The executive council of the AFL-CIO today accepted President Reagan's challenge, issued in his nationally televised speech Wednesday night, to produce an alternative program to help the nation's economy.
In the preamble to a four-page outline of counterproposals issued at its midwinter meeting here the day after the president unveiled his budget and tax proposals, the council said "the ALF-CIO agrees with the proposition that inflation must be reduced, the number of jobs increased and the unemployed put back to work, productivity improved, industrial strength restored and federal programs made more effective and efficient."
But the federation does not agree the measures the president outlined -- which include tougher unemployment standards and sharp cuts in some favored labor programs -- "will achieve those goals or that they met the essential tests of fairness and equity."
Instead, the AFL-CIO proposed slashing Social Security taxes, balancing the budget by reducing unemployment rather than cutting spending and putting into effect even tighter federal regulations.
Specifically, the federation's proposals call for:
Targeting tax cuts to middle- and low-incoming families through a proposed refundable individual tax cut of 20 percent of Social Security taxes. The council claims this plan would give a $134 tax benefit to a family with a $10,000 annual income, compared with the $52 tax break the same family would receive under the Reagan proposals.
"A business tax cut designed to stimulate investment where it is needed the most." The federation claimed the president's plan contains an "unrestricted depreciation tax proposal that could encourage industrial migration from areas of already high unemployment.
The reimposiiton of selective credit regulations that would "direct capital to productive investments while curbing speculation." According to the federation, Reagan's proposed monetary policy contains many of the same tight money measures that caused the high interest rates the president says he wants to moderate.
Balancing the budget by reducing unemployment and cutting interest rates. The federation called the president's proposed budget cuts "both inequitable and shortsighted" because they aritarily cut social and other programs without taking into consideration the results of the reductions. The government could better balance the budget by reducing unemployment because each 1 percent cut results in a $30 billion saving in unemployment compensation and other benefits to the government, according to the federation. c
Tightening federal regulatory laws, especially those aimed at protecting health, safety and environment. By calling for major cutbacks in regulations, the Reagan administration "ignores the contributions these laws have made to a higher quality of life," the council said.
In his harshest criticism of the president to date, usually temperate AFL-CIO President Lane Kirkland accused Reagan of fashioning a tax and spending cut plan "based upon exceedingly dubious esoteric economic theories not adequately tested, and where tested, not proved to produce the promised results."
The federation president also said Reagan's proposals come from "an excessive plague of economists."
Language unanimously agreed upon by the 35-member ALF-CIO executive board, at the annual midwinter meeting here, was equally critical.
"The president's program is a high-risk gamble with the future of America," the council said. "Workers and the poor take the lion's share of the risk. The only sure winners are the wealthy, whether they are individuals or corporations."
The labor leaders have been playing host to a series of important Republican visitors here, including Labor Secretary Raymond J. Donovan, who attended a labor-management luncheon today.