President Won’t Veto Plant-Closing Measure : Bows to Bush Campaign, Democrats; Aide Calls Action Allowing Bill to Become Law a ‘Cop-Out’

WASHINGTON — President Reagan, bowing to political pressure from Democrats as well as the George Bush presidential campaign, Tuesday accepted a bill requiring companies to give 60 days’ notice of plant closings.

Although he called the legislation “counterproductive” and “a step in the wrong direction,” Reagan said he was allowing it to become law without his signature because “some in the Congress have been more interested in scoring political points with organized labor than in saving workers’ jobs.”

The issue, which could be a significant factor in the presidential campaign, is the first of two politically sensitive matters facing the White House this week. It is considered likely, though not certain, that Reagan will veto legislation allocating funds for military programs in the next fiscal year.

‘Legislative Realities’

The White House, seeking to put the best face on the plant-closing measure, said popular support for the bill forced the President to accept the “legislative realities” of the day. In May, Reagan vetoed trade legislation he otherwise favored because it contained a similar plant-closing provision.

The President’s veto threat had led congressional Democrats to delay action on the trade legislation. When Reagan’s decision was announced Tuesday morning, debate on the trade bill was resumed in the Senate, which is expected to approve it today. It has already been approved by the House.

By avoiding a veto but also not signing the bill, Reagan took a step that Republicans hope will blunt a difficult campaign issue and take them out of the politically awkward position of explaining why the President did not want the federal government to make sure that workers were given warnings of impending layoffs.

His decision to allow the bill to become law without his signature is the first time that a President has taken such a course since Feb. 20, 1975, when President Gerald R. Ford accepted amendments to a food stamp program without signing the legislation, according to the Senate library. Reagan’s action was described by one of his aides as a “cop-out.”

The plant-closing bill becomes law at 12:01 a.m. Thursday, but enforcement does not begin until Feb. 4, 1989.

Under the new law, companies with 100 or more full-time employees at any single site would be required to notify the workers of any plant closings, including the termination of any single product line or operation within a plant, 60 days before the shutdown would take effect, if 50 or more workers would lose their jobs.

However, companies would be exempted if the closing or layoff was caused by “not reasonably foreseeable circumstances,” such as droughts, floods or cancellation of government contracts. Firms would also be exempted if the advance notice would have blocked them from obtaining capital or new business.

Reagan maintained that, although compassion demands that workers be given as much notice as possible, the federal government has no proper role in ordering such notification. He has also said that requiring the early notice creates an unfavorable investment climate and discourages business.

‘Political Shenanigans’

“The national interest . . . dictates that the majority in the Congress must be forced to stop playing politics,” Reagan said in a written statement. “In order to end these political shenanigans and to get on with the business of the nation--especially enacting responsible trade legislation--I have decided to allow the plant-closing bill to become law but without my signature.”

His decision was greeted by widespread applause in political circles, although the U.S. Chamber of Commerce predicted that “when businesses close prematurely because of these harsh regulations, advocates of plant-closing legislation will reap a bitter harvest.”

Vice President Bush’s chief of staff, Craig Fuller, said it “will make it more difficult for the political game to be played over the plant-closing issue” in the November presidential election.

Another source in the Bush campaign, reflecting the anxiety the legislation has caused the vice president’s supporters as well as other Republican political campaigns, said: “We’re relieved. It’s a loser issue.”

Issue for Dukakis

One indication of how politically useful the issue has been for Democrats is that Gov. Michael S. Dukakis, the party’s presidential nominee, has included a reference to the plant-closing bill in almost every speech he has given since May.

Day after day, he has received applause--from conservative ethnic and working-class white audiences, liberal party activists and blacks--when he has asked why the Administration would “veto a bill that would give hard-working American men and women 60 days in which to pick up the pieces of their lives and prepare for a new job when a plant or factory closes?”

At a news conference in Boston on Tuesday, Dukakis made clear that he intends to continue raising the issue, suggesting that he will emphasize that Democrats succeeded in forcing Reagan to adopt one of their programs.

Republican congressional leaders, including Senate Minority Leader Bob Dole of Kansas, Assistant Minority Leader Alan K. Simpson of Wyoming and House GOP Whip Trent Lott of Mississippi, had indicated that the likelihood of sustaining a Reagan veto was small at best.

The President is “swallowing something that he doesn’t totally like in order to get us off the dime” on the trade bill, Dole said.

‘Reason Over Rhetoric’

But House Speaker Jim Wright (D-Tex.) said: “We think this is a triumph of reason over rhetoric--a triumph of fairness over hide-bound ideology.”

In discussing another piece of politically volatile legislation, White House spokesman Marlin Fitzwater said that Reagan “has some very deep and grave concerns” about the defense bill.

He singled out cuts in the “Star Wars” missile defense program, formally known as the Strategic Defense Initiative, which would be trimmed to $4.1 billion from $4.9 billion, and shifts in spending priorities within the $299 billion allocated under a White House-congressional agreement.

In addition, he complained that it would limit the Administration’s options in arms control negotiations.

A Pentagon official, speaking on the condition of anonymity, said that Reagan was “leaning very strongly toward a veto.” But Defense Secretary Frank C. Carlucci, who is visiting the Soviet Union, has opposed a veto out of fear that the bill would then be open to new procurement restrictions as Congress reacts to the current scandal involving Pentagon contract fraud.

“If the President vetoes it, we may come off a lot worse,” the Pentagon official said.

Staff writers David Lauter in Boston and Sara Fritz and William J. Eaton in Washington contributed to this story.