There's a lot to be learned about the nuts and bolts of Washington - and the White House - from the nuts, bolts and screws case.
If you haven't followed it, the nuts, bolts and screws case is the administration's latest brush with Congress over trade policy. Superficially, it's an impressive victory. The administration rebuffed a congressional attempt to override President Carter's decision not to grant import protection to the industrial "fastener" industry - the firms that manufacture nuts, bolts and screws. The industry had wanted a 30 percent tariff increase on imports.
Mostly, however, the "victory" is illusory. Within a year, the industry may receive import protection. Moreover, the bruising struggle to defend the president's decision was costly one, in which the administration - led by Robert S. Strauss, Carter's Special Representative for Trade Negotiation - alienated some supporters and deepened the hostility of opponents. This "victory" will make promoting "free trade" tougher in the future.
The episode also helps illustrate why Carter has such thin and unenthusiastic support on Capitol Hill. Congress perceives a president who doesn't know how to use the powers of his office - a man who inspires respect neither for his stands on principle (because he cannot popularize those principles and thus make them politically attractive) nor for his talents as a backroom operator.
Moreover, the president is consistently inconsistent. Except for that, members of Congress do not know what to expect of him. At times, the administration's unwillingness to compromise simply has isolated it from congressional decision making. In other instances, the White House has flip-flopped, leaving supporters wounded and wondering.
In its own way, the nuts and bolts case highlights these flaws. Let it be said immediately that Carter's decision was defensible and, in economic terms, probably desirable. TheU.S. International Trade Commissions had recommended that the industry receive higher tariffs for five years - beginning at 30 percent and ending at 20 percent - but administration economists judged this proposal extremely costly.
According to their analysis, nuts, bolts and screws - which go into everything from typewriters to telephones to heavy-duty machinery - might have cost as much as $1 billion more over the five-year period. Meanwhile, only 700 to 2,000 extra jobs would have resulted from the higher tariff.
In part, the low number of jobs reflects the fastener industry's split structure. Importers have made their greatest peneration in the market for "standard" nuts, bolts and screws - those made in standard sizes and shapes. Domestic firms dominate "special" fasteners, often made in unique sizes for individual customers (such as automobile companies). Because production runs are shorter and consultation between buyer and seller essential, importers find it difficult to compete for this market.
But, with importers having a price advantage of 30 percent or more on "standard" fasteners, a higher tariff simply might increase import prices without doing much to allow domestic companies to recapture sales. Imports now account for about 44 percent of all sales - standard and special - up from 25 percent in 1971.
If this sounds sensible, there is one problem. The president's decision, taken in early February, conflicted with the administration's informal trade policy of more than a year. That policy was to talk "free trade" but to grant some protection to any industry that screamed loudly: shoes, television, steel and sugar. Indeed, trying to maintain this policy of accommodation, Strauss actually recommended that Carter give a 15 percent tariff increase to the fastener industry.
Carter's rejection of this advice was not itself fatal, if the president had thought through the political consequences. The fastener ruling might have signaled a tougher approach to trade cases, more accurately reflecting Carter's own personal commitment to "free trade" and the growing fears of worldwide protectionism. If the president wished to reverse direction - or, at least, shift emphasis - the fastener case was a good place to start.
But, apparently, he didn't. Instead, Carter (and probably Strauss, too) was lulled into the beliefe that he could score a cheap victory. The fastener industry is small (35,000 workers) and inexperienced politically. At one point, Strauss reportedly thought that a decisive victory would demonstrate his mastery of Capitol Hill, strengthening his bargaining position with foreign trade negotiators.
The script didn't play that way. The fastener folks hired experienced Washington lawyers. In Congress, there was a backlash that stemmed, in part, from the decision's inconsistency with what came before and after.
For, once the size of the fuss over fasteners became apparent> the White House granted trade protection in the very next case, citizenes' band (CB) radios (a 15 percent tariff). Outside the administration, virtually no one believes that the CB firms had a stronger case for protection than the fastener industry. So much for "principle" and a vigorous defense of free trade.
As it turned out, Strauss turned back the override votes narrowly. The House Ways and Means Committee backed the administration, 20-16. Although the issue still could have gone to the floor, Rep. Charles A. Vanik (D-Ohio), its chief sponsor, decide to ask the trade commission to do another study.
This may look like a Vanik surrender. It probably isn't. In fact, Strauss didn't relish fighting Vanik, chairman of the Ways and Means Subcommittee on Trade, on the floor. It seems likely that the two men have reached a tacit understanding: if the trade commission recommends protection again, the administration will react more favorably. For Strauss needs Vanik's support in winning congressional backing for any multilateral trade agreement.
Whether Strauss's new role as inflation adviser changes his perspective remains to be seen. But meanwhile, many members of Congress who went out on a limb for "free trade" and for Jimmy Carter feel betrayed. It's questionable whether they'll rush to the ramparts the next time.