WASHINGTON — President Reagan, during whose term the national debt has doubled, today blamed "50 years of deficit spending" for causing the stock market's historic decline, while congressional leaders called for presidential leadership to restore confidence in the economy.
The White House quickly threw cold water on the legislators' call for a budget "summit." Spokesman Marlin Fitzwater said Administration officials feel that calling in leaders of Congress for an economic summit would only "give a platform" to members of the House and Senate who advocate a tax increase--over Reagan's vehement opposition.
During a picture-taking session with visiting Indian Prime Minister Rajiv Gandhi, Reagan said the White House is "in constant consultations" with government experts and private investment leaders to resolve the crisis and said, "Everyone has been caught by surprise."
Reagan, reiterating his statement from Monday that the economy is stable, argued that other business measures are solid and should not be affected by Monday's unprecedented 508-point drop in the Dow Jones industrial average.
Told that "some on Wall Street say they want some leadership from the White House," Reagan lashed out: "Why don't they fix the blame as I have, to where it belongs: on the legislature, which has gone on now for more than 50 years defending deficit spending."
In the Reagan years alone, the federal budget deficit has skyrocketed, doubling the national debt to more than $2 trillion.
Analysts have said the budget shortfalls, along with the nation's trade deficit--$114.1 billion through August--contributed to the lack of confidence that triggered the decline.
The government's chief economic overseers, meanwhile, raced to Washington or canceled plans to leave to allow them to keep a watchful eye on the gyrating markets.
Treasury Secretary James A. Baker III cut short his European trip and rushed back to the capital; Federal Reserve Chairman Alan S. Greenspan canceled a speech today to the American Bankers Assn. in Dallas. Greenspan's vice chairman, Manuel Johnson, called off an evening speaking engagement in New York.
The first concrete step to respond to the wild drop was taken by the Fed this morning. In a one-sentence statement, Greenspan said the Fed, "consistent with its responsibilities as the nation's central bank, (is ready) to serve as a source of liquidity to support the economic and financial system."
On Capitol Hill, both Republican and Democratic leaders--saying "we need some leadership"--called on Reagan to convene an economic summit as a confidence-building measure.
House Speaker Jim Wright (D-Tex.), calling the stock market plunge a "rude awakening," said Reagan should join with leaders of both parties for a summit, which "could do much to restore the confidence America so vitally needs."
Sen. Lawton Chiles (D-Fla.), chairman of the Senate Budget Committee, went so far as to introduce a non-binding resolution calling for an economic summit "to deal with the economic crisis."
Senate Majority Leader Robert C. Byrd (D-W.Va.) said he hopes Reagan will call together congressional and financial leaders to show the world that the government will act to stop a crisis in financial markets.
Senate Minority Leader Bob Dole (R-Kan.), a candidate for the 1988 GOP presidential nomination, said action to restore confidence must "come from the top, the President."
"Someone has to take charge," he said, adding, "I do believe the deficit out there is public enemy No. 1. It isn't going to go away."