Jimmy's Utility Infielder

No one in the incoming Administration knows more about the intricacies of the Federal Government than Charles Louis Schultze, 52. Jimmy Carter, who has come to regard him as a sort of utility infielder, considered him for several Cabinet-level posts, including Treasury and Defense, before deciding to make him chairman of the Council of Economic Advisers. Colleagues who have watched Schultze and the President-elect work together are struck by their rapport. Says Joseph Pechman, an informal Carter adviser and a member of TIME'S Board of Economists: "When Charlie talks, Carter listens. There's a special chemistry between them."

No Restraints. A pragmatic, neo-Keynesian economist. Schultze favors a temporary tax cut of undetermined size to stimulate the economy and help reduce unemployment. Unlike the present head of the CEA. Alan Greenspan, Schultze thinks it is socially disastrous to combat inflation by keeping the lid on the economy and keeping unemployment high, says fellow Economist Arthur Okun. On the other hand, Schultze, no doctrinaire, fully appreciates the dangers of inflation. It was largely his testimony that brought about the drastic revision of the Humphrey-Hawkins bill, which would attack unemployment by making the Government the employer of last resort and which he considered inflationary in its original form. He has also argued for some form of jawboning as well as wage and price guideposts to help control inflation. Whenever possible, however, he prefers to let the private sector work by itself, free of Government restraints. In fact, while Schultze remains every bit the zealous social reformer that he was as Lyndon Johnson's Budget Director, he has lately been preaching a free-market version of social activism. He has urged the Government to rely less on new laws and massive programs and more on subsidies, taxes and other incentives that might in duce private industry to solve problems like pollution and unemployment.

Schultze's deep interest in the impact of Government policies on the economy began during his undergraduate days at Georgetown University. After earning his bachelor's degree in 1948, he spent most of the next 20 years in various Government jobs, studying economics part time at Georgetown and the University of Maryland (Ph.D., 1960). During a brief stint as an associate professor at Indiana University in 1959-61, he originated the concept that the economic impact of the federal budget is best gauged by what the surplus or deficit would be if the economy were operating at a 4% jobless rate, which most economists then regarded as full employment. A few years later, the "full employment" budget became a key element in the Kennedy and Johnson Administrations' fiscal policies. Schultze became Assistant Director of the Budget Bureau in 1962, Director in 1965.

During his six years in the Budget job, Schultze sometimes complained that he had no time for any recreational activity except sleeping. In 1968 he resigned to teach at the University of Maryland and become a senior fellow at the Brookings Institution, where he has produced a series of critical analyses of almost every federal department. Colleagues regard him as witty and gregarious, particularly after a few beers, when he can be persuaded to sing Lilli Marlene in flawless German.

Since leaving the Government, Schultze has managed to spend more time with Wife Rita, a part-time librarian at George Washington University, and their six children, aged 11 to 27. Schultze and his family in recent years have become avid backpackers in the Blue Ridge Mountains, a short drive from their modest home in northwest Washington. Said a colleague: "Give Charlie some free time and an open trail. and he's gone." In his new job, however, Schultze will have little time for hikes, except between the Executive Office Building and the White House.

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