In the middle of one particularly low point in the presidential transition period, when there were far more questions than answers, a straight-faced James S. Brady announced that the Internal Revenue Service had come up with a new ruling: "Lunches with me as a source are no longer deductible."

The remark was a revealing one for Brady, named yesterday as Ronald Reagan's White House press secretary. First, it was a tacit confession that he wasn't part of the transition team's inner circle and didn't know much about the hottest topic in town at the moment -- the selection of Reagan's Cabinet.

Second, it showed Brady's irrepressible, wry sense of humor and his ability to use it to advantage.

That Brady was finally named White House press secretary came as a surprise to many of his closest friends. Few people have ever had a job dangled in front of them so long, or so seemingly far out of reach.

He is, they say, bright, articulate and seasoned, a master of the art of press agentry. He has worked for three Cabinet officers, two senators and two presidential candidates, and is unusually well-informed on a host of policy questions.

But Brady, 40, has never been a Reagan insider. He started the campaign as John B. Connally's press secretary. When he was brought into the Reagan camp during the late Republican primaries, his role was ill-defined.He carried the title director of public affairs and research, but it was never clear exactly what that meant.

Lyn Nofziger, an old intimate of Reagan, was already press secretary. Brady was simply told to join the Reagan traveling entourage without portfolio. He felt frustrated, ill at ease. "Here you've been commander of a destroyer, then all of a sudden you're a laundry boy," he said at one point.

Brady, well-liked by reporters, developed a good working relationship with the disheveled, beer-bellied constantly wisecracking Nofziger. "Finally, I felt we could call audibles at the line of scrimmage," said Brady, an ex-high school football player from Centralia, Ill. stBut Brady, unfairly in the opinion of many, was blamed by the Reagan high command for leaking information to reporters during the fall campaign, and fell out of favor. Once he shouted "killer trees, killer trees" when the Reagan campaign plane flew over a forest fire in Louisiana. The irreverent joke -- a reference to Reagan's much-criticized comment that trees are a major source of impure air -- drew the ire of Reagan's top advisers.

After the election, Brady became the chief press spokesman at Reagan's transition office. But the transition team went on a lengthy and well publicized search for a White House press secretary.

A number of reporters were sounded out about the possibility of taking the job, and Reagan's top advisers toyed publicly with the idea of restructuring the press secretary job and having four official spokesmen, instead of one. Brady continued to be mentioned as a candidate for the job, but never a favorite.

Meanwhile, he had the often thankless task of handling hundred of transition inquiries from reporters, although he had limited access to decision-makers. He handled the job with skill and good humor. Asked at one point why the transition bureaucracy had gotten so large, he replied, "It's the same reason a minister goes to Las Vegas. If you want to fight sin, you have to know it first."

Round-faced and pudgy with thinning hair, Brady called himself "the bear." After he presided over the announcement of Reagan's first four Cabinet members, he quipped, "I bet that's the first time in history a bear ever announced a Cabinet."

A graduate of the University of Illinois, Brady taught government while working on a PhD for two years at the Southern Illinois University. He first came to work in Washington as a junior aide to the late senator Everett Dirksen in 1961. He returned in 1973 and served in succession as an aide to James T. Lynn when Lynn was secretary of housing and urban development and director of the Office of Management and Budget, and to Donald Rumsfeld when Rumsfeld was secretary of defense. Before joining the Connally campaign, Brady was an executive assistant to Sen. William V. Roth Jr. (R-Del.).