President Adds a Little Politicking to His Vacationing : White House: Bush says Democrats are blocking his domestic policy. He confirms that he will not fund an extension of unemployment benefits.

Even though he is “unashamedly, unabashedly on vacation” here, President Bush is keeping an eye on the slowly emerging 1992 presidential campaign from his seaside home.

On Friday, he sounded out themes for his expected reelection bid, telling reporters from Maine at a news conference that the Democrats have “come upon a theme: Go after the President on ‘no domestic policy.’ ”

“You begin to hear these guys charging out of the woodwork with one central theme: All attack the President and all go after ‘no domestic program,’ ” he said, jumping into the fray for the second time in two weeks as Democrats have stepped up their attacks.

“Well,” he said, “they’re wrong on that . . . . They may move from that position but we’ll darn sure be telling the American people that, if we only had more people in Congress who agree with what I was elected to perform on, we’d have a very vigorous and good domestic program.”

For Bush, a veteran of the political wars of the last three decades, an opportunity to engage in political chit-chat can rarely be passed up--vacation or not.

Despite his declaration that “I don’t feel like joining the fray right this minute, it’s too relaxing here,” he did just that. The slow start to the Democrats’ 1992 campaign, he said, is a sign of “no overconfidence.”

Later, at the Cape Arundel Golf Club, as he was about to begin what has become an almost daily 18 holes of golf, Bush was asked if he took “secret delight” in the Democrats’ “disarray.”

“I don’t consider them in disarray. They’re attacking me all the time,” he said, adding in a wounded tone: “It’s just terrible . . . . What the heck. What can a guy do?”

To the Maine reporters, the President pointed out that New York Gov. Mario M. Cuomo has been “talking about capital gains,” suggesting that Cuomo supports Bush’s so-far unsuccessful fight to obtain congressional approval of a cut in the tax on certain investments. Cuomo has been mentioned frequently as a potential Democratic presidential candidate, although he has carefully refused to give any encouragement to his supporters.

“When you hear Gov. Cuomo talking about capital gains, why, you have to wonder what’s going on. But I’m glad he is, because that’s something we need very much,” Bush said.

But what Cuomo called for recently was a cut in the capital gains taxes on long-term investments that would be tied to an increase in the federal income tax paid by those with the highest earnings--a step Bush has not proposed.

With Democrats beginning to shape a campaign to unseat Bush based on tapping what they hope is voters’ dissatisfaction with the President’s domestic performance, the President defended his approach to domestic issues. Bush has yet to declare his political intentions formally, although he has said that only health problems would keep him from running for reelection.

“We put forward initiatives in all these areas such as education and anti-crime legislation, transportation, energy--all good, sound programs. We simply can’t get them through the Congress,” he said.

Later in the day, the President was urged by a contingent of more than 100 people representing organized labor to make $5.2 billion in federal funds available for the long-term unemployed--a step that he confirmed Friday he would not take.

The demonstrators marched from downtown Kennebunkport to a roadblock near the Bush estate. Secret Service agents allowed 10 of them to continue on to the edge of the President’s driveway. “If the Recession is Over, Where are the Jobs?” read one of their signs.

The demonstrators said they had hoped to meet with Bush or at least a representative of his Administration. But no one emerged, and Secret Service agents eventually ordered them to depart. “We’ll be back,” demonstrator Vinnie O’Malley declared.

Bush told the reporters that he would sign “the Democratic bill” providing the funds but not an emergency declaration needed to actually release the money from the federal Treasury. The President is expected to act on the measure this morning.

He said that signing the bill--even if he blocks the release of the money--”at least demonstrates that I am concerned in terms of economic benefits.”

The legislation was passed by a voice vote in the Senate on Aug. 1 and by an overwhelming vote of 375 to 45 in the House a day later--a margin that reflected widespread support among both Republicans and Democrats.

“It looks like the national economy is recovering,” Bush said, but he added: “That’s pretty hard to tell somebody that’s out of work.”

Democratic leaders in Congress quickly criticized Bush’s announcement.

“I think the President has made a serious mistake. If he thinks this is not an emergency, he is wrong,” House Speaker Thomas S. Foley (D-Wash.) told reporters.

“The recession is not over, the unemployed still need our help and the President has made a cynical and heartless decision,” House Majority Leader Richard A. Gephardt (D-Mo.) said in a statement issued in Washington.

“The President has made it clear that he is more concerned about emergencies abroad than emergencies here at home,” added Senate Majority Leader George J. Mitchell (D-Me.).

Rep. Thomas J. Downey (D-N.Y.), who led the House fight for expanded benefits, called the President’s action “a cynical attempt to obscure the fact that once again the Bush Administration has decided to ignore the suffering of jobless Americans.”

The AFL-CIO, the nation’s largest labor organization, also criticized Bush, saying that he is ignoring the suffering of millions of Americans.

On the other side of the aisle, Senate Minority Leader Bob Dole (R-Kan.) said that the Democrats had rejected his extended-benefits alternative because they “wanted a political issue, not a bipartisan solution.”

The Labor Department said Thursday that, for the week ending Aug. 3, the number of Americans filing new claims for unemployment benefits increased by 8,000 from the week before, to 408,000.

In the interview with Maine reporters, Bush defended John H. Sununu, the White House chief of staff, whose use of Air Force jets and a government automobile for personal and political travel got him into hot water in the spring.

“John Sununu has my full confidence. He’s doing a first-class job,” Bush said.

He added: “Don’t believe the gossip columns. It’s a funny season in Washington. Kind of not too much happening down there. Congress is out. The President’s gone. And so you’ve got a lot of tick-tack stories going--or tick-tock going back and forth on the inside. Who’s winning, who’s up, who’s down.”