The newly appointed secretary of the Health Education, and Welfare Department (HEW) did here yesterday that President Nixon intends to combat inflation with a lower Federal budget for 1973.

Caspar W. Weinberger '38, director of the White House Office of Management and Budget (OMB), told Business School students, "We have to trim $10 billion from the $260 billion budget proposed by the Senate."

Weinberger analyzed the impact of the Federal budget on the economy. He said that he saw a correlation between Federal funding of private businesses and the labor force, but added that it is impossible to reduce unemployment to zero through Federal spending.

"We have an increased labor market, but the number of unemployed male is down to only 2 per cent. Most of the unemployed are women," he said.

Declines Comment

Weinberger declined to comment' on his plans for HEW because he said the Senate confirmation committee must hear them first.

Answering a question on the Clean Water Bill. Weinberger said that it is important to determine the use of Federal money. "The Senate's philosophy is If a little is good, more is better.' The president supported a $6 billion water bill and the Senate returned a $24 billion one," he said.

'Presidential Prerogative'

He also said that he believed Nixon exercised "presidential prerogative" in cutting the money for the bill out of the budget.

The Federal budget, drafted by OMB, forms 20 per cent of the gross national product, However, Weinberger stressed that governmental control of the economy is limited, as only $40 billion of the budget (30 per cent) is subject to administrative decision.