Brady to Stay at Treasury--2nd Post Filled by Bush : Need to Act ‘Soon’ on Deficit Cited

President-elect George Bush today named Treasury Secretary Nicholas F. Brady, a longtime friend, to remain in his current post in the new Administration.

Bush said his appointee for the Treasury understands the need to keep inflation low and “knows that we must resist the policies that will impede that effort such as raising taxes or resorting to protection.”

Added the President-elect: “He knows we’ve got to sit down with the Congress on a deficit reduction agreement and we’ve got to do it soon.”

Bush, fresh from a long weekend of relaxation in the Florida sunshine, appeared with Brady outside the vice president’s official residence at the Naval Observatory.

For his part, Brady said he would “do my best to help the President-elect, serve the people and to build on this, the longest recovery in the history of the country.” Brady said he had no comment on the dollar, which has fallen in recent days.

Bush said he would make no other appointments during the day. He said he felt no pressure to name a new chief of staff but added that he may do so “fairly soon.”

Dinner With Sununu

The President-elect dined alone Monday night with New Hampshire Gov. John H. Sununu, believed a leading candidate for the top staff job in the new White House. Sununu walked off Air Force Two just behind the Bushes when they arrived in Washington earlier in the day.

Brady’s appointment--the second of 14 Bush must make to his Cabinet before Jan. 20--marked the second time that Bush has turned to a longtime confidant to fill a key post in his Administration. Secretary of State-designate James A. Baker III was Bush’s first Cabinet appointment, announced the morning after his election last week.

Brady, the 68th Treasury secretary, succeeded Baker, who quit the Cabinet in August to head Bush’s campaign. In September, he was confirmed by the Senate 92-2 after winning unanimous backing from the Finance Committee. The Bush nomination of Brady will require Senate confirmation.

The Treasury secretary is considered a pragmatist whose close ties with Baker indicate that the incoming Administration intends a tight correlation between foreign policy and international monetary issues.

Bush described Brady, a former chairman of the investment banking house of Dillon, Read & Co., as a man who “brings to his office an extraordinary knowledge of financial markets, experience in the private sector” and said he is “very well respected both here and abroad.”

Bush announced the appointment of Brady after meeting privately with visiting West German Chancellor Helmut Kohl.

Uncertain Atmosphere

Brady, 58, served briefly as an appointed member of the Senate from New Jersey. He is a longtime friend of the President-elect and was a key member of a circle of advisers whom Bush leaned on during his successful presidential campaign.

Bush made the appointment in an uncertain international economic atmosphere. The value of the dollar fell sharply last week, dragging down stock prices as well because of investor fears over Bush’s economic policies.

To calm jitters, Bush and Brady both acted in recent days to reassure investors that the new Administration had no secret plan to drive down the value of the dollar.

Brady has been a cautious caretaker Treasury secretary in the waning days of the Reagan era, avoiding economic pitfalls that might have hurt Bush’s presidential bid but giving few clues to his own policy priorities.

Last month he helped to arrange a $3.5-billion bridge loan for Mexico to help America’s southern neighbor get over a debilitating slump in oil revenues.