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Labor leaders are vocally unhappy.
AFL-CIO President Lane Kirkland says that the proposed budget "may have psychological value for the bond market and for bankers" but "places most of the burden on those suffering worst under the present economic conditions." The Congressional Black Caucus, a group of 17 Representatives, is no less worried. Representative Parren Mitchell, of Baltimore, has advised his fellow blacks to use every parliamentary tactic available to block budget cuts that would hurt their constituents, such as reductions in job-training programs and aid to cities. Says Mitchell: "The President has got to run the risk of losing another whole block of votes. We would not vote for the Republican [presidential candidate], but the disenchantment with Carter would be so great that we would sit out the election."
Lobbyists of various sorts are mobilizing to guard their interests. The liberal Americans for Democratic Action claims to have organized a coalition of 50 labor, youth, civic and religious groups to block reductions in social spending. Carter's program, says the A.D.A., is "a cruel deception of the people." A coalition of 39 women's groups has warned its members to watch for any budget cuts that might be unfavorable to women.
Long and loudly as Republicans have proclaimed the necessity for a balanced mdget, the Administration already has ost its perhaps disingenuous hope for a bipartisan economic policy. A dozen Republican Senators turned out for a midweek press conference, at which they insisted that the budget must be balanced entirely through reductions in spending, with no revenue-raising measures. They want spending cuts much deeper than any that Carter will propose. Senator William Roth of Delaware has collected 46 signatures—including those of nine Democrats—on a resolution to limit federal spending to 21% of the gross national product (the dollar value of the nation's total production of goods and services). That would imply a reduction in expenditures of $26 billion for fiscal 1981, vs. Carter's $13 billion.
The Republicans want to slash spending sharply enough to leave room within a balanced budget for immediate "supply side" tax cuts, such as more generous depreciation deductions for business. This would spur savings and investment, which they contend is needed to reverse the recent drop in productivity, a major cause of inflation. Carter agrees that investment-prompting tax cuts are necessary, but he argues that they can come only after the budget is safely into surplus.
Carter's program is open to serious question on some other grounds. Controls on credit-card debt, in the opinion of many economists, will have only a marginal impact on inflation. The wage-price guidelines have been very ineffective, and there is little reason to think their impact will increase. And the Administration's fee on imported oil will immediately force up further the item that is already rising faster than anything else in the consumer price index. Gasoline prices went up 60% between early 1979 and early 1980 (see chart).
Essentially, Carter is opting for more inflation now in the hope of less inflation later. The Administration makes two arguments: 1) the extra revenues from the gas fee will shrink inflationary