The surprising job swap by Treasury Secretary Donald T. Regan and White House chief of staff James A. Baker III will create a power vacuum in the White House on the eve of President Reagan's second inauguration, politicians of both parties agreed yesterday.
Conservatives hailed the departure of Baker, whom they regarded as the main source of resistance inside the White House to their agenda. But they reacted cautiously on Regan, who came to the administration from Wall Street and became a belated convert to the new supply-side economic theories.
Congressional Democrats publicly praised the shift and privately expressed relief that Baker, considered the administration's keenest political operator, will no longer have day-to-day control of White House decision-making.
They predicted that Regan will be less successful in pushing the president's program through Congress and promoting Republicans' political interests nationally.
Baker's departure also raised conservatives' hopes that Reagan would offer a White House post to one of their favorites, U.N. Ambassador Jeane J. Kirkpatrick, who has announced her intention to leave her present post. But key administration officials said they see obstacles to such a move.
The changeover will leave Baker in charge of administration economic policy, and members of both parties said this not only could lead to a speedier compromise on budget and tax policy but likely would strengthen the hand of Senate Majority Leader Robert J. Dole (R-Kan.). Last week, Dole said Senate Republicans will write a budget before the president sends his to Congress.
The shift of Regan, architect of the Treasury Department's tax-simplification proposal, increases the likelihood that the president will make revising the tax code a major item on his legislative agenda this year. Rep. Jack Kemp (R-N.Y.) said Baker told him on Monday that he, too, favors "major reform" of the tax system and promised to push the issue this year.
"In terms of tax reform, it's a slam dunk, an almost unbeatable combination," Deputy Treasury Secretary R.T. McNamar said.
Baker's move represents a clean sweep of Reagan's first-term White House team, which also included deputy chief of staff Michael K. Deaver, counselor Edwin Meese III and Secretary of the Interior William P. Clark.
Meese has been renominated as attorney general. Clark, who served earlier as national security affairs adviser, is quitting government to return to California. And Deaver, considered the person closest to Reagan and his wife, Nancy, said last week that he will leave this spring for a job in private industry.
"His first team is dispersed, and he doesn't have an agenda," a top Democratic aide on Captiol Hill said of the president.
Reagan's announcement that he had agreed to the swap engineered by Baker and Regan surprised people, who reacted with praise and puzzlement.
House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) called Baker and Regan "very able and talented public servants who always do a job well.
"I am looking forward to working just as constructively with them in their new positions as I have in their previous assignments. The country has been well served by their past efforts, and I expect that the country will be just as well served by their efforts in their new jobs," he said in a statement.
Dole praised Baker and Regan as "pragmatic men who understand the need to reduce deficits" and can be expected to work well with Congress.
"It's something I wouldn't have thought of, but it turns out it's a good switch. Two good men will remain in government . . . . I believe Don Regan will be a voice of reality and reason as Jim Baker has been," he said.
"I don't see any losers in this," Dole added. "The president gets a strong hand in the White House. He gets a trusted hand and a strong hand at Treasury. Don Regan apparently wanted to do it. Jim Baker is tickled to death."
Asked whether Regan has the political sensitivity to work with Congress, Dole said he does but added: "Probably the one area he has a lot of catching up to do is . . . the politics of the executive branch and the Congress."
Some Democrats voiced stronger private misgivings about Regan's political experience and skills. "Regan may have stuck his foot in his mouth more than anyone else in this administration over the last four years," said an aide to a key Democratic senator.
House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) praised both men as "sound on substance and able politicians . . . veterans of legislative combat."
House Banking, Finance and Urban Affairs Committee Chairman Fernard J. St Germain (D-R.I.) dismissed the swap as "a simple shifting of players but no change in the game plan."
"Donald Regan faithfully implemented whatever Reagan administration policy was in vogue at whatever moment," he said. "I assume Jim Baker will be more of the same."
Kemp, a leading proponent of tax simplification, called the change "positive" and predicted that it would "accelerate" the drive for revising the tax code. "This could very well give us a fresh look at some aspects of policy," he added.
Rep. Newt Gingrich (R-Ga.), a leader of young congressional conservatives, said the shift is "healthy" for the administration and predicted that Regan will be "about like Judge Clark, committed to implementing Ronald Reagan's wishes."
"I'm fairly enthusiastic," he said.
"The New Right crowd is going to like this because Don Regan is not Jim Baker," one Republican political operative said. "In about a month, they'll rethink that."
Other conservatives hinted at mixed feelings.
"How Don Regan will fare in that position is really open to question," said Paul Weyrich, head of the Committee for the Survival of a Free Congress. "I don't know of anybody who's close to him . . . . I was frustrated with the existing order. The old order needed to change. But that doesn't mean it has changed for the better."
Richard A. Viguerie, publisher of Conservative Digest and one of Baker's harshest critics, said conservatives "applaud Baker's leaving the White House," but he noted that Regan was "not on any conservative short list for chief of staff." He predicted that "if Ronald Reagan says, 'Do A,' then Regan will do A."
"He's a true believer in Ronald Reagan's economic program," said Edward Feulner Jr. of the Heritage Foundation in predicting that Regan "will be able to control some of the baronies and fiefdoms that have developed" under Baker.
Democrats said that, while they expect Baker quickly to dominate administration relations with Congress on the economy, the president will sorely miss the political and public relations skills provided by Baker and Deaver.
There was widespread agreement that until the many White House vacancies are filled the real impact of the Baker-Regan shift will not be clear.
"Until you can determine the next set of players, you can't determine the effect on policy," a Republican said. "It's going to take quite a while for it all to shake down."