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July 11, 1979 - Image 2

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Michigan Daily, 1979-07-11

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Page 2-Wednesday, July 11, 1979-The Michigan Daily
Camp David discussions continue

(Continued from Page i2
Currently gasoline costs coming from
the refinery and at the service station
pump are' controlled by complicated
federal regulations which limit the in-
creases which can be passed on to con-
sumers. One increased cost that can be
passed on is higher payments by oil
companies for foreign crude oil.
The issue of deregulating gasoline
prices is a separate question from
decontrolling the price of domestic
crude oil. Carter has already begun
doing that.
POWELL ALSO said there has been
general agreement among those
meeting with Carter at Camp David
that it is too soon to consider federal ac-
tions to counter the expected downturn
in the economy.
He said the administration would
"need a better idea of the nature of the
slowdown" before considering action to
counter recession by such means as tax
cuts. He said it could take several mon-
ths before the nature of the economic
downturn becomes clear.
Alfred Kahn, Carter's inflation ad-
viser, told reporters yesterday's three-
hour session on the economy also
touched on energy woes.
AND HE SAID the conferees
discussed Carter's plight at a time of
"people not believing their leaders,
people thinking everything is the result
of a conspiracy."
The presence of representatives of
the financial community at the
presidential retreat also suggested that
finding money for a major alternative

fuels program may have figured in the
discussions.
With inflation exceeding 13 per cent
on an annual basis so far this year, and
with a recession widely forecast,
whatever decisions Carter makes
following his dramatic domestic sum-
mit promise to have a major impact on
presidential politics in the coming elec-
tion year.
DOUGLAS FRASER, president of the
United Auto Workers and another
summit participant, . said that
politically, the administration is
"probably at the point of no return.
"The administration has to convey to
the American people the problems con-
fronting' our society, and it has to be
believable and it has to be acceptable,"
he said.
The initial announcement of the
president's marathon consultations,
which will continue today, hinted at a
followup period of deliberation that
could delay the unveiling of any new
programs at least until the weekend.
POWELL SAID Carter would remain
at Camp David at least through tonight,
holding a morning conference on em-
ployment and an afternoon meeting
with a group of state and local officials.
Joining the president at yesterday's
meetings were Heller and economists
John Kenneth Galbraith, Arthur Okun,
Marina Whitman and Lawrence Klein.
From the financial community came
Robert Abboud, John Gutfreund, Jesse
Hill and Al Somers, along with board
chairman Reginald Jones of General
Electric.

AP Photo
PRESIDENT CARTER, pictured here in an undated photo, decided against
lifting federal price controls on gasoline, White House press secretary Jody
Powell announced yesterday.

VANCE TESTIFIES TO SENA TE:
SALT veto would encourage arms race
(Continued from Page 1) derstandings would not, he said.
conventional arms transfers. mittee, did not depart from the pro- The committee chairman, Sen. Frank
HE SAID HE had modest hopes that SALT case the administration has been Church (D-Idaho), questioned Vance THOSE DIFFERENCES may prove
ratification of the treaty would en- about the difference between amen- critical if, as expected, changes in the
courage the Soviets to adopt policies of building for more than a year. dments, reservations, and understan- treaty package must be made to secure
restraint in other areas. But he said he dings the necessary two-thirds majority for
could not be certain they would not ALTHOUGH VANCE continued to in- - the pact. If changes in the form of un-
devote more resources to conventional sist that no changes in the treaty were Vance said amendments and reser- derstandings are acceptable to enough
arms if strategic spending was effec- advisable, several senators indicated vations would require renegotiation senators, the treaty might be preser-
tiua ,s limita by ha treaty they still intended to introduce them. with the Soviets. Unilateral Senate un- ved.

Lvelym iea oy e reaty.
Vance said he felt the Soviets had
four basic interests in SALT: a general
desire to avert nuclear war; a more
stable relationship with the United
States; a symbolicequality with the
United States; a need to divert
economic resources from military
spending to domestic needs.
Vance's testimony, and his answers
to questions from senators on the com-
THE MICHIGAN DAILY
(USPS 344-900)
Volume LXXXIX, No. 41-S
Wednesday, July I1, 1979
is edited and managed by students at
the University of Michigan. Published
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paid at Ann Arbor, Michigan. POST-
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Forecasters predict higher jobless rate
LAST MONTH, the unemployment
WASHINGTON (AP) - The Carter Administration officials have revised rate dipped to 5.6 per cent, the lowest
ministration is raising its official downward their outlook for economic level in nearly five years.
recast for unemployment by the end growth this year, predicting zero The administration's latest official
next year from 6.2 per cent to 6.9 per growth instead of the 2.2 per cent unemployment forecast, issued last
nt, an icrease of more than 700,000 growth forecast earlier. If this happens, January, predicted the jobless rate
bess people, admiistration sources it means the economy will dip into a would climb to 6.2 per cent by the end of
id yesterday. mild recession at least. this year and stay there through 1980.

Thne new unempioyment tigures,
which some economists are expected to
brand as still optimistically low, is con-
tamed in a mid-year revised economic
forecast scheduled to be released later
in the week.
The forecast is expected to be a
gloomy one, showing higher inflation
and possibly a recession as well as
higher unemployment.
OFFICIALS AT the White House, the
Council of Economic Advisers, and the
Office of Management and Budget
refused to confirm or deny the new
figures, provided by several ad-
ministration sources.
The revised jobless forecast is in line
with President Carter's prediction on
July 1 that the sharp price increases
approved last month by oil exporting
nations would force 800,000 Americans
onto jobless rolls by the end of 1980, add
two to 2.5 percentage points to the in-
flation rate, and make a recession more
likely.

Four armed men hold 100
tourists at by in nat'l park

CARLSBAD, N.M. (AP) - Four ar-
med men took a National Park worker
hostage deep underground at Carlsbad
Caverns yesterday, releasing her
unharmed after talking with a
newspaper publisher. But the standoff
continued with about 100 tourists trap-
ped in the caverns, authorities said.
National Park officials said there was
no immediate danger to the trapped
visitors, but that they were unable to
leave without passing the area where
the armed men were holed up. Park
employees were with the tourists.
CARLSBAD CAVERNS Superinten-
dent Don Dayton said Linda Phillips,
about 24, the park employee, and Ned

Cantwell, publisher editor of the
Carlsbad daily newspaper, left the cave
late yesterday. They were not injured,
he said.
Dayton said the four men, who were
not identified, remained in the lun-
chroom section of the caverns, 750 feet
underground.
Cantwell, editdr-publisher of the
Current Argus, entered the cavern at
the request of the armed men several
hours after they took Phillips hostage at
about 3:20 p.m., Dayton said.
Cavern officials said the trapped
tourists were in an area of the Caverns
known as the "Big Room," about three-
quarters of a mile from the lunchroom.

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