Bush Keeps Brady in Job at Treasury : Sununu Reported as Front-Runner for Chief of Staff

President-elect George Bush Tuesday made a second easy Cabinet choice, reappointing his old friend Nicholas F. Brady as secretary of the Treasury--while indications mounted that he would name New Hampshire Gov. John H. Sununu as his White House chief of staff after a sharp backstairs competition for the job.

The chief of staff post is critical for Bush in setting the tone of the White House he will run next year. It has been the subject of anxious competition between Washington outsider Sununu, known for his political skills, and Bush’s current chief deputy, Washington insider Craig Fuller, a proficient administrator.

Freshened after a four-day Florida beach vacation, Bush returned to Washington to call on Brady, a friend of 14 years, to remain at the Treasury and serve as “the chief economic spokesman for my Administration.” Bush’s first Cabinet appointment was James A. Baker III, chairman of the President-elect’s campaign and himself a former Treasury secretary, to be secretary of state.

But speaking with reporters on the lawn of his residence, the President-elect withheld official announcement on his chief of staff, the more hotly debated decision facing him.

Sources close to the selection process said that Bush had moved toward Sununu, whose command decisions in the New Hampshire primary kept Bush’s presidential hopes alive when his candidacy was foundering.

“I heard that’s going to be it,” said one source, noting he was all but certain the decision was now firm.

This source noted that Sununu alone among top deputies had traveled to Florida and joined Bush for dinner during the President-elect’s vacation. “He didn’t go down there just for the ride,” the source said.

Scowcroft Also Mentioned

The same source, a Republican close to the Bush campaign, also said that retired Lt. Gen. Brent Scowcroft now is “in pretty good shape” to be the new President’s national security adviser, a post he held in the Gerald R. Ford Administration.

A choice by Bush of Sununu would place a confidant known for his political skills, though not his knowledge of the capital, next to the Oval Office.

Sheila Tate, transition press secretary, said that she has heard a flood of reports that Sununu will get the job. She said she had talked to Fuller and campaign pollster Robert Teeter--the two men who are running Bush’s transition. “The vice president has not indicated to any of us that he has made a decision,” she said.

Sununu is a glib and personable state chief executive who told the vice president in the bleak days of last winter that the way to salvage his presidential campaign was to drop the trappings of high office and plunge into a one-on-one style of politicking. Many, including Bush himself, credited this decision with his come-from-behind victory in the New Hampshire primary.

Virtually no one in Washington was surprised at the decision to reappoint Brady, which was preordained last summer when President Reagan asked the Wall Street investment banker to become secretary of the Treasury and smooth the way for a transition, should Bush win the election.

Bush announced the Brady appointment after he and Vice President-elect Dan Quayle met with German Chancellor Helmut Kohl, the first of a string of sessions Bush has scheduled with foreign leaders. He will meet today with British Prime Minister Margaret Thatcher.

In making the Treasury announcement, Bush said that his long-time friend Brady, having served eight months as a U.S. senator from New Jersey, also “brings with him the valuable ability to work effectively with Congress as we work out and develop a budget deficit reduction plan.”

‘No Time Pressure’

On the chief of staff appointment, Bush told an afternoon gathering of reporters: “I feel no time pressure on that.” But Bush added, apparently recognizing that his chief White House aide will heavily influence the workings of his office, said that he hopes to resolve the matter “fairly soon.”

One popular round of speculation this weekend held that Bush was holding back his announcement of his White House senior staff while he explored the possibility of splitting responsibilities among Sununu, Fuller and perhaps Teeter. But a source said that Bush was “put off” by that idea, as were the individuals involved.

“It is clear Bush felt strongly he ought to have a No. 1, who was indeed the chief of staff,” said this source.

On his arrival in Washington, Sununu was asked if he had been offered the job to oversee the White House staff and replied only: “I’ll do whatever he needs.”

Fuller, for his part, has been quoted as saying that there is considerable “jockeying” going on. And a source close to him confirmed “antagonism” between Fuller and Sununu.

“You keep reading stories suggesting that you are arguing, and eventually you are,” this source said.

Meanwhile, the capital also was alive with rumors about potential appointees. For instance, U.S. Ambassador to Korea James R. Lilley, an old friend and CIA station chief in Beijing when Bush headed the U.S. Mission to China, was said to be in Washington, lobbying to be the director of central intelligence. Lilley has been mentioned as the likely next ambassador to China.

Republican congressional sources said that individuals representing Japanese interests have undertaken lobbying for former Tennessee Gov. Lamar Alexander or Undersecretary of State Michael H. Armacost to be named the next ambassador to Japan. However, also believed to be in contention are two Washington powerhouses, Secretary of State George P. Shultz and former Defense Secretary Caspar W. Weinberger.

Staff writers Cathleen Decker, William J. Eaton, Douglas Jehl, David Lauter, Jim Mann and Doyle McManus contributed to this story.