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Meanwhile the President began mulling over the hard choices in the renewed war on inflation. The major options: 1) draconian cuts in the fat budget for fiscal 1981 and perhaps even for 1980; 2) Executive action to enact a program of credit controls that would curb the growth of bank lending to businesses or consumers; 3) a new excise tax on gasoline in order to cut energy consumption and curb the inflationary import of foreign oil; and 4) a request to Congress for permission to levy wage and price controls.
There was no indication, however, that the emerging program would solve the fundamental befuddlement in Administration economic management. Carter himself exhibited the confusion last week by saying at separate points in a single interview that the nation's economic situation had "reached a crisis stage" and that his economic policies "suit me fine."
Others were hardly complacent. Snapped J. Robert Fluor, chairman of Fluor Corp., a leading manufacturing and construction firm: "Carter has vacillated so much that I find it difficult to know what he wants or doesn't want." Sneered a New York banker in reference to the President: "Inflation has caught us between a marshmallow and a hard place."
The Administration's scramble to re-tune its policy began almost from the moment that Carter first received his routine advance copy of the Labor Department's latest Consumer Price Index data on Feb. 21. As expected, January's 1.4% increase, or a compound annual growth of 18.2%, was the steepest of any month since August 1973. The figure made plain enough what White House Economic Advisers Charles Schultze and Alfred Kahn had been warning about since well before Christmas: rising oil prices, higher interest rates and a frantic "buy it now before it costs more" inflation psychology were pushing prices out of control.
That, coupled with the fear that any rise in inflation was bound eventually to benefit Senator Kennedy in the Democratic primaries, galvanized the Administration into action. Though he had originally been scheduled for a Sunday-night telephone session with voters before last week's New Hampshire primary, the President himself scrapped the politicking and plunged into an anti-inflation brain-storming session. From 6 p.m. to 8:15 p.m., Carter, along with Chief Domestic Adviser Stuart Eizenstat, Budget Director James Mclntyre, Chief Economic Adviser Schultze, Energy Secretary Charles Duncan and Treasury Secretary Miller, reviewed the glum news and options in the Treaty Room of the White House.
One adviser urged an immediate Camp David summit of national leaders. Eizenstat proposed mandatory wage and price restraints and won some support. The President, though, remained opposed on the basis of the Nixon freeze and controls in 1971-73, when prices exploded once the controls were removed.
The conflicting advice at the meeting exemplified the confusion of Carter's economic policymakers, who increasingly resemble an orchestra in search of a conductor. Treasury Secretary Miller is described by White House economic aides as "very slick and facile," but has been distracted by questions as to the accuracy of his testimony to Senate investigators about $5.4 million in bribes paid while he was chairman of Textron Inc.