Brady Named to Replace Baker at Treasury

President Reagan announced the resignation Friday of Treasury Secretary James A. Baker, who will lead the Bush presidential campaign, and nominated Nicholas Brady, a Wall Street banker and former New Jersey senator, as Baker’s replacement.

Reagan, appearing in the White House briefing room after the close of the financial markets, made the announcement that had been expected for months.

“As Jim Baker would say, it’s finally a done deal,” Reagan said in announcing his longtime friend’s resignation to become chairman of Vice President George Bush’s presidential campaign. “I say so long but not goodby to a friend today.

“You’re a friend whom I will miss. You’ve been a secret to our success. Now, Jim, go do it for George.”

Baker said his resignation would take effect as soon as Bush formally receives the Republican presidential nomination during the GOP National Convention, to take place Aug. 15-18 in New Orleans.

Immediately after the announcement, Bush and Baker left the White House for Bush campaign headquarters.

The vice president denied that Baker’s help is needed to rescue his effort against Democrat Michael S. Dukakis, but nonetheless said Baker, who headed his unsuccessful 1980 White House drive, is joining his team “just at the right moment.”

“We’re less than 100 days away from choosing a President of the United States and when that convention nominates me, I become more the candidate, more the standard-bearer of this party and less the vice president of the United States,” Bush said. “Once getting that nomination, my job is to run and run hard--all-out for the presidency.”

“I’m going to do my dead-level best to achieve that goal we’ve both shared for a long time,” Baker said.

“I am a realist of the difficulty of the task that faces us,” Baker said, adding nonetheless that he did not think there was anything “fundamentally wrong” with the campaign and he was “upbeat and optimistic.”

‘Vital to This Nation’

“It is vital to this nation that you win this election,” Baker said. “We simply cannot afford to put at risk the peace and the prosperity that we enjoy today.”

During the White House announcement, Reagan, with Baker and Brady at his side, praised his departing Treasury secretary at length before turning briefly to the qualifications of Brady, who he said has answered his call for help five times and who he promised would be the “chief economic spokesman” in the remaining six months left to the Administration.

“I cannot imagine anyone more qualified to step in as Treasury secretary,” Reagan said at the brief proceeding. “Others talk; we deliver. Jim and Nick are doers who share my vision of what can be.”

Baker, heralded by Reagan for his work for tax reform, Social Security reform, a free trade agreement with Canada and other accomplishments, said simply that he could see no better way to continue the Reagan recovery than by helping Bush’s campaign.

‘Profoundly Grateful’

“You gave me an opportunity to serve for which I will always be profoundly grateful,” Baker said. “And it does seem to me that in seeking to advance your vice president’s candidacy, I can best help ensure the survival of your legacy.”

Brady, who headed the presidential panel on the October stock market crash and is co-chairman of Dillon, Read & Co. of New York, is a close friend of Bush and could remain in the top Treasury post if Bush is elected President.

“I’m honored by your confidence and am proud, subject to confirmation by the Senate, to serve in your Cabinet,” Brady said after being introduced by Reagan. “Your Administration has brought to this country the longest sustained period of prosperity in recent years.

Baker’s long-rumored resignation came as no surprise to Washington or Wall Street, but the Cabinet official had played his cards close to the vest.

Strong Influence

Most financial analysts said the closeness of Brady and Baker, both personally and philosophically, would ease the change and reassure investors and world finance ministers and that Baker would likely retain strong influence over economic policy.

“I can’t see any policy initiative taken in the next few months without it being run past Baker,” said Lawrence Chimerine, chief economist for the WEFA Group of economic forecasters in Bala-Cynwyd, Pa.

“Baker will still be calling the shots,” agreed Allen Sinai, chief economist for The Boston Co. “Baker has been a behind-the-scenes actor since 1980, when he was White House chief of staff.”

The shift comes eight years after Baker switched over to Reagan’s campaign when Bush was selected for the No. 2 spot on the 1980 ticket that beat Democrat Jimmy Carter.

Served in White House

Baker went on to serve as White House chief of staff in Reagan’s first term, switching jobs for the second term with Treasury Secretary Donald T. Regan.

Brady led a presidential commission that investigated the “Black Monday” stock market crash of Oct. 19 and recommended tighter regulation of securities markets. Reagan did not go along with the advice and appointed a second panel that made conclusions more to his liking.

Despite that development, Brady is a known quantity to the White House, and as a former senator from New Jersey he could be counted upon to win quick Senate approval for the Cabinet.

While awaiting confirmation, Deputy Treasury Secretary Peter McPherson will become temporary steward of the department.

Two Bush allies already have left the department to join their candidate’s campaign. Robert Zoellick has signed on as issues director for the vice president and Richard Darman will serve as a policy adviser.

Margaret Tutwiler, a Baker spokeswoman as assistant Treasury secretary for public affairs, also announced Friday that she is leaving the Treasury Department and moving over to the Bush campaign with her boss.