Reagan Faults Capitol Hill for Stock Market Turmoil

President Reagan today put blame for the Wall Street trading turmoil, at least in part, on investor fears over “disturbing signs on Capitol Hill,” including a move toward enactment of protectionist trade legislation.

Senate Majority Leader Robert C. Byrd (D-W.Va.) urged Reagan today to meet with congressional Democratic leaders through the weekend to hammer out a compromise to reduce the budget deficit.

But White House spokesman Marlin Fitzwater said Reagan would go to Camp David, Md., for the weekend as usual and likely would meet with congressional leaders early next week.

Reagan, a day after softening his stance against tax increases, also said the government must show it is capable of slashing the federal budget deficit.

Addressing a jobs conference, Reagan repeated his concern about the gyrations in the market and said the Wall Street slide emphasizes “the need to send a clear signal that spending must be restrained.”

Less than 24 hours after announcing his willingness to conduct virtually no-holds-barred budget negotiations with congressional figures, Reagan said, “I think the market is reacting more to the actions and inactions of the government than the deficit itself.”

Reagan pronounced himself pleased with two new economic indicators released earlier today, the gross national product, which rose at an annual rate of 3.8% in the third quarter, and the consumer price index, which rose only 0.2% last month.

“There may have been hundreds of factors” behind the near-collapse on Wall Street, said Reagan, sitting as a panelist for a Labor Department seminar entitled “Work Force 2000.”

But he said there is “concrete evidence of an economy that is strong and fundamentally sound . . . an economy that has a bright future ahead of it.”

He added, however, that “those who have to make the decision on whether or not to invest in the future of our economy see some very disturbing signs on Capitol Hill. For one, a dangerously protectionist trade bill working its way through conference. If passed, that bill would threaten a spiraling trade war and could very well bring our economic expansion to an end.

“Of the roadblocks that could be thrown in the way of our economic expansion, Wall Street knows that protectionism is one of the worst.”