congressional leaders and administration officials, said James T. McIntyre Jr., director of the Office of Management and Budget.
Other administration officials at Thursday's meeting included Treasury Secretary G. William Miller, Charles L. Schultze, chairman of the President's Council of Economic Advisers, and domestic policy adviser Stuart E. Eizenstat.
Eizenstat was putting heavy pressure on the president's economic policy advisers to come up with a plan, according to one administration official. But this official added, "I think everything has gone a little haywire . . . people are expressing hopes rather than facts" when they talk about next week's speech.
The administration has been studying plans to stimulate greater investment in plant modernization through changes in tax depreciation allowances, but those at the meeting said no specific plan was outlined.
However, Panetta said that Carter had told a group of members of Congress Tuesday he intends to prepare a tax package by Sept. 1.
Treasury Secretary Miller emphasized to reporters yesterday that, regardless of when a policy is proposed, the administration remains determined to oppose enactment of a new tax bill this year.
Prodded by Republican promises of a tax cut, Senate Democrats moved in July to prepare their own tax bill. The Senate Finance Committee had been directed by the Democratic majority to produce a bill by Sept. 3, but Chairman Russell B. Long (D-La.) said last week that the schedule might not be met.
Congressional Democrats meeting this week with Carter and his advisers have urged that the president "hang tough" on the tax question and make an issue of it at the convention.
Miller would not confirm or deny that a presidential speech on the economy is imminent, but he suggested that it was a likely topic at the Democratic convention.
"People go to conventions to discuss economic policy," Miller told reporters.
Just a week ago, Miller had told Long's committee that the administration might be more specific about its tax policy "within the next few months, maybe . . ." That schedule, apparently, has accelerated.
Although declining to elaborate on the administration's policy options, Miller said yesterday that he is in "complete accord" with advocates of targeted tax assistance to promote large-scale capital investment in sectors of the economy that are hurt by poor productivity.
A group of top administration committees involving officials of the Commerce and Labor departments, the White House Domestic Council and the Council of Economic Advisers has been studying possible designs of an "industrial policy" since last spring.
Options under consideration include greater federal support for research on improved industrial technology and improved economic research to identify industries like auto and steel that are losing their competitive edge against foreign imports.
Some, but not all, top administration officals support formation of tri-partite committees representing government, labor unions and industry to seek to remove government obstacles to modernization and improved productivity. s
Tripartite committees are already at work in the steel, auto, airline and construction industries.
But administration officials involved in this process said major policy decisions have not yet been made.
Rep. Barber B. Conable Jr. (N.Y.), top-ranking Republican on the House Ways and Means Committee, said he thinks the administration will propose "a five-year plan or something like that . . . without an immediate tax cut but with at least something that would improve productivity."
Aid to business is almost certain to form the major part of any tax package, with relaxation of the depreciation rules the most likely measure. Some relief for personal taxpayers is also likely, although an across-the-board cut in tax rates has probably been ruled out by the administration.Social Security payroll taxes are due to go up on Jan. 1, and a tax credit to offset at least part of this additional burden is supported by several administration officials.
Without any tax cut there would be a large rise in the burden of taxes next year, just because of inflation.