PINEHURST, N.C., DEC. 10 -- Incoming Republican National Committee chairman William J. Bennett and Housing and Urban Development Secretary Jack Kemp exhorted Republican governors today to help the party seize the nation's domestic agenda by focusing on what it can do to aid the impoverished.

Endorsing a package of domestic initiatives that a group of conservatives have dubbed the "New Paradigm," Bennett and Kemp argued that the economy can be rescued from its downturn and the nation from its social ills by giving individuals greater choice in education, housing and business development.

In his first speech since being designated new chairman of the RNC, Bennett cited affirmative action policies as an example of government intervention that limits choice, but to reporters afterward he said there are some instances in which affirmative action policies can be used to achieve "diversity."

Last week in Washington, Bennett said a controversial television ad used by Sen. Jesse Helms (R-N.C.) during the closing days of his campaign against Democrat Harvey Gantt, who is black, was "perfectly legitimate" and that many Americans are rightly concerned about the use of hiring quotas.

The ad showed a pair of white hands tearing up a rejection slip for a job the announcer said went to another worker "just because he was a minority."

Coming on the heels of President Bush's veto of civil rights legislation, Bennett's remarks were taken as a signal the GOP planned to use opposition to hiring quotas as a wedge to define its differences with Democrats.

But Bennett said today there is no such plan and that he has little idea whether such an approach would work. His remarks, he said, were "overinterpreted."

RNC spokesman Charles Black said Bennett's comments were not meant as a restatement of GOP policy on affirmative action. "If you make a hard and fast rule, you'd be changing a whole lot of things the government does now," Black said. "That's not the president's intention."

Bennett said he does not favor granting preference based on race but supports the "original notion" of affirmative action, which he defined as encouraging, rather than mandating, change.

Basing decisions on race, he said, "was wrong when it was done under the aegis of slavery. It is wrong when it is done now. Two wrongs don't make a right."

But colleges that wish to specifically recruit minorities, he said, ought to be able to do so.

"If a college wants to say, we have an affirmative action program and we want to increase our numbers of black students because we don't have any, I'm not going to raise a fuss about that, provided that a white student who has the B average gets an opportunity to get a place in college too," he said.

Kemp denied that the ideas associated with the New Paradigm, with their emphasis on tax cuts and self-help, could be considered a slap at Bush administration policies, although House Minority Whip Newt Gingrich (R-Ga.), a main proponent of the ideas, has been openly critical of Bush domestic policy.

In a speech here today, Vice President Quayle alluded to the "at times, contentious" divisions evident within the GOP.

"There is nothing wrong with a battle of ideas," Quayle said. "But once the president decides, it will not be Republicans versus Republicans, but Republicans versus Democrats."

Kemp emphasized the need for a capital gains tax cut as a component of New Paradigm thinking that he said would stimulate the economy and aid the disadvantaged.

Noting that many states have said they feel burdened or ignored by Washington, Kemp appealed to the governors to lobby on behalf of the tax cut.

"There is a free lunch to governors," he said, promoting his favorite theory that economic growth will aid all income groups. "It is that if we get this economy growing again at the federal level, remarkable impact will be felt at the state level, because we'll be taxing the economy at a broader base even though the rates are lower."

The dozen GOP governors, three governors-elect and one gubernatorial candidate at the conference gave the ideas a polite reception but seemed somewhat disconnected from the internal party debate that has so captured Washington.

"I didn't go to a college where I learned that phrase," New Hampshire Gov. Judd Gregg (R) said of the New Paradigm. "I'm trying to understand what it means."

"The purpose of my speech is to provoke a discussion, to provoke an argument," Kemp said afterward. Bennett, standing nearby, responded: "Yeah, just what we need. Another argument."