Carter-Kennedy economic-policy clash nears point of no return for November

Ostensibly, it is an economic issue. Actually, the gap between President Carter and Sen. Edward M. Kennedy goes deep into their histories and personalities. And as the Democratic convention opens here, it seemed that the 1980 presidential election might turn on this division.

As the dragged-out delegate contest continued, there were signs that the point of no return between Carter and Kennedy was at hand. Delegates wondered: Would the struggle take the party over the cliff in November?

"I'm amazed, astounded, and at a total loss for words," said the usually equable Robert Strauss, Mr. Carter's political spokesman, to reporters here. He was referring to what he interpreted as a growing belligerency and harshness in Kennedy's attack on the Carter administration. Technically, the attack turns on the economic issue, and in particular on the battle for convention delegates. Now it was beginning to include personal rancor. To reporters, Mr. STrauss was frank: "We're going to reach out [to] Senator Kennedy with concessions," he said. "But there is a point on federal spending that we can't accept." In addition, he noted the undercurrent of personal bitterness which he believes is creeping into the struggle.

Upon arrival here the Massachusetts senator reportedly referred to the President as a "Reagan clone." In a speech at George Washington University last January, Kennedy told cheering students: "The fact is, America did not elect Gerald Ford in 1976. But under a Democratic administration, we have had three more years of Republican inflation, three more years of Republican interest rates, and three more years of Republican economics."

A more embarrassing attack, if it continues, could hardly confront President Carter at this juncture, just as he prepares to mount his onslaught on Republican candidate Ronald Reagan if renominated. It is the administration's position that the US economy is turning around. If nominated, Mr. CArter is almost certain to stress this point in his acceptance speech here; his re-election may depend upon it. "The anti-recession plank," says Mr. Strauss, "is the key issue." He continues: "All economic indications are reassuring."

These are the tentative indicators: housing starts rising; interest rates high but declining; rate of inflation cooling; inventory levels satisfactory; the stock market in a surprising recent upward leap. Carter administration officials note on Aug. 8 report by economists at the University of Michigan calling for a "slow improvement" of the US economy. The political argument is that voters cast ballots not on actual conditions, but on the direction of movement. The Carter administration is plotting its strategy on the postulate that it will be a sharp but short recession, and that both Reagan and Kennedy are reckless in their proposed drastic remedies.

Kennedy is trying to commit the convention to planks that would freeze wages, interest rates, prices, profits, rents, and dividends, followed by mandatory wage and price controls and a rationing system for gasoline. Some concessions have been made to him in the platform.

Carter has dissappointed many by not taking bolder steps against the recession-inflation; he recently abruptly proposed an unspecified new stimulative program which he says will provide "million of jobs."