'Politics' may prod Carter to controls
A possible softening toward wage-price controls now is descerned within the Carter administration. Secretary of Labor Ray Marshall says he "doubts" the President will take such action -- a word, in itself, that appears to open the door at least a tiny bit.
Up to now Mr. Carter and his top economic advisers have been saying again and again that absolutely, positively there would be no such controls.
But a new veiw is surfacing within the administration -- one that doesn't throw down the possibility that if inflation is sitll raging next fall the President may feel he is forced to ask Congress for legislation that would permit him to impose such controls.
One of the President's political advisers concedes, privately, that election-year politics could dictate a Carter move to some kind of a freeze. His comment:
"I don't see it coming now. But if the President is fighting for his political life next fall, he may feel he will have to reverse himself and impose controls. Actually, at least for a short while, such a move might work well and give the President a needed political boost."
A scenario that some political observers here now foresee is this:
By midsummer inflation still is soaring with little indication that the President's efforts to hold down prices have had any effect.
At the same time it becomes increasingly evident that Mr. Carter is well behind Ronald Reagan in the presidential race -- and mainly because of inflation.
Then, probably in early July, Mr. Carter -- saying there is really no other inflation-fighting action left to try -- announces he is asking for congressional authority to freeze wages and prices as soon as possible.
If Congress complies (and this is not to be taken for granted), the President would clamp on controls (if he can get authority in time) before the November election.
A Carter move of this kind would include, or so this scenario goes, a rollback of prices and wages to whatever they were at the time he announced he was seeking such controls.
Secretary Marshall, in discussing the prospect of controls over breakfast with reporters April 9, listened to a recitation of this scenario. He did not "pooh pooh" it. Hw was hearing it voiced elsewhere. But he said her "doubted" that the President would reverse himself.
More than anything else, the labor secretary projected an economy where the administration would, indeed, put a brake on inflation, at least a few months from now.
However, under questioning, Secretary Marshall admitted that past projections of Carter administration officials on inflation, including his own, had not proved very reliable.
Meanwhile, Monitor conversations with Democratic leaders aligned with the Carter campaign show that:
1. An increasing number of these politicians see the President being forced to move to wage-price controls.
2. Those who see this move coming were pretty much agreed on the timing -- sometime in early-to-mid summer.