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May 09, 1979 - Image 2

Resource type:
Michigan Daily, 1979-05-09

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Page2-Wednesday, May 9,1979-The Michigan Daily
Inflation forecast 'screwed up:' Blumenthal
(Cntiued fromPage i)
company," the secretary said, noting economy will continue a gradual to higher tax brackets and business
that few economists were predicting cooling in the next few months. "We are profits rise, resulting in higher tax
five months ago that inflation this year clearly seeing signs of a slowdown - collections.
would be so severe. and I would say welcome signs," Blumenthal said Congress and the
The increase brings the ad- Blumenthal said. Carter administration cannot afford to
ministration's inflation forecast nearly The economy is being brought under let Americans conclude that they are
into line with the predictions of most control, he added, because of Carter's unable to whip inflation. This, he said,
private economists. By comparison, the dollar-stabilization actions abroad; a could lead to a "buy-at-any-price"
Senate has proposed a 1980 budget tighter rein on federal spending; psychology and yet another round of in-
based on 8.2 per cent inflation; the tighter monetary policies by the flation.
House Budget Committee used a figure Federal Reserve Board; the ad- FOR THOSE businesses that are
of 7.7 per cent ministration's voluntary wage and raising prices in anticipation of man-
Despite the higher inflation forecast, price guidelines, and an attack on ex- datory controls, Blumenthal said,
Blumenthal said, a trend toward lower cessive government regulation. People should be assured now that
prices should become apparent this EVEN SO, Blumenthal added, the there is no intention whatsoever to have
fall administration still expects the any kind of wage and price controls."
"THE PRESIDENT is right when he economy to grow by about two per cent He repeated the call for labor unions
says we can look forward to bad in- this year, after inflation is considered. to hold their wage settlements this year
flation figures for several more mon- It was not clear what effect the new to seven per cent or less. And he said
ths," the secretary said. "In all forecast - if it proves accurate - the administration is getting general
probability, it will be summer or early would have on the federal budget. While compliance from businesses in holding
fall before we seea real improvement." inflation increases the cost of many to the president's price increase
Any such improvement, he added, is federal programs, it also brings in guidelines. Blumenthal
conditioned on the expectation that the more revenues. Workers are pushed in-
Denim slit
skirtrS by... ration plan
(Continued fronPage 1)
Cth Hardw ic Mwould find themselves in the ration
coupon basement, with the lowest
Calvn einnational gasoline consumption per car.
THUS, A PERSON in a state which
Cacharel traditionally consumed a lot of gasoline
could get more coupons than a person
BOn ouwr ith the same number of automobiles
in a state where past gasoline use was
relatively small.
Sen. Lloyd Bentsen (D-Texas), the
chief backer of the new plan and a
strong critic of Carter's earlier
proposals, told reporters "everyone is a
winner now. It brings equity among the
HOWEVER, in changing the plan to
t' enhance its chances in the Senate, the
White House may have made passing it
more difficult in the House - where the
changes, made to pick up the votes of
senators from Western and rural
states, are certain to be controversial.
But Jackson said it was either
this modification or allowing the Carter
plan to die. "It's an open secret that
we've been in a hell of a mess," he said.
A 1975 law required the president to
propose a standby rationing plan for
use in emergencies and gave Congress
*60 days to act on it. Unless the House
r~ and the Senate approve the plan by
Friday, it will die and the president will
t be forced to submit a new one.
S" WITHOUT A congressionally ap-
proved standby plan in place, it would
take at least six to seven months to in-
__ stitute the program through executive
' action in case of need, administration
officials have said.
S. -(USPS 344-900)
Volume LXXXIX, No. 6-S
Wednesday, May 9, 1979
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