Death Without Debate

Condemned, praised and often misunderstood in their 2 1/2year lifetime, the nation's first peacetime wage-price controls now seem destined to die swiftly and unmourned. The House Banking and Currency Committee last week voted 21 to 10 against recommending a bill to extend controls and thus all but guaranteed that the limits will slide into oblivion when the present stabilization law expires April 30.* The vote follows a similar action by the Senate Banking Committee last month.

The Cost of Living Council, which the Administration had wanted to retain if only as a largely powerless watchdog agency, apparently will go out of existence too. The House committee failed to act on a separate compromise bill to keep COLC alive; the overwhelming sentiment among committee members is that it should expire. After dawdling for weeks, the Administration made an eleventh-hour stab at saving COLC, but the move was too weak and came much too late. In the past six months or so, COLC has got many firms and industries, including autos, rubber and aluminum, to sign agreements to exercise restraint in pricing in exchange for being freed from formal control. If COLC vanishes, those agreements will no longer be legally binding, and the companies can lift prices at will.

The most disturbing aspect of the congressional decision was that it was taken without even a pretense of searching debate about the wisdom of lifting all controls when prices are soaring and restive unions are bent on pushing for fat pay boosts. Even optimistic Government forecasters expect prices to jump, at least temporarily, when controls die. Prices for steel, processed food, auto parts, machinery and other items are all expected to shoot up when controls are lifted. For the longer run, retail prices on a wide variety of general merchandise--clothing, home furnishings, sterling silverware--will probably be climbing rapidly by fall. The best the Administration can foresee in the absence of controls is that living costs in the months ahead will rise less steeply than they have so far this year. That is hardly encouraging. Consumer prices zoomed at the annual rate of 15.6% in February.

Wage Increases. Worried about a rapid price run-up in certain areas when controls disintegrate, John Dunlop, chief of COLC, has been the only Administration official vigorously lobbying for continuance of some kind of economic restraints, particularly on the construction industry and medical services. About 4,000 construction labor contracts expire this year, and without some kind of rein, the building trades unions are expected to push for wage increases ranging from about 10% to 34%. Freed from controls, doctors' fees and hospital charges, in Dunlop's view, could leap 5%. Yet Dunlop's repeated warnings were greeted with apathy by congressional leaders.

The Administration, which has repeatedly proclaimed its distaste for controls, can barely contain its impatience for the restraints to end. It has been granting early paroles to one industry after another in recent months, and last week it lifted wage-price curbs on 165 segments of the economy. They include banking, clothing, home furnishings, life insurance and much of wholesale and retail trade. The move narrowed from 27.4% to 24.2% the portion of items in the consumer price index that remain controlled and reduced the proportion of U.S. workers under wage control from 32.3% to 26.8%.

Congressional Democrats were once expected to legislate continued controls; they pushed through the first authorization for controls, over strong White House opposition, in 1970. Instead, they are accepting the death of controls with remarkable placidity, at least partly because of hard prodding from their supporters in organized labor. AFL-CIO President George Meany and other union leaders make no secret of their intention to push for wage and benefit increases of 10% to 12% this year.

In getting rid of controls, Congress and the Administration are making a risky bet that a record harvest this fall, and a potential drop in oil prices resulting from increased supplies will take much of the steam out of the present inflation. If they are wrong, the big loser will be the already price-burdened U.S. consumer.

* Oil prices are controlled under separate legislation.

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