MOSCOW, FEB. 14 -- The legislature of the Soviet Union's giant Russian republic today rejected central government proposals for sharp increases in the price of food and basic consumer goods over the next two weeks, setting the stage for a new trial of strength with Soviet President Mikhail Gorbachev.
Russian Information Minister Mikhail Poltoranin said in an interview that the increases -- which include some doubled and tripled prices -- are likely to go into effect by March 1, and he predicted that they would lead to a "social explosion," with workers staging strikes and other protests across the Soviet Union.
The price rises are the most controversial element in a package of measures, now under review by the central government, intended to stave off economic collapse. Soviet prices have been artificially fixed for decades, with the result that more than one-third of the federal budget is now spent on subsidizing food and other consumer goods.
After hearing details of the government's long-awaited price program in closed session today, the Russian legislature voted to ask its president, Boris Yeltsin, not to sign a decree approving the increases. Legislators said the proposals included a threefold increase in the prices of meat and bread and a doubling in the prices of eggs and vegetable oil. Other proposed increases include 130 percent for milk, 80 percent for air fares and 75 percent for household appliances.
The government newspaper Izvestia reported that the central authorities were proposing to compensate citizens fully for rising food costs and partially for other price rises. In theory, this money would come from the budgets of the 15 Soviet republics, but Poltoranin said Russia cannot afford such huge outlays.
Most Soviet economists regard the price rises as inevitable, given the fact that the amount of rubles now in circulation vastly outstrips the supply of goods and services. But many are skeptical that the proposed increases will promote the government's declared aim of building a market economy in place of the discredited system of central planning.
Nikolai Petrakov, a former economics adviser to Gorbachev who resigned last month, said in an interview that the government is still making a mistake by trying to fix prices artificially. He said he had fought a losing battle to persuade the president to free prices while preventing hyperinflation through tight controls over the money supply.
The Soviet legislature late last year rejected a plan advocated by Petrakov and other free-market economists aimed at laying the foundations for a Western-style market economy in 500 days through the massive sale of state assets. Government ministers had predicted that the proposals would lead to massive unemployment and runaway inflation.
Poltoranin said the central authorities were trying to shift political responsibility for the administrative price rises onto the legislatures of the republics, but that the attempt would be unsuccessful. He said Yeltsin had indicated that he would rather resign than sign the price-rise decree.
"Gorbachev now has no alternative. He will have to raise prices, but he will also have to take responsibility for this move because he wrecked the 500-day program," said Poltoranin, a close adviser to Yeltsin.
In what is widely viewed here as an attempt to preempt an angry public backlash to the price measure, the Kremlin instituted joint army-police patrols in more than 400 Soviet cities at the beginning of this month. The Soviet Communist Party also has stepped up its attempts to discredit Yeltsin, widely regarded as Gorbachev's principal political rival.
In the latest twist in the anti-Yeltsin campaign, a Communist Party weekly alleged today that Russian leaders had links with an underground organization known as the Chechen Mafia, named after a Muslim group from the northern Caucasus region. A police official was quoted as saying that the number of Chechen members in Moscow had doubled between 1985 and 1987, when Yeltsin was the city's Communist Party chief.
Washington Post Staff Writer David Hoffman added the following from Washington:
The State Department dismissed as "ridiculous" a charge by Soviet Prime Minister Valentin Pavlov Tuesday that Western banks had been conspiring to destroy the country's financial system.
"The story is a transparent effort by Soviet authorities to blame foreigners for economic and financial difficulties that result primarily from the Soviet Union's own domestic policies," spokesman Margaret Tutwiler said in a written statement.
"The charge is ridiculous," Tutwiler said. "It's counterproductive to stir up fears of foreigners and foreign banks. Such statements contradict other Soviet efforts to attract foreign investment and expertise."