Foresees ‘Second Boom’ in Attack on Democrats in South : Reagan Campaigns on Economic Issues

President Reagan, launching a final grueling campaign to help Republicans retain control of the Senate, Tuesday accused Democrats of wrecking the economy and declared that under his Administration the nation is “headed for a second boom.”

Campaigning in Georgia, Alabama and North Carolina as part of a 10-state swing, he seized the offensive on the one national issue that Democratic candidates have believed was working for them. In fact, Rep. Tony Coelho (D-Merced), chairman of the Democratic Congressional Campaign Committee, last week urged Democrats to keep the campaign focus on the economy because polls suggest it is “the key to Democratic success on Nov. 4.”

But Reagan painted a glowing picture of prospects for the economy. He said the recently released gross national product statistic (a modest 2.71% increase) and other indications show an economy “gathering momentum for even more growth, higher take-home pay and more new jobs.”

Little Sign of Boom

However, government figures indicate that the economy has been mired in an unusually long two-year period of sluggish, 2.5% growth, and there is little solid evidence that it is about to enter a second boom. Most economists believe that the economy will remain trapped in its weak track next year.

There are a handful of signs Reagan can point to that may bear out his forecast. There are finally indications that the decline in the dollar is about to help shrink the nation’s gaping trade deficit, which could add 1% or more to growth in the gross national product next year. Orders for durable goods--a figure that Reagan cited when he first made the second boom claim last week--grew at a very strong 4.9% rate last month.

But housing construction has slowed down, office construction is expected to slump as the tax overhaul law goes into effect next year and consumers seem unlikely to sustain the strong growth in spending that has helped maintain the economy’s momentum over the last year. And the unemployment rate has remained essentially unchanged since 1984 at 7%.

With recent polls showing Democrats gaining ground in the South, Reagan stepped up his attack on their candidates, declaring that they represent “tax, tax, spend, spend” policies that left the country “with negative growth, double-digit inflation and the highest interest rates since the War Between the States.”

Sees Judiciary as Problem

In campaigning for the reelection of Sen. Mack Mattingly in Georgia, Jeremiah Denton in Alabama and James T. Broyhill in North Carolina, the President said that a Democratic-controlled Senate would “torpedo” his choices for federal judges during the final two years of his presidency.

“We’ll find liberals like Joe Biden (Delaware’s Democratic senator) and a certain fellow from Massachusetts deciding who our judges are,” Reagan declared. “I’d rather have a Judiciary Committee headed by Strom Thurmond (South Carolina’s Republican senator, who is chairman of the committee) than one run by Joe Biden or Teddy Kennedy any day.”

His attacks on liberal Democrats provoked rousing cheers in all three states in which he campaigned.

Reagan, putting the Oval Office stamp on negative campaigning, saved his sharpest words for Terry Sanford, the 69-year-old former North Carolina governor and Duke University president who had pulled slightly ahead of Broyhill--45% to 43%--in the most recent Charlotte Observer poll.

He quoted Sanford as saying that in foreign policy “America behaves like a bully boy in the schoolyard” and accused him of believing in “blaming America first.”

Lashes Out at Fowler

In Georgia, Reagan lashed out at Democratic Rep. Wyche Fowler Jr., who is seeking to unseat Mattingly. Fowler, he said, had voted against him more than any member of the Georgia delegation and was “the only Georgian opposed to the balanced budget amendment who voted against the B-1 bomber, the Peacekeeper (MX) missile, strategic defense and 13 times against funding the freedom fighters (Nicaraguan contra rebels) in Central America.”

In Birmingham, Reagan refrained from attacking Denton’s opponent, four-term Rep. Richard C. Shelby, a conservative who generally has supported the President’s policies. But, in a strong appeal for the reelection of Denton, the first popularly elected Republican senator in Alabama’s history, he continued his attack on Democratic leaders, accusing them of trying to turn tax reform into a tax increase.

The President returned to Washington to spend the night in the White House before leaving this morning to campaign in seven other states--Indiana, South Dakota, Colorado, Nevada, Washington, Idaho and California.

Staff writer Tom Redburn in Washington contributed to this story.