Brady Under Fire for Ethnic Reference : Race relations: Some Japanese-American activists call for Treasury secretary’s resignation. Spokesman calls remark a ‘slip of the tongue.’

Treasury Secretary Nicholas F. Brady, already under fire from conservative Republicans for the Bush Administration’s economic policies, came under new attack Saturday after referring to the Japanese as “Japs.”

Despite Brady’s quick apology, some outraged Japanese-American activists demanded his resignation and called on President Bush to fire his longtime friend if Brady refuses to step down. But the White House showed no inclination to do so.

Brady’s reference to “Japs” came during an informal but on-the-record discussion with business reporters here Thursday. He began the session by discussing the nation’s economic trend and then criticized those who speak disparagingly of America’s global economic standing, citing a string of statistics for support.

It was then that Brady, whose sometimes-rambling speaking style resembles that of the President, said: “We have been told that our workers are idle and ill-educated, our goods uncompetitive, our managers inefficient and we can’t compete with the Japs or Germans or, for that matter, anybody else in the world.”

A Brady spokeswoman characterized the reference as “a slip of the tongue.” When a reporter called his office about the statement on Friday, Brady issued this statement: “At no time did I intend to offend anyone. If I did, I apologize.”

But that did not mollify Japanese-American activists and others. Some congressional Democrats, sensing a new political opening, also seized on the incident to support their claim that the Republican Administration is out of touch and insensitive.

“The problem with Secretary Brady is that his social thinking is offensive and 50 years out of date, just like his economic thinking,” said Rep. Norman Y. Mineta (D-San Jose), a Japanese-American who was imprisoned in an internment camp in Wyoming after the attack on Pearl Harbor.

“Maybe he’d like to put me in an internment camp, too,” Mineta said. “He ought to resign for saying something so damned stupid and racist.”

Rep. Robert T. Matsui (D-Sacramento) said in an interview Saturday that “Brady ought to resign because he doesn’t understand economics and is out of touch with people--but particularly for what he said.”

Matsui also said the remark should be “expected out of an Administration that used Willie Horton ads and never thought it was racist.” During the 1988 presidential campaign between Bush and then-Massachusetts Gov. Michael S. Dukakis, Bush supporters aired a controversial television ad featuring Horton, a black Massachusetts inmate who attacked a white couple after not returning from a weekend furlough.

Asked Saturday about the new calls for Brady’s resignation--or firing--White House spokeswoman Judy Smith said Brady retains the President’s full confidence.

“Secretary Brady is doing a fine job. And the President appreciates his advice,” Smith said.

Bush has consistently backed Brady amid calls for his resignation by conservatives still angry at Brady--and Bush--over the 1990 budget agreement with Congress. Among other things, that agreement led to higher taxes--dealing a blow to Bush’s credibility after his 1988 campaign pledge: “Read my lips. No new taxes.”

Dennis Hayashi, national director of the San Francisco-based Japanese-American Citizens League, agreed with Matsui and Mineta that Brady’s apology might be insufficient.

“The question is whether or not his usage of that term actually reflects a certain attitude on his part toward Asian-Americans,” Hayashi said. “There should be a review of whether he should be relieved of his duties if he actually holds such racial views.”

Staff writer Sonni Efron in California contributed to this story.