It may not qualify as a modern-day Sherlock Holmes mystery, but the Case of the Missing Shoe-Import Option played an important part in President Carter's decision on how to reorganize his White House staff.
Carter sent his plan for reorganizing the Executive Office of the President to Congress on July 15. Unless vetoed by the House of Senate, it will go into effect this fall - the first step in his promised effort to reorganize the entire executive branch of government.
Most of the publicity has centered on Carter's struggle to achieve his goal of a 30 per cent cutback in White House personnel, a move that required him to lop off several agencies that have been part of his personal domain.
But presidential aides who worked on the reorganization project insist that "this is not just a game of numbers and boxes on the organization chart. It's really a question of how to improve the decision-making that takes place here."
An unpublicized part of that process was a series of case studies of decisions made in the early months of the Carter Administration - a systematic effort to profit from both the failures and successes of those earlier, sometimes improvished, struggles to staff a presidential decision.
Stephen Hess, the Brookins Institution scholar of the presidency, said the idea of a president putting his own decision-making machinery under the microscope early in his term was "quite unique and exceedingly valuable. It focused attention on the process, not just the pieces of the machinery."
The executive office reorganization project was directed by A. D. Frazier of Carter's staff and Harrison Wellford of the Office of Management and Budget. The case studies were the work of Robert Cunningham and four consultants, Mac Destler, Sam Carradine, John Helmer and Air Force Maj. Len Vernemonti.
They reviewed the working files and interviewed the key participants in eight early Carter decisions. The decision they examined involved food stamps, the minimum-wage rate, Social Security financing, shoe imports, rural telecommunications, wiretap legislation, the breeder reactor and controls on conventional arms sales.
The Washington Post has been given access by the White House to a summary of the case study conclusions and to the entire study of the shoe-import decision.
From them, a reader can get an insight into the serious concerns that prompted the President to try to improve his staff operations. But evenmore, one gets a rare look at the way in which bureaucratic conflicts and sometimes sheer accidents can shape a major decision by the American government.
In the shoe case, for example, the most striking finding of Cunningham's team was that the option the President finally adopted had been discarded in early staff decisions and re-emerged almost by chance on the eve of his final decision.
The shoe-import problem was chosen for study because it presented a tough set of foreign and domestic policy choices at the beginning of the Carter administration.
The problem was waiting for Carter the moment he set foot in the White House. On Jan. 6, two weeks before his inauguration, the International Trade Commission recommended that a combination of tariffs and quotas be imposed on non-rubber imported footwear, to protect U.S. industry from what it called "serious injury."
President Ford had rejected a similar recommendation, and the ITC report put Carter squarely on the spot between powerful domestic labor and political interests seeking to protect U.S. jobs and international pressures to launch his administration on an anti-protectionist note.
The major foreign producers of the low-price shoes were Taiwan and Korea, but other countries would be watching what Carter did on the first major trade issue to reach his desk.
Here, in summary, is what the case study shows about the way Carter and his associates made that decision:
The implications of the shoe decision were spelled out in a general discussion of trade issues in Presidential Review Memorandum 7, which the National Security Council gave Carter the day after he became President.
On Feb. 4, career officials in the Office of the Special Trade Representative sent a memo on the case to Carter's Economic Policy Group - which includes the Vice President, five Cabinet secretaries and the heads of five units within the Executive Office of the President.
That memo listed five possible options, ranging from the free trade direction to strong protectionism. One of the five was the negotiation of Orderly Marketing Agreements with the main exporting countries. An Orderly Marketing Agreement (OMA) is a formal contract between the countries, limiting the volume of trade in a commodity.
It is tougher and more binding than a voluntary decision by the exporting country to limit its exports, but it's less protectionist than an import quota or restrictive tariff imposed unilaterally by the importing country.
It was the OMA option, which promptly disappeared from view only to be embraced by Carter at the end of the process, almost two months later.
Through most of February and March, various agencies pressed their favorite solutions in a variety of preliminary meetings, while others in the White House coped with pressures from Capitol Hill and the AFL-CIO headquarters.
On March 25, the Economic Policy Group met on the issue and narrowed the choice to two options. Everyone favored adjustments assistance for the industries and communities affected by the shoe imports. But the State Department, Treasury, the Council of Economic Advisers and HUD wanted to grant no further import relief, while Labor, Commerce, Agriculture, the Office of Management and Budget and the Special Trade Representative's office favored a tariff rate quota which would put a restrictive duty on imports above a certain level reached in the past.
The OMA option was not even mentioned in the memo Special Trade Representative Robert S. Strauss sent the President on March 25, summarizing the view of the Economic Policy Group.
But, by chance, one of Strauss' subordinates sent a separate report on that meeting to Vice President Mondale. In it, he noted that Stuart Eizenstat, the President's domestic policy assistant, had suggested that OMAs might serve as a middle option. The memo to Mondale implied that the Economic Policy Group was moving Carter toward a "no-relief" position which might bring serious problems with Congress.
