Regan Quits as Staff Chief; Ex-Sen. Baker Takes Post : Resigns Day After Tower Panel Blast

White House Chief of Staff Donald T. Regan, the Wall Street power broker who tried but failed to make himself indispensable to President Reagan, resigned today and was replaced by former Republican Senate leader Howard H. Baker Jr.

The White House announced the long-expected departure of Regan and his replacement one day after the Tower Commission investigating the Iran arms affair blamed the chief of staff for “the chaos that descended upon the White House” in the aftermath of bungled arms-for-hostages deal.

Baker, 61, had been contemplating a presidential candidacy and broke off a trip to Florida to return to Washington.

First lady Nancy Reagan and key political associates had been in the vanguard of trying to drive out Regan, who had dominated the White House scene for the past two years.

Republican political figures had criticized Regan, 68, as arrogant, intolerant of dissent and lacking in political experience.

‘Instant Credibility’

One source said Baker was chosen to help rebuild the Administration’s public standing in the wake of the Iran- contra scandal because Baker has “instant credibility” with Congress and with the public.

Baker was first elected to the Senate in 1966. He was elected minority leader in 1977 and was chosen majority leader when Republicans took over control of the Senate in 1981.

Baker sought the Republican presidential nomination in 1980, when Reagan won it, but dropped out after the early primary contests.

He retired from the Senate in 1984, saying he would be more free as a private citizen to devote the time to another try for the White House in 1988. He has recently made moves toward such a candidacy, but has made no announcement.

Baker first gained national attention as a member of the Senate committee that investigated the Watergate scandals that drove President Nixon from office.

Persistent Question

His question, which he reiterated over and over, was: “What did the President know, and when did he know it?”

“Howard Baker is the right man at the right time at this critical period for the White House,” Senate Republican leader Bob Dole said in a written statement from Capitol Hill, where Regan has been under heavy criticism.

“Howard Baker’s experience, credibility, and respect will serve the President, and the country, well,” Dole said.

Earlier today, the White House said President Reagan was “rightfully angry” about foreign policy mismanagement in the Iran- contra affair and “intended to make changes as soon as possible” to counter “a perception that he is not in charge.”

Presidential spokesman Marlin Fitzwater, delivering the Reagan Administration’s first substantive reaction to the Tower Commission’s criticism of White House decision-making, said that over the next several days Reagan will analyze the Tower panel’s report and confer with a wide range of advisers. (Stories on report, Page 10.)

“The President is rightfully angry about the mismanagement described in this report and he intends to take action as soon as possible. . . . I would say he is determined and eager to set the Administration back on course,” Fitzwater said.

Republican congressional leaders who met with Reagan for 45 minutes this morning said much the same thing.

Sen. Alan K. Simpson (R-Wyo.) said he detected a “sense of acceptance and reality and pragmatism” in Reagan, without any desire to shift blame to a scapegoat.