The Teamsters are angry, the trucking industry is aghast, and the Carter administration is reeling from yet another blow to its voluntary anti-inflation program.
In submitting an initial bargaining proposal last week that far exceeds the government's 7 percent guideline for wage and benefit increases, the Teamsters were reportedly signaling their impatience with the government's refusal to modify the standards to make it easier for the union to comply.
The proposal, which could boost labor costs by more than 50 percent over three years, surely got Washington's attention, although the initial indications are that it may not achieve its desired result.
In the opinion of some industry and government officials, the size and circumstances of the proposal may well box all sides into positions that otherwise might have yielded to face-saving compromises.
For the government, which has already made some concessions to the union's need for hefty increases to cover the cost of existing benefit programs, any further flexibility in interpreting the guidelines would surely be viwed as a retreat under fire.
Similarly, for the union, unrealistically high targets will make it easier for critics from within the union to charge that its bargainers sold out if the eventual settlement comes in at a much lower level, as it almost certainly will.
And the union's opening bargaining ploy, which has already prompted expressions of shock and outrage from some company officials, could well help solidify unity within the industry, which has been plagued by factional dissension during past Teamster negotiations.
"The industry is now madder at the Teamsters than the Teamsters are with us," an administration official said.
"They've boxed everyone in, including themselves," an industry official said.
For the government, the "bomb," as one official called it, couldn't have come at a worse time.
A second straight month of surging prices, coupled with other signs that the voluntary program has failed so far to make any dent in inflation, has made it all the more important for the government to persuade the Teamsters and trucking companies to settle within the guidelines.
Moreover, it makes it harder for the government to bend the guidelines to ease compliance.
But, with prices rising at an annual rate of around 10 percent, it is also getting harder to convince unions to settle for 7 percent.
From the middle of last year, the administration singled out the Teamster talks as a critical test of the voluntary inflation curbs, with recent developments making it possibly the climactic test. Until last week, at least, officials were expressing optimism that a money settlement in the area of 7 percent was possible.
"Now it's going to be very tough," a highly placed administration official conceded.
What happened, according to informed sources, was that the Teamsters, about 10 days ago, pressed the government to say whether it would exclude certain increased costs from their guideline calculations.
Among them were a cost-of-living increase due to take effect the day after the old contract expires March 31, all instead of just part of the cost of maintaining existing medical benefits and pension increases designed to keep pace with the cost of living.
Counting the April cost-of-living increase as "old money" not covered under the guidelines would bring the wage proposal to less than 8 percent. However, counting it as the Teamsters did in their proposal would increase wages alone by more than 14 percent in the first year.
After the government tentatively rejected these proposals as outside the guidelines, Teamster President Frank Fitzsimmons unexpectedly dropped his money proposal on the table during a negotiating session last Tuesday in Florida, where the two sides have been talking since late last month.
In a tersely worded statement issued jointly by the union and industry bargainers, a reportedly angry Fitzsimmons accused the government of failing to respond fully and promptly to negotiators' inquiries. Government officials, also angry, said they did respond but that Fitzsimmons didn't like the answers.
Where this leaves the talks now is unclear. A bargaining session is scheduled for Monday in Florida, and efforts were under way last Friday to reopen the government-Teamster dialogue, which ended abruptly when Fitzsimmons made his money proposal and then stopped taking telephone calls from government officials.
A lot may depend on whether the industry, which, like the Teamsters, is bidding for the administration to hold off on industry deregulation proposals, hangs tough in the next three weeks of negotiations.
If it does, a nationwide Teamsters strike is possible, although President Carter has already said he would move immediately to block it through the courts or Congress.