Learned From TV That He Was Being Ousted, Regan Says

“It only hurts when you think about it,” Donald T. Regan told a Los Angeles audience Thursday during a brief, sardonic reminiscence of the moment less than two months ago when he learned he was being replaced as White House chief of staff.

Making his second public appearance since he left the White House, Regan sounded characteristically blunt and bullish as he talked about politics and the economy and emphasized his belief that President Reagan was not aware of any illegal activity related to the Iran- contra affair.

Dose of Jail Time Recommended

As he talked about the economy, Regan, who was a top Wall Street executive for many years, said he thinks the best answer to the current rash of insider trading violations is a dose of jail time for the guilty parties.

“I must hasten to add that I condemn these recent practices on Wall Street,” he said. “My antidote for that, incidentally, is a little Draconian. But it goes along with my whole temperament. . . . If those people actually went to jail for two or three years, it would be the greatest antidote and it would stop others from the same practice.”

Regan spoke at a downtown hotel to an audience composed largely of businessmen. A spokeswoman for Loyola Marymount University, the sponsor of the appearance, said Regan was paid $20,000. He reportedly received the same amount the day before in Denver for giving the same speech.

Regan offered no new revelations on the still unraveling scandal that led to his abrupt departure from government. But he did provide some details of the circumstances under which he left the White House.

Reagan, when he announced that former Sen. Howard Baker would be the new chief of staff, said Regan had told him a week earlier that he would like to return to private life.

Regan, however, gave the impression Thursday that he first learned he was being replaced when Baker’s appointment was reported on a television newscast.

He said he was in his office when National Security Adviser Frank Carlucci walked in and said, according to Regan: “Don, I just saw on television that Howard Baker has just been named the new chief of staff. What the hell is that all about?”

Regan said he turned on the television “and there it was. So I dashed off a fairly terse resignation, picked up my briefcase, stuffed it full of a few personal papers and left. That was it.”

‘Some Reasonable Steps’

On the economy, Regan said “there will be another recession” but not for a while. “I believe this recovery has a lot further to go if we take some reasonable steps.”

Responsibility for those steps, he said, will fall heavily on his old nemesis, Congress, and its willingness to control spending.

“Irresponsible action by the Congress in either the budget or trade areas could be economically devastating.”

Not one for second thoughts about his own rocky relations with members of Congress, Regan added that if Congress had less power over the budget, the President would be able to run the country more efficiently.

He made the remarks in answer to the question: “Has the job of the presidency become too big for one person?”

“No,” replied Regan, not if certain governmental reforms are made that would lighten the President’s burden and make government, in general, more efficient.

One reform he recommended was limiting Congress’ power over the budget to what the British Parliament has.

‘Up-or-Down Vote’

“In Parliament, when the budget is written, the chief finance minister takes (it) in and it’s there for perhaps a period of a month. And there are hearings on it for one month only. And then it’s an up-or-down vote.

“It’s not like Congress where they pull it all apart. And various members can shove in their pet projects here or they can here or add or subtract there. The prime minister has the right to set that budget up. And in one month it’s up or down. And it’s always exciting because if it’s down, then the party in power falls and there is a new election. So they pass that budget, and they go on to other things.”

But in the United States, he said, “this President has to spend an enormous amount of time on a budget that is never passed.”