FTC’s Miller Is Expected to Take Stockman’s Place

President Reagan is expected to replace Budget Director David A. Stockman, who announced his resignation last week, with Federal Trade Commission Chairman James C. Miller III, Administration sources said Thursday.

Miller, an economist, would succeed Stockman at a time when the federal government is threatened by annual deficits of more than $200 billion, deficits that are proving more intractable than ever.

The White House, however, denied that any decision had been made on a new budget director, a job that requires Senate confirmation.

“No one has been offered the job,” spokesman Larry Speakes said, adding that White House Chief of Staff Donald T. Regan is still interviewing candidates. “The President has not made a decision, nor have there been any recommendations to him.”

But several officials, speaking on condition that they not be identified, said Miller has already been told he will be selected.

The often-controversial Stockman, budget director since the beginning of Reagan’s Administration in 1981, is resigning on Aug. 1 to join Salomon Bros., a leading New York investment banking firm.

Regan has been looking for a new budget director who would remain in the background in the development of Administration economic policy, White House officials said. Stockman dominated economic policy during the early months of Reagan’s first term and remained a powerful public advocate of spending cuts and a private supporter of tax increases as a necessary measure to narrow the budget gap.

Stockman, who plans to write a book about his experiences in government, became increasingly despondent over the chances of achieving major changes in domestic spending programs, aides said. He believes that the breakdown of budget negotiations in Congress this year, despite Reagan’s landslide election victory only last November, will leave the Administration with little chance of pursuing further spending reductions for the rest of Reagan’s term.

But Stockman’s successor still would be in a powerful position to influence the entire government. The relatively small Office of Management and Budget not only controls the purse strings of nearly all government agencies but oversees their regulatory activities.

Deregulatory Policies

Miller, 43, joined the Reagan Administration early in 1981 as head of OMB’s regulatory affairs office, where he pushed free-market, deregulatory policies.

At the FTC since October, 1981, Miller reversed the activist approach of Michael Pertschuk, who was made chairman by former President Jimmy Carter. But Miller also defended the independent FTC against congressional efforts to strip it of its authority to supervise such professionals as doctors and lawyers.

Miller, who was highly critical of the FTC’s role as a consumer-oriented regulator, insisted that both businesses and consumers would be better served by less government intervention and more emphasis on improving the working of free markets. Shortly after moving there, he criticized the commission for a “pervasive attitude” favoring “social engineering” that led it into “an excessively adversarial relationship with those it regulates.”

Like Stockman, Miller believes in cutting the role of the federal government in domestic affairs, even advocating that private firms be allowed to compete with the Postal Service in delivering letter mail.

Resident Scholar

Before joining the FTC, Miller was a resident scholar and director of regulatory studies at the American Enterprise Institute, a conservative think tank in Washington.

Throughout his tenure as commission chairman, he has been relatively open to the press, holding regular meetings with reporters to discuss FTC matters. But he is expected to take a lower profile in the budget job.

Miller was unavailable for comment Thursday.

Other candidates who have been mentioned for the budget post include John A. Svahn, White House assistant for policy development; Deputy OMB Director Joseph Wright Jr.; former Transportation Secretary Drew Lewis, and Commerce Secretary Malcolm Baldrige. But Wright, Lewis and Baldrige have said they are not interested.