Gift to Reagan: prickly pocketbook issues marked 'careful handling'
Washington — President Carter is passing to Ronald Reagan three prickly pocketbook issues. All these problems affect the economic well-being of large groups of Americans and in one case -- oil prices -- virtually every family in the nation.
Mr. Reagan must decide whether to speed up President Carter's progressive decontrol of domestic oil prices, thereby jacking up the cost of gasoline and home heating oil.
The new President also must weigh what to do about Japanese car imports, with the Ford Motor Company and the powerful United Automobile Workers (UAW) pressing him for protection.
Finally, Reagan must ponder whether to lift the US grain embargo against the Soviet Union, armed with the knowledge that Moscow is getting grain supplies elsewhere.
* Oil decontrol: Under a plan set in motion by Mr. Carter on June 1, 1979, price controls on domestic oil are being phased out and are due to disappear altogether on Oct. 1, 1981.
This gradual process, designed to lift the price of US oil to the world level set by the OPEC cartel, will and about 10 cents a gallon to the retail cost of gasoline and other oil products.
That amount could be greater, if, in the meantime, the 13-mmember Organization of Petroleum Exporting countries (OPEC) raises the cost of its oil above the $32.67 a barrel average now prevailing.
Reagan is against controls on the domestic oil industry and could, with the proverbial stroke of his pen, lift controls at once, thereby pushing domestic oil prices rapidly to the OPEC level.
This might force Americans to burn less fuel and thereby reduce oil imports, but at the cost of a sudden jump in gasoline and home heating oil prices -- bound to be unpopular with millions of people.
Meanwhile, spot market prices throughout the world for gasoline and other refined oil products have jumped well beyond the $40-a-barrel mark, prompting Saudi Arabia's oil minister to warn that OPEC might boost prices overall.
So far this year, Americans have done well on saving oil, importing 19.3 percent less than during the comparable period of 1979, according to the Department of Energy.
* Car imports: Congress appears to be moving, perhaps in this lame-duck session, to arm the President with authority to negotiate a decrease in Japanese car shipments to this country.
President Carter is unlikely to act, preferring to say, in effect, "over to you, Mr. Reagan." The President-elect, assuming Congress gives him the go-ahead, will have to weigh conflicting US interests.
Tariffs on Japanese cars would boost their prices by several hundred dollars a unit. Quotas would raise prices less, but nonetheless would have an inflationary impact. Also, under the umbrella of protection. US carmakers might hike their prices, as customers vied for fuel-efficient models.
Import curbs, in short, would and to US inflation and might also boost gasoline consumption, if there were not enough fuel-efficient small cars to meet demand.
Ford and the UAW, on the other hand -- backed by Chrysler and, lukewarmly, by General Motors -- contend that the reeling domestic industry needs sheltered time to get its new models out in volume.
Rebuffed by the US International Trade Commission (ITC), the industry now wants Congress to direct the President to seek some form of import curbs.
* Grain and Moscow: A clue to Reagan's approach to US-Soviet relations will be his decision, after the inauguration, whether to continue the grain embargo against Moscow, imposed by President Carter after the Soviet invasion of Afghanistan.
Since that time, the Soviets have been able to make up part of the grain shortfall by buying from US allies who, despite desclaimers, moved to fill part of the gap. Reagan is said to feel that the embargo punishes US farmers while other Americans continue normal business with the Soviets.