Stockman Quits as Budget Chief to Join Wall St. Firm : President Hails His Dedication

David Stockman, the often-controversial Administration whiz kid who has served as architect of President Reagan’s budget policies, announced today that he is resigning Aug. 1 to take a position on Wall Street.

Stockman, 38, a two-term Republican congressman before being tapped to spearhead Reagan’s attack on federal spending, said he will take his long-expected leave from government to join Salomon Brothers, an investment banking firm.

“Dave Stockman has served with dedication and distinction,” Reagan said in a statement. “His tireless efforts to bring fiscal discipline to the federal government and ensure economic stability for the country are deeply appreciated.”

White House spokesman Larry Speakes, who announced the resignation, told reporters that Stockman informed Reagan of his plans at midday. Reagan expressed his “deep appreciation” and “personal gratitude” for the time and effort Stockman has devoted over the last 53 months, Speakes said.

‘Highest Admiration’

“The President has nothing but the highest admiration for Dave Stockman,” Speakes said, “and I think that goes for the entire Administration.”

Stockman has been director of the budget office since President Reagan assumed office in January, 1981.

Before that, he was a Republican member of the House of Representatives from Michigan.

Stockman, known for his outspokenness, came to symbolize the Reagan Administration’s quest to scale back the size of the federal government.

His blunt assessments of the government’s fiscal situation often ruffled feelings on Capitol Hill and within the Administration. But his mastery of the complexities of the budget outweighed the temporary anger over his remarks.

Touched Off Uproars

Earlier this year, Stockman touched off an uproar with his assertion during a congressional hearing that military pensions are too fat and that many of the nation’s farmers have brought economic troubles upon themselves.

His own mother, a Michigan farmer, criticized him in a radio interview after he made the remarks about farmers and Reagan chided him for his criticism of military pensions.

Reagan dismissed the remarks by saying, “I can understand a fellow blowing his cool.”

But the biggest flap occurred early in Reagan’s first term, when Stockman told an interviewer that the President’s “supply-side” economic formula was nothing more than the old Republican “trickle-down” philosophy of dealing with the economy.

Stockman also said he had doubts about its main component, a major tax cut.

“I’ve never believed that just cutting taxes alone will cause output and employment to expand,” Stockman said.

Summoned to ‘Woodshed’

Reagan personally called the budget director to task, a meeting that Stockman said was a summons to the White House “woodshed.”

In his latest dust-up with the Administration, Stockman told business leaders that “as a policy matter, it is obvious enough that to close this threatening $200-billion budget gap we must either massively cut spending or raise taxes by large, unprecedented magnitudes--or by the lights of some, enact a sweeping mixture of both.”

Reagan, adamant about not raising taxes, was irate when Stockman’s remarks were published, saying that the comments had been taken out of context. “We know what he said and the story is fallacious,” he said.

“This has been a definite and deliberate misquote.”