That was on a Friday. On Monday, March 28, Carter met with the Economic Policy Group. Through a foulup in White House paper flow, Eizenstat failed to receive a copy of Strauss' memo to the President and thus was unable to provide the customary domestic policy staff comment for the President.
But at that meeting, the focus of discussion swung back to the long-ignored OMA option. The two alternatives which had been the focus of staff work in the Economic Policy Group were dismissed, for all practical purpose, and Carter instructed Strauss to prepare a memo on the OMA approach.
Even before Strauss could comply Eizenstat came back to the President with his won memo, recommending the OMA decision. When Carter returned it on March 30, he did so with a penciled noted saying that he wished he had been given such advice before the March 28 meeting.
On March 30, Strauss' memo arrived and he too came down on the side of the OMA option. But that was not the only memo the President received on the issue that day; indeed, the case study authors note, "a veritable blizzard" descended on him.
The State Department weighed in with a memor criticizing Strauss's suggestion. It argued that there was a big difference between the Orderly Marketing Agreement and a voluntary decision by the Taiwanese and Koreans to restrict exports. The OMA approach was a lot more protectionist, the State Department said, and should be rejected. The case study authors note that the distinction had been blurred at the crucial March 28 meeting and only now was being argued in strong terms.
On the other hand, the Labor Department, in its memo to the President, said voluntary restraints were inadequate and OMAs only marginally better.
Finally, a voice from London chimed in, with the official making preparations for the London economic summit urging voluntary restraints as the best posture for the United States to adopt in advance of Carter's first big international meeting.
On March 30, Carter decided to take the Strauss-Eizenstat suggestion and on April 1, the OMA option, which had been discarded early in the game, became the policy of the American government.
In its critique of the decision-making process, the review team said that in this case, the executive office machinery short-changed the President in several important ways:
By failing to force a search for all possible courses of action, it allowed and perhaps even encouraged the competing departments and agencies to go right on lobbying the President for whatever policy they preferred. In bureaucratic jargon, this meant "aligning the principals on a narrow set of options," rather than promoting serious consideration of a broader range of possibilities.
By eliminating the OMA option early and then reintroducing it late, it failed to produce adequate staffing on that option and "precluded a clear and consensus-building discussion" of that policy.
It let the President "go into an unstructured meeting which actually may have misinformed him on his real options."
And it subjected the President to that "blizzard" of last-minute advocacy memos, "all focusing on the same issue but none presenting an accurate synthesis."
The terms of the study specifically excluded any judgement on the "rightness" or "wrongness" of the final policy decision, and there is no implication that Carter made a mistake in recommending the OMA route for protection of the shoe industry.
But the process itself was clearly flawed. Other case studies turned up other problems - staff members acting as policy advocates rather than "honest brokers" in their memos to the President; staff failures to winnow options to eliminate those which were plainly unsuitable; occasional foulups in the cross-over between the two "paper loops" that have been running inside the White House; and a rather chronic inability to factor in political and legislative strategy considerations early enough in the policy process.
On the other hand, the case studies focused on several strengths that had not been universally recognized in the White House senior echelons. The three studies on international policy decisons showed the National Security Council's process of Presidential Review Memorandum (PRMs) was, as one top aide said, "not perfect but good enough to be imitated." It will serve as the model for the revamped policy staff management system for domestic issues which Carter announced July 15.
A second important and upbeat finding was that the technical information and detailed policy advice furnished by the bureaucracy was of high quality. In the shoe case review, an early policy memorandum from the office of the Special Trade Representative was praised as a "superb staffing document."
Carter's initial inclination to reduce the size of the White House staff was strenghtened by the case studies's conclusion that a "strong permanent government expertise exists and is there to be used." As one senior aide said, the studies convinced him that "we don't have to duplicate the rest of the government here at the White House, we only have to be smart enough and humble enough to draw on it."
The case studies also added an important dimension to what the reorganization team learned in its analysis of the functions of individual executive office policy and administrative units.
Major changes have been ordered in White House staffing as a result of this project. Whether the new mechanisms will improve the ability of the President to get the information he needs for his decisions remains to be seen.
But those who worked on the project have come away impressed by Carter's belief that governmental machinery can be fine-tuned.
John Helmer, a consultant on this project who has done similar reorganization work for governments in Great Britain and Australia, said, "I know of no other government in the world that would do what Carter has done - order an assessment of his own decision-making process after only a few months in office. You've got to admire his guts, whether or not you agree with his conclusions."
Robert Cunningham, the Woodrow Wilson school graduate who was borrowed to direct the case studies project, said he received "incredible co-operation" from White House officials. "These people," Cunningham said, "really look at themselves as being on a learning curve."