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O'Neill Decries Trade Deficit : Says Reagan's Stance Is Costing 3,500 Jobs a Day

September 05, 1985|KAREN TUMULTY and BOB SECTER | Times Staff Writers

WASHINGTON — President Reagan "doesn't give a damn" about a flood of imports that is costing 3,500 U.S. jobs a day, House Speaker Thomas P. (Tip) O'Neill Jr. charged Wednesday, adding that trade issues will be a top priority as Congress returns from its monthlong recess.

During the recess, O'Neill said, congressmen found that trade is of far greater concern to their constituents than the tax reform package Reagan hopes will dominate the legislative agenda.

"I found very little sentiment for the President's tax plan" among Boston-area voters, the Massachusetts Democrat said. "The people in the street, they never even mention it."

Their chief worry, he said, is the continuing budget deficit, followed closely by the trade deficit.

This year's trade deficit is projected to reach a record $150 billion. Many economists say the two are linked--that the budget deficit is keeping interest rates and the U.S. dollar high, making it difficult for U.S. businesses to compete in world markets and at home.

"They are just frightened," O'Neill said of his constituents. "They are upset because the President doesn't give a damn, doesn't care whether we lose 3,500 jobs a day." As evidence, he cited Reagan's decision last week not to impose quotas that would protect the import-battered shoe industry--a decision that O'Neill called "the wrong thing."

Sen. Wilson Agrees

Sen. Pete Wilson (R-Calif.), although criticizing O'Neill's comments as "too harsh," agreed: "There's a very high level of frustration (with Reagan's stands on trade). Many of us who have been among the President's staunchest supporters think that the Administration has not been strong enough or tough enough as a trade negotiator."

Reagan has a "perception that going on and simply turning the other cheek will bring about free trade . . . . He's erred on the side of too much restraint," Wilson said. "There comes a time when you have to recognize you're being dealt with unfairly and take steps that are required to remedy the situation."

O'Neill and Wilson made their remarks on the House's official first day of business after its August recess. However, many members are not expected to return until Monday, and the House agenda will be light this week.

South Africa Sanctions

The Senate will not be back in session until Monday, facing the politically explosive issue of economic sanctions on South Africa as the first item on its agenda.

O'Neill said he expects Congress to remain in session until around Thanksgiving, several weeks past its Nov. 1 adjournment target. Both Democrats and Republicans in Congress expect this fall to be marked by a series of confrontations with Reagan over a variety of issues, including trade, tax policy, agricultural programs, spending bills, raising the national debt ceiling to $2 trillion, toxic waste cleanup and immigration.

As O'Neill insisted that Reagan was out of touch with top national concerns, White House spokesman Larry Speakes told reporters that the President will be "dealing from a position of strength" in pressing his legislative agenda through Congress. Reagan "enjoys an unprecedented second-term popularity," Speakes asserted.

Cites Approval Rating

He produced a Gallup Poll showing that Reagan's approval rating has risen to 65% from 62% in January, contrasted with an average 13-percentage-point drop during the first nine months of his post-World War II predecessors' second terms.

"He didn't get to 65 points with a song and dance and a nice smile," Speakes said. "He got there because the cumulative acceptance of his programs is deep, widespread."

However, O'Neill said that, as U.S. companies continue to lose ground against foreign competition, national attitudes on trade are changing--even among those who would agree with Reagan's basic philosophy that the government should interfere as little as possible in the flow of trade.

"The free traders suddenly have become fair traders," particularly when they have discovered that foreign governments are engaging in such unfair trade practices as subsidizing their exporters, he said.

Major Legislation Seen

O'Neill predicted that Congress will pass major trade legislation before it adjourns. The House Ways and Means trade subcommittee already has 180 bills pending before it.

Although House leaders sense no great support for tax overhaul, O'Neill said that they will live up to their promise to Reagan to push ahead on tax legislation--in part, he said, because Reagan promised to "clobber us" if no bill emerges from congressional taxation committees.

"We're going to have great difficulty, but we'll get it on the (House) floor, and the leadership is going to do its part if the bill is fair and equitable," O'Neill said.

But ultimate passage, he said, will depend largely on the presidential popularity that Speakes has said is the White House's most important asset.

"Unless the President can really move America, there's no desire to change a (tax) law that has been in effect 75 years," O'Neill said.

Reagan plans to make about one trip a week this fall, promoting his tax proposal in cities nationwide. He began the campaign Monday in Independence, Mo., and today will travel to North Carolina.

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