Praise for the administration's $350 million Caribbean Basin economic plan was matched by anger yesterday as Capitol Hill, labor and the diplomatic community examined the president's proposals against their interests.
Senate Democrats greeted the plan with a mixture of faint praise and skepticism and called it a "cover" to funnel more U.S. aid to a single country, El Salvador.
In testimony before a House Ways and Means subcommittee, the AFL-CIO denounced the trade and tax incentives, saying they will encourage U.S. firms to move businesses out of this country, thereby putting more Americans out of work.
Stephen Koplan, a legislative representative of the powerful union, said, "There must be a more intelligent and meaningful way to address the very real problems of the Caribbean Basin."
Meanwhile, Secretary of State Alexander M. Haig Jr. and the foreign ministers of El Salvador, Honduras and Costa Rica left a meeting yesterday saying the initiative is "an essential U.S. response to the economic crisis" in their area and called on Congress and the American people for support.
On the Hill, Sen. Edward Zorinsky (D-Neb.) issued a warning to administration witnesses before the Senate Foreign Relations Committee that many in Congress consider the plan "little more than a cover for increased assistance to El Salvador."
The plan requests a $350 million supplemental appropriation to provide a mixture of investment incentives, trade preferences and economic aid to countries in the Caribbean region.
About one-third would be earmarked for El Salvador, the scene of a guerrilla campaign to overthrow a U.S.-supported civilian-military junta.
Proposing so much aid for El Salvador on top of funds already committed from other sources may endanger the whole Caribbean package, Zorinsky said.
The package was praised by Chairman Charles E. Percy (R-Ill.), and several Democrats endorsed the general outline while contending it would prove ineffectual.
Sen. Joseph R. Biden Jr. (D-Del.) called it "positive but insignificant" and predicted it would have "no major impact on the region." He said it envisioned increasing the formation of investment capital in the region at a rate of $500 million a year when about $1 billion of local capital is flowing out of those countries annually.
Biden also said his constituents tell him it is merely a "Trojan horse" for shifting economic aid funds to the American-backed regime in El Salvador.
William Brock, U.S. special trade representative, agreed with several Democrats that the original impact of the program will be small but said the long-term assurances of investment capital and trade benefits are necessary to encourage economic development in the countries.
Trade preferences in place now will expire for that region in 1985 and investors are wary of putting money there so long as it is in danger of losing preferential access to the hemisphere's major market, Brock added. He also contended that granting new preferences would have little significant impact on American industries and their workers' jobs.
The economic aid segment is viewed by several senators as the start of a long-range plan by the administration to emphasize bilateral loans at the expense of multilateral lending programs such as the World Bank.
If this is true, said Sen. Charles McC. Mathias Jr. (R-Md.), it amounts to "robbing Peter to pay Paul" by diminishing eventually the amount of U.S. contributions to multilateral institutions.
Assistant Treasury Secretary Marc E. Leland said the Caribbean package would not affect immediate funding of the multilateral groups but acknowledged the longer range projections of U.S. support for them is to be diminished.
The AFL-CIO's Koplan told the House subcommittee, "The administration's trade incentives are ill-conceived and unthinkable when balanced against the miseries brought by nearly 9 percent U.S. employment."
Rep. Sam M. Gibbons (D-Fla.), chairman of the trade subcommittee, said the legislation will probably pass, but some changes will be made, including proposals to lessen the effect on U.S. industries of imports of shoes, sugar and "problems in general of the type the AFL-CIO described."