Bush Denies His Remarks Spooked Wall Street

WASHINGTON — President Bush dismissed any suggestion Saturday that his call earlier in the week for banks to lower credit card interest rates spooked Wall Street into its biggest one-day drop in two years.

Asked if he felt he bore some responsibility for the selloff, Bush told reporters: “Not at all.

“We’ll see what happens Monday, but there’s no reason to get all concerned,” he said as he arrived for an early round of golf at the Holly Hills Country Club in Ijamsville, Md., about 20 miles south of the presidential weekend retreat at Camp David.

Market analysts surveying the aftermath of Friday’s 120.31-point plunge in the Dow Jones industrial average--nearly a 4% drop in stock values--had suggested that it was Senate enthusiasm for capping credit card interest rates at 14% that provoked a broad decline in bank shares and frightened traders into dumping holdings.

Later Saturday, Housing and Urban Development Secretary Jack Kemp, speaking on a CNN interview program, attributed the market’s drop to the Senate’s apparent willingness to regulate the cost of money--a move that in the past has had the effect of drying up credit and making a weak economy still weaker.

Kemp tried to separate Bush’s call last Tuesday for lower consumer interest rates and the Senate push later in the week to regulate those rates.

“The point is the President, as does Jack Kemp, everybody, wants to see interest rates on mortgages and on long-term T-bill rates and on credit card interest rates come down, and the President said he wants them to come down,” Kemp said.

“That’s a far cry from the action of the United States Senate, which was counterproductive and counter-intuitive, because any cap or credit controls, as Jimmy Carter tried in the early 1980s, causes a shortage of credit,” Kemp said, referring to the government-induced credit crunch in 1980 that caused a sharp recession.

Instead, Kemp blamed the market plunge on the move by Sen. Alfonse M. D’Amato (R-N. Y.) to legislate an interest cap and on the suggestion by the House Democratic leadership that such a bill would sail through the House. Kemp said that Bush was virtually certain to veto any such legislation, should Congress pass it.