Inflation, energy show sharp Democratic split
Washington — American voters are given a clear choice between the economic and energy policies of President Carter and those advanced by his chief Democratic challenger, Sen. Edward M. Kennedy.
In three key areas -- control of inflation, handling a gasoline shortage, and decontrol of oil prices -- the two rivals have etched sharply contrasting points of view.
These are pocketbook issues, and Senator Kennedy -- appealing to working class Americans -- charges that Mr. Carter's policies would hurt the door and benefit the well-off. Senator Kennedy's programs, according to White House aides, would become a bureaucratic nightmare and, in the long run, would not work.
On fighting inflation:
Senator Kennedy calls for mandatory controls "across the board" on wages, prices, profits, dividends, interest rates, and rent, to remain "as long as necessary."
Charles L. Schultze, President Carter's chief economic adviser, replies that controls bottle up inflationary pressures, which burst out once controls are lifted.
Within a year after removal of wage and price controls imposed by former President Richard M. Nixon, Mr. Schultze says, "inflation was 8 percent higher than it was before controls were put in place."
Senator Kennedy's position coincides with that of the late AFL-CIO president George Meany, who maintained that partial controls -- only on wages and prices -- allowed profits, interest rates, and rents to spiral upward.
President Carter, by contrast, stresses voluntary wage and price guidelines, frugal government spending, and tight curbs on credit expansion by the Federal Reserve Board.
The President's problem, spotlighted by Senator Kennedy, is that, under this approch, inflation has increased, culminating in the 13.3 percent rise of 1979.
On conserving gasoline:
Rationing "without delay," based on giving coupons to every holder of a driver's license, is Senator Kennedy's recommendation.
Carter aides contend that gas rationing, except in a real emergency, would require putting thousands of additional people on government payrolls to decide who should get how much -- farmers, doctors, salesmen, commuters obliged by lack of public transport to drive to work -- and to administered the cumbersome system.
Mr. Carter does have a standby gasoline rationing plan in the wings, to be invoked in case of extreme shortage. It is based on vehicle registrations, not driver' licenses.
A plan based on vehicle registration, Senator Kennedy says, would tilt toward the rich, who might register several cars to get scarce gasoline.
On decontrolling oil prices:
President Carter says he believes that the quickest way to cut US dependence on foreign oil is to let the price of domestic oil move up, in stages, to the world level.
So long as domestic oil prices are held artificially low, White House officials argue, Americans will be encouraged to waste energy, especially gasoline.
Mr. Carter would rebate the extra cost to lower-income Americans through revenues from a proposed windfall profits tax on oil companies, and possibly through other tax reductions.
"The President's decision to decontrol the price of oil," asserts Senator Kennedy, who would retain controls on domestic crude, "will cost the average family $1,000 each year through the decade of the 1980s."