Trying to Cut His Losses

By William R. Doerner.

Twice last week Ronald Reagan employed the bold but risky political strategy of pre-emptive compromise. Faced with the all but certain passage of bills that he had previously threatened to veto, the President sought to outflank Congress with his own initiatives on South Africa and international trade. His political maneuvering served only to heighten the partisan conflict on Capitol Hill. "This is no longer an issue of what's good for South Africa," declared Senate Majority Leader Robert Dole. "It's a raw political issue. South Africa is secondary." As for new trade legislation, a top White House aide pointed an accusing finger at Congress. Said he: "Pure domestic political considerations have produced this protectionist rhetoric."

As expected, Reagan signed an Executive Order imposing a variety of trade and other economic sanctions against South Africa as a means of pressuring that country to begin dismantling its apartheid system (see WORLD). Reagan's measure included most provisions in a sanctions bill already approved by the House but not yet passed by the Senate. Republicans, by and large, were relieved that the President conceded as much as he did. "We ought to declare victory," said Senate Foreign Relations Committee Chairman Richard Lugar. "Not for our bill but for a unified policy toward South Africa." Many Democrats, on the other hand, were not happy at the thought that a Republican $ President had stolen their thunder and fought to continue the confrontation. Some complained that Reagan's measure failed to include a proposal to put South Africa on notice that the U.S. will impose even stronger sanctions if Preto- ria refuses to work toward re- form. Scoffed House Speaker Tip O'Neill: "The President did a somersault this weekend. Unfortunately, he landed on his head." Determined not to let an effective political issue slip away, California Senator Alan Cranston declared, "The Republican Party is going to look weak on apartheid."

The Democrats tried three times to bring their own bill to a vote. Just before the second and climactic attempt, Dole reclaimed a few G.O.P. waverers with a dramatic pledge. "If there is any slippage, if there is any turning back on the part of the President," Dole said, then he would personally reintroduce the bill and support it. The call to bring the sanctions to a vote was defeated 57 to 41. But Cranston vowed to try to attach the measure to legislation that Reagan could not easily veto, like an upcoming bill that would raise the federal debt ceiling.

Reagan's trade initiative was an attempt to stave off an avalanche of more than 200 protectionist bills pending on Capitol Hill. The President, a longtime advocate of free trade, had first signaled a shift in his radio message on Sept. 7. He threatened retaliatory measures against four U.S. trading partners that discriminate against some American products, including tobacco goods in Japan and canned fruit in the European Community. It was the first time Reagan had issued such warnings without being asked to do so by a U.S. industry. The President stressed that there was still time to resolve the disputes through negotiations. But he warned, "Our trading partners should not doubt our determination to see international trade conducted fairly with the same rules applicable to all."

Meeting with the G.O.P. congressional leadership, Reagan outlined a still broader trade package, which he will probably unveil in a nationwide television address next week and then send to Congress. Besides the continued use of retaliatory warnings, it will include stepped-up protection of intellectual property rights like patents and copyrights and a sharpening of antidumping laws that prohibit foreign firms from selling products in the U.S. for less than they charge at home, a favorite market-building device. Dole welcomed the plan but warned that it came too late to head off at least some of the protectionist wildfire spreading through Congress. Indeed, in the Democratic-controlled House, Ways and Means Committee Chairman Dan Rostenkowski scheduled subcommittee deliberations for this week on one of the most controversial protectionist measures before Congress. The bill would set quotas on the import of textiles and apparel that could cut American purchases of such products overseas by nearly one-third. Moreover, sensing that the anticipated $150 billion U.S. trade deficit and the loss of American jobs will become major campaign issues next year, Rostenkowski warned that congressional Democrats will not accept any halfway measures from Reagan. Said Rostenkowski: "Unless he comes up with a plan that brings retribution against countries that keep out or unfairly drive up the price of U.S. products, he is guaranteed a crippling fight with Congress." The danger, many experts say, is that the protectionist fervor will get out of hand and endanger the U.S. economy.

Meanwhile, the tax-reform issue that was expected to be the No. 1 priority of both Reagan and Rostenkowski kept slipping further into the background, despite brave talk from both men. The President made another of his weekly sales-pitch trips, telling 2,500 senior citizens at a Tampa convention center that the present tax system is "like one of those horror movies from the 1950s--The Incredible Shrinking Paycheck." Rostenkowski told TIME, "If I wanted to walk away from tax reform, there are enough people whispering in my ear to drop it for me to do so. But I'm not going to do it." Both Dole and House Minority Leader Robert Michel expressed doubts that the Senate would have time to consider such a measure even if it passes the House. "It's not that we are opposed to it," Dole said. "It's the calendar." He did not have to add that when Congress reconvenes in January, the calendar will be marked ELECTION YEAR.

With reporting by Sam Allis and Barrett Seaman/Washington