Carter economic adviser says Reagan budget policy on right track
The chairman of Jimmy Carter's Council of Economic Advisers, Charles L. Schultze, concedes that big cuts in government spending are not only needed, but that they are something Mr. Carter would not have been able to bring about.
"It took Nixon to go to China," Mr. Schultze told reporters over breakfast Thursday, "and it took a Republican President to get these spending cuts."
Mr. Schultze hopes the spending trims don't become too large and do not impair some good social programs. But basically he thinks President Reagan has been on the right track in pushing through major cuts.
Also, Schultze said he thought it possible that Mr. Reagan "might get lucky" and end up with an economy in 1982, and even in 1984, that is satisfactory enough with the American people for him to retain widespread public support.
He said he wasn't predicting this -- that, in fact, the economy might deteriorate. But he said high interest rates and inflation might come down a little bit in the years ahead. He said this would take "luck," but added that "maybe we have a lucky President."
Schultze also said:
* Despite the size of the 1981 tax cuts, the marginal tax rate for a typical family will be rolled back only to where they were in 1978.
* Good breaks on food and oil prices will help reduce inflation now running about 9 percent annually.
* The United States must regain productivity growth or the American economic system -- built upon the expectation of a rising standard of living -- could change basically in the years to come.
* Reagan signals his intention to stay out of the wage-bargaining process. The administration's role in the air controller's strike, however, indicates an attitude "as tough as nails," when the White House does intervene.