Economic contrasts: administration optimism amid persistent shadows

Tall, lithe Malcolm Baldrige says that as the summer wears on, he would much prefer mending fences and branding cattle on his ranch in New Mexico to riding herd over the economy from his vantage point as secretary of commerce.

''Someday,'' a reporter greeted Mr. Baldrige as he moved into the center of 34 breakfasting journalists, ''why don't you ride in on your horse? After all, Senator Proxmire loped in wearing his jogging togs when he met with us recently.''

Baldrige, settling in for an hour's grilling, allowed he ''just might do that - if you don't make fun of my horse. I love my horse.''

From his vacation dreams, the secretary then settled down to the matters at hand. He said the recession was already receding fast. ''If the prime interest rates get to as low as 14 percent,'' he said, ''we will see a good recovery.''

''But,'' he added, ''a recovery is built in the wood now, just as a recession was built in the wood when we came into office.'' He said he simply couldn't say how strong the recovery would be or how sustained it would be.

Several questioners wanted to know what would happen if Congress now fails to implement the spending cuts and tax increases called for in the budget.

''We'll be in trouble,'' he said. He indicated the higher deficit that would result (beyond $115 billion now projected by the White House) would definitely send interest rates up again, and thus help shorten and cool the recovery.

''Would the President jump in and give a big personal shift to getting the tax-increase package and spending cuts passed?'' he was asked. ''In my opinion he will,'' said Baldrige. ''He says he will.''

The secretary was asked about how he could reconcile the President passing the biggest tax cut in history and then following it the next year by seeking the biggest tax increase in history? Didn't this send out a stop-go signal to the public?

Here the secretary blamed this rather ambigious approach on a recession that had not been anticipated and which ''we inherited.'' But, he said, ''the tax cut amounts to $350 billion and the tax increase to $100 billion. So that tax cut still is $250 billion and still is the biggest in history.''

The secretary was questioned at length about his current discussions with European Community officials over the temporary duties the US has slapped on EC steel products after the Commerce Department had ruled that EC countries were exporting unfairly subsidized steel to the US.

Of these efforts to defuse this dispute, the secretary said: ''We are closer to an overall solution now than any time in the last six months. We have made some real progress in the last several days. I'm cautiously optimistic. We still have some major points we're not settled on, but I hope we can reach a conclusion (the) governments can take back to their respective industries for approval.''

Could the squabble over steel permanently damage US-EC relations?

''The term 'family squabble' has been used in this. The EC and US both understand full well that we have too much at stake'' to let steel come between the countries.

''Relations will be improved simply because they have to be improved.''

On the cutoff of US equipment for the Soviet pipeline, Baldrige said: ''There are no violations yet - hence no need for announced action. . . . The US sanctions will slow down the pipeline a year or two. . . . The Soviets are making it a focal point of propaganda, promising that they will finish it on time.''

Asked about whether the diminishing trade with mainland China stems from cooling relations between Peking and Washington, he said: ''I don't see any trend in this direction that is tied in with the Taiwan problem. Not yet. We might in the future.''

He attributed the drop-off in US-China trade mainly to new priorities set in Peking that have led to the production of goods that are less in demand in the United States.

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