For Treasury Secretary Donald T. Regan, the move to the White House to become President Reagan's chief of staff, is a kind of battlefield promotion.
No member of the administration defended the president's economic policies harder than Regan over the past four years, and no one picked up more scars and bruises.
The quintessential team player, he readily took on Federal Reserve Board Chairman Paul A. Volcker; Martin Feldstein, then-chairman of the president's Council of Economic