Senate compromise likely on trade. Few believe House's tough Gephardt amendment will survive

By the time Japanese Prime Minister Yasuhiro Nakasone arrived on Capitol Hill Thursday to talk trade with lawmakers, the worst was over. Minutes before Mr. Nakasone's arrival, the House overwhelmingly passed the 1987 Trade and International Policy Act, intended to help reduce the nation's $170 billion trade deficit. The act included a hotly debated provision - sponsored by Rep. Richard Gephardt (D) of Missouri and narrowly passed by the House Wednesday - mandating United States retaliation against countries maintaining large trade surpluses because of unfair trading practices.

As an expression of congressional frustration over the burgeoning US trade deficit, the House bill constituted a warning shot across the bow of such trading partners as Japan. As a serious attempt to shape US trade policy, however, it represented but one more gambit in the legislative process.

The Senate is expected to act on its trade bill in June, and the Gephardt amendment, far and away the most controversial element of the House's 900-page bill, is given virtually no chance of inclusion in the Senate package.

One reason for that is the need to fashion a trade bill that President Reagan will sign or one that will attract the necessary two-thirds majority in both houses of Congress to override a veto. The President has said that he would veto any trade bill with the Gephardt language in it, and few Republicans or Democrats are sporting for a veto fight on trade.

Another reason why the Gephardt amendment is likely to be short-lived is the razor-thin, four-vote margin by which the House approved it - hardly a ringing endorsement. To many observers, the narrow margin of passage indicated a basic confusion among House members over the best way to reduce the trade deficit.

``Obviously, the Gephardt amendment would have had a better chance over here if it had gotten more votes in the House,'' notes Senate Finance Committee chairman Lloyd Bentsen (D) of Texas. Mr. Bentsen will lead the Senate in its conference with the House, where lawmakers will write a compromise trade bill.

``Basically, it passed in the House because Dick Gephardt is a very popular young man,'' says House Ways and Means Chairman Dan Rostenkowski (D) of Illinois, who opposed the Gephardt amendment and will lead the House delegation that will eventually meet with the Senate group to work out the final trade package.

``When it gets to conference,'' says Congressman Rostenkowski, ``it will be dropped because the Senate has strong opposition to it.''

In the House, the Gephardt amendment was the object of sometimes shrill debate. And there was an intense lobbying effort by partisans on both sides of the issue. Advocates championed the provision as a first and necessary step toward putting teeth into US efforts to negotiate equitable trading arrangements.

Detractors called it the first protectionist step toward a trade war. ``There wasn't a whole lot of middle ground,'' says Rostenkowski.

There is early evidence of that same polarization in the Senate, where Sen. Donald Riegle (D) of Michigan is expected to introduce Gephardt's proposal. Minority leader Robert Dole (R) of Kansas took to the Senate floor Friday to attack the Gephardt amendment and plea for bipartisan cooperation on the trade bill. ``I don't see much sense in having a political issue in '88,'' he said. ``I'd rather have a trade bill in '87.''

But there was only tough talk from Senate majority leader Robert Byrd (D) of West Virginia, who had earlier proclaimed his support for some sort of version of the Gephardt's proposal.

``If the President wants to veto effective legislation, that's his call to make,'' said Senator Byrd, questioning whether the amendment was indeed protectionist. ``I'm not going to run from the course just because someone uses the word protectionist.''

Byrd may be one of the few in Congress to feel that way. Last year, a slightly stiffer version of the Gephardt amendment passed handily in the House, supported by members secure in the knowledge that the bill they were voting for would never become law.

This year, ``the debate was more serious,'' notes Rep. Richard Schulze (R) of Pennsylvania, who supported the Gephardt amendment last year but opposed it this year.

Realizing that Congress was likely to produce a trade bill this year, many Democrats cooled in their support for the Gephardt provision, concerned that their party might go too far and be branded as protectionist.

A few members seemed to be dredging up memories of Sen. Reed Smoot (R) Utah and Rep. Willis Hawley (R) of Oregon - authors of the 1930 high-tariff bill that helped bring on a depression and pushed Republicans into the minority for decades.