Ugly Mood Developing on the Hill

Congress comes back to confront energy and inflation

If a summer vacation is supposed to give people a lift, then the nation's lawmakers might just as well have skipped the August recess and stayed in Washington. Said Massachusetts Republican Representative Silvio Conte as he returned to the Hill last week with his colleagues: "Congress is in an ugly mood. The members have been home and they got the message." Said New York Republican Congressman Barber Conable: "The mood is one of grim determination. The members are ready to get on with it and are looking for a tough fall."

Two big issues are spoiling the usual autumn conviviality: energy and inflation. The members know that their constituents want them to act on these matters, but they are not quite sure how. Hardly had they returned to their offices when the President started pressuring them to pass his energy program. At a senior staff meeting early in the week in the Roosevelt Room, Carter told his aides to put the heat on Congress. "When there's unfavorable committee action," he said, "we ought to call it exactly as it is." A top aide later warned that the White House may have to start playing rough with legislators who do not cooperate. "We haven't kicked anybody around yet," he said.

The following morning Carter breakfasted with Democratic Congressional leaders in the same room. Said he of his energy package: "The people want it. If we can't have an effective energy bill, I don't deserve to be re-elected and the Congress doesn't deserve to be re-elected." That was a bit much for Senate Majority Leader Robert Byrd, who has not indicated whether he will support Carter for a second term. Congress, protested Byrd, should not be judged on a single issue. "This is no time to suggest any such thing," he said. "We've already done a lot."

Absence had not made the congressional heart any fonder of the Carter energy program. The more members scrutinized it, the less they seemed to like it. Flaws were beginning to show through the rhetoric. Especially vulnerable was the $88 billion synthetic fuel plan. The House had already passed a much reduced version of the President's ambitious proposal, and Senator Scoop Jackson, chairman of the Energy Committee, was readying a bill of his own. "We want to get a real beginning on synthetic fuels," Jackson said. "There's a coalition forming of strong fiscal conservatives who say this is a spending program. We say it's an investment program."

But during the recess three management consulting firms hired by the Senate Budget Committee concluded that the President's goal of 2 million bbl. of synthetic fuels a day in ten years was unrealistic and potentially wasteful. The consultants advised that it would make more sense to try several different approaches on a modest scale and then decide which ones were feasible.

The other main component of the President's energy program -- the windfall profits tax on oil companies -- was in similar trouble. Though the House had passed the bill, it was stalled in the Senate. It was said that Senator Russell Long, chairman of the Finance Committee, had abandoned his commitment to put a windfall tax bill on the President's desk by Oct. 1. The White House let it be known that it was willing to compromise. The $146 billion in revenues anticipated from the tax would not all have to go to mass transportation or to relief for low-income groups, as originally planned. Some of the money, suggested the White House, could be shifted to measures that would encourage conservation, or even to cutting Social Security taxes. "Popular support for the tax simply is not being translated into support for it in the Senate," complained a top Administration official. "Without the windfall profits tax, there will be no energy plan."

What to do about the economy is just as baffling. Carter and Congress are being pulled in two incompatible directions. While inflation continues to roar along at an annual rate of 13%, the clouds of recession are fast gathering. Tight fiscal and monetary policies that can curb inflation may aggravate unemployment. "Poor Carter," said an aide. "He can't even get the timing of the recession to break in his favor. If the economy were really going soft now, he would solve it with some stimulus this fall and the recession might be over by spring. Instead of that, the recession will hit with full force in late fall and winter, and he'll move to stimulate next year."

Carter may not even be able to stimulate the economy when he wants to; the choice is not entirely his. Many members of Congress continue to regard inflation as enemy number one. Says Bob Giaimo, chairman of the House Budget Committee: "Some Democrats are talking about incentives and stimulants. I don't think they're reading the tea leaves right." Carter may also find the Federal Reserve balkier than before. Its new chairman, Paul Volcker, is a more determined inflation fighter than his predecessor, William Miller, who is now Treasury Secretary.

Volcker has already permitted the prime interest rate to reach a historic high -- 12 3/4%, and he has assured Congress that he plans to keep up the pressure.

Finally, Congress has less reason than ever to give the President what he wants because his support continues to crumble. During the recess, Arizona Congressman Morris Udall won applause whenever he told constituents that Carter should be given the benefit of the doubt, but he found that the same audiences favored Ted Kennedy over Carter by two to one. Democratic Congressman Dave Obey discovered that most of his Wisconsin constituents doubted that Carter would be reelected, though many of them wished he could be. Said Obey: "The people have not decided whether Carter is being worked over as a good man in a sinful world or whether he just can't cut it. They haven't made up their minds."

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