President Reagan and Republican congressional leaders agreed yesterday to write new trade legislation in an attempt to counter bipartisan pressure in Congress for protection against imports.
But while the Republicans were working out their problems on trade, one of the major issues on the agenda this fall, they were giving the president bad news on another: tax revision. The GOP leaders suggested that Reagan's tax overhaul plan may not clear the Senate until next year.
After his first meeting with Reagan since Congress returned earlier this month, Senate Majority Leader Robert J. Dole (R-Kan.) said they agreed to jointly fashion a "meaningful legislative initiative" on trade that White House officials said would give the administration expanded powers to combat unfair trade practices.
The agreement yesterday appeared to represent a major political effort by Reagan to help Republicans field an aggressive defense against charges that the administration's free-trade policies have cost Americans millions of jobs because of the record trade deficit.
Dole, while not being specific about provisions in the new Republican initiative, said it could be offered as a substitute to the textile protection measure that is considered almost certain to pass Congress this fall.
However, Dole said that protectionist sentiment is running so strong in Congress that "I don't believe that we can conceive of any plan" that would "stop all the action" because trade has become "a highly charged political issue."
Such legislation could also be used by the White House to gain support for Reagan in an anticipated veto confrontation over upcoming bills to protect such industries as textiles and shoes.
Vice President Bush signaled this newly aggressive administration approach to trade yesterday when he told the Commonwealth Club in San Francisco:
"We have made it clear that we are not kidding -- no more Mr. Nice Guy."
Bush said the administration plans to "vigorously" enforce unfair trade laws and "meet fire with fire" by matching subsidized export financing by other countries with a $300 million U.S. "war chest."
He said the administration would continue to push for a new round of international talks to reduce trade barriers.
"We will be absolutely ferocious in our efforts to win more markets for our exporters. We have made it clear that if there is no other way out, we will use the sanctions available to us in long-established international trade agreements when Americans are wronged," Bush said.
Specifically, White House spokesman Larry Speakes said the new Republican trade initiative would give expanded authority to the U.S. trade representative to move against unfair trade practices in the areas of dumping by other countries, subsidized exports, and pirating of American patents and copyrighted material. Besides new legislation, Speakes said Reagan would more aggressively use powers that he already has.
In his San Francisco speech, Bush joined his articulation of the new trade policy with an attack on what he described as the "siren call of protectionism" and a defense of the Reagan administration economic policies.
"In spite of our trade problem," he said, "we've created 7 1/2 million new jobs since 1980 and our economy has put more Americans to work than ever before in our history."
In congressional testimony yesterday, Frederal Reserve Board Chairman Paul A. Volcker praised the Reagan administration's opposition to protectionist bills, which he said could seriously harm the economy and bring about an increase in interest rates.
On tax revision, House Minority Leader Robert H. Michel (R-Ill.) said yesterday that a bill would probably get to the Senate about Nov. 1. Dole said "we have got a problem" because, given the congressional calendar, "and it's just not realistic to assume, unless there is a speed-up in the House markup, that we're going to do it this year."
"To get it on the president's desk by New Year's Day is going to be tough," Dole said.
Later, Dole called on the House to accelerate consideration of the tax bill and "not just drop it in our laps in mid-November."
The White House said earlier that Reagan wants Senate approval this year so as not to delay the effective date of the bill until 1987.
Yesterday, presidential spokesman Larry Speakes quoted Reagan as saying that with Republican support, "We can move the bill through the Senate and give the American taxpayer one of the best Christmas presents they will ever receive."
"We know it can be done," Speakes said, "and the president is going to push for it."