Support grows for federal plans to revitalize US industry

Reindustrialization -- concerted federal tax concessions, job-training programs, and plant modernization efforts -- appears to be an idea whose time has suddenly come, thanks to stepped-up action by the Carter White House and Congress.

* The Carter administration is expected to announce a major new program by sometime in September to revitalize the faltering US economy. According to sources close to the White House, the program is expected to involve tax concessions to aid troubled industries -- such as steel and autos -- while stressing job programs for minorities.

* Congress, meanwhile, is starting to look at a number of bills designed to revitalize US industry. In addition to a plan pushed by congressional Republicans for a sharp increase in depreciation allowances (the so-called "10-5 -3 plan"), Ohio Democrat Charles A. Vanik, chairman of the House subcommittee on trade, has introduced a plan to establish a "National Council of Industrial Innovation and Reconstruction," whose task would be to put together depreciation schedules for entire industries.

The aim of the Vanik plan, now gathering substantial support here, is to establish a national job creating program along the lines of the "consensus building" industrial programs in Japan, where labor, government, and industry work together to ensure maximum output of goods at lowest possible wage levels.

The concept of a major reindustrialization program was given a strong boost late last week by a Senate Democration task force. In a written report, the task force warned that without such a policy the US government would find itself faced with the grim prospect of bailing out a number of faltering private companies, as happened with Chrysler. During the past decade alone, the report concluded, the US economy registered more than $125 billion in lost production and more than 2 million lost jobs from lack of competitiveness.

* Finally, US Comptroller General Elmer B. Staats is urging the United States to fund, on an annual basis, a federally established national council to raise productivity -- and, again along the lines of the Japanese industrial plan, include all segments of industry and government.

For its part, the Republiccan presidential platform, as well as GOP presidential contender Ronald Reagan, are advocating new tax concessions plus an easing of government regulations to push productivity.

Because of the presidential election, the idea of spurring US productivity is "suddenly a popular idea," argues Bradley Billings, who heads the economic department at Georgetown University. The danger is not that the programs adopted "will not work, or be counterproductive," Dr. Billings says, but that the US may continue to "spin its wheels" in search of the right program during the election period.

"The most hopeful sign" is that out of the present political debate "we'll get some legislation . . . that will give the economy a substantial boost," says economist Murray L. Weidenbaum, director of the Center for the Study of American Business in St. Louis.

Dr. Weidenbaum, however, warns of the danger that the reindustrialization policy may be geared to "bailing out" specific industries by concentrating on "saving failing firms."

That would likely be the reindustrialization policy of a second Carter administration, he argues. Dr. Weidenbaum maintains that Mr. Reagan, by contrast, is more likely to seek broad tax cuts designed to stimulate business expansion in general.

The White House is believed to be uncertain about exactly which mix of programs to push in its new industrialization policy. Dr. Weidenbaum, however, assumes that Mr. Carter's program will in part stress saving "jobs" (out of traditional Democratic party political considerations), and thus be directed to help specific industries.

The administration is expected to a favor use of existing federal programs, as well as enlarged tax incentives, as the basis of its industrialization program. In fact, there are some reports now that the White House may decide to avoid channeling aid to specific industries and go the "Republican route" of more general tax and depreciation policies.

Whatever the case, the US, according to analysts here, now appears to be on the verge of adopting some form of "reindustrialization" policy.

The comptroller genreal, for example, says at least 134 members of Congress are expressing interest in some form federally funded national productivity council.In a telephone interview with the Monitor, Mr. Staats argued that the US "needs both an overall productivity plan, as well as seeking to target specific industries."

Under Mr. Staats' proposal, which has picked up strong congressional support and has been backed by former Labor Secretary J. William Usery Jr., the current National Productivity Council, which was set up by the administration in October 1978, would be given its own budget authorization. The council would then bring together the $2 billion the administration says is now spent to increase productivity under 27 various federal programs.

Under the Staats plan, labor, government, and industry would work together to promote productivity. "If we could put this in place," Mr. Staats argues, it "would be a tremendous help" to US industry.

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