Cut Interest Rate Again, Bush Urges Fed : Politics: While raising campaign funds in Texas, President notes economy may be key issue in his reelection. He aims fierce criticism at Congress.

DALLAS —  President Bush on Friday called on the Federal Reserve Board to lower interest rates further and acknowledged that the faltering economy is likely to become the central issue in his reelection campaign.

“People are saying, ‘You’re not helping us,’ ” Bush said, and added: “Any time you’ve got a bad economy, people are going to look at anybody that’s in office.”

In urging that the Fed take new action to cut interest rates, Bush departed from the usual pattern of presidential winks and nods and spoke with unprecedented bluntness.

“I’d like see them down some more,” Bush told a television interviewer as a two-day Texas fund-raising kickoff to his still-undeclared presidential campaign was overshadowed by grim economic news.

The President and his advisers clearly hope movement by the Fed might at last ignite a recovery. But, on a day when government statistics showed an increase in unemployment and a dip in leading economic indicators, Bush struck an unusually candid tone as he described the political task he now faces.

“I can’t ask a guy that’s thrown out of work . . . to think everything I’m doing is perfect,” he conceded. But he said he intended in the coming campaign to “draw the lines” to persuade disenchanted voters that economic problems are the fault of his opponents.

“I’m not going to roll over and let them misrepresent my record,” Bush vowed Friday in one of a series of interviews with Houston television stations as he aimed more fierce blasts at a Congress he said he would hold responsible for economic ills.

The relentless national focus on a stalled economy has cast a pall over what advisers had hoped would be a triumphant return to the campaign trail by Bush and forced him to mount an angry defense.

After a speech Thursday night that laid out the likely themes of a defiant campaign, he told an interviewer that he felt good because he had “slugged back at these guys who have been sniping at me for six months.”

At the same time, Bush continued his attempts to cast an optimistic light on the economy, saying in remarks at Marlow Industries here that he preferred to describe a half-empty glass as “half full.”

“If they hear all this bad news all the time, people are going to get gloomy about it,” Bush said. “It’s a good time to buy a house. It’s a good time to buy a car. Interest rates are substantially lower.”

But his remarks left little doubt that, after months of insistence that the economy was on its way back to health, the President had adopted a new strategy designed to face up to its ills.

With polls showing his reelection prospects linked to the nation’s economic problems, it was clear the President was determined to shift the blame from himself.

“What we’ve tried to do, it gets blocked,” Bush complained in one interview. He said he had been taking criticism “like a placid punching bag” and vowed: “I’m not going to do that anymore.”

Indeed, in two days of fund-raising events here and in Houston, Bush was unmistakably back on the stump, testing a message that blames the Democratic-controlled Congress and its “old, tired thoughts” for sending the economy into a rut.

“Some of the liberal Democrats that control this Congress think the only chance they have to defeat me is to talk this country into hard times,” Bush told one interviewer Friday.

And in his speech later Friday, he lashed back at Senate Majority Leader George J. Mitchell of Maine, who had sought to block a Bush proposal on unemployment benefits and had compared Bush unfavorably with former President Herbert Hoover.

“He is not going to be able to dish it out and then be unable to take it,” Bush said of Mitchell. “I am not going to catch his javelins anymore.”

Bush did not hesitate earlier Friday when asked by an interviewer what the central issue of the campaign was most likely to be. “Economy,” he said. “Jobs. Getting America back to work.”

At the same time, with polls now showing public concern about Bush’s apparent preoccupation with foreign policy, he introduced a new argument designed to blunt the criticism.

“Anyone who says we should retreat into an isolationistic cocoon is living in the last century,” Bush said during his speech in Houston.

“We live in an integrated world,” he said. “And, in that world, you can’t neatly divide foreign from domestic policy.” He asked: “When I talk with foreign leaders about how Desert Storm reignited Americans’ faith in themselves, was that just foreign policy?”

It was a mark of Bush’s discomfort, however, that he acknowledged in one interview Friday that he sometimes had second thoughts about his extensive foreign travel. “Someone in Dallas, his firm having to lay off--I can’t ask him to think of my being in Madrid as good,” he said.

But he said his responsibility for “the national security and for world peace” meant that he was “not going to change my schedule.”

Bush indicated also that he shared the public support for term limitations on public officials. And Vice President Dan Quayle made clear in his own remarks at the Houston event that the Bush-Quayle combination would likely seek to exploit that sentiment.

“If Ronald Reagan was limited to two terms,” Quayle said, “and you, Mr. President, are limited to two terms, then surely, for the good of the country, the Senate careers of Howard Metzenbaum and Ted Kennedy should be limited to two terms.”

UNEMPLOYMENT BENEFITS: Legislation to extend jobless benefits ran into a bipartisan backlash. A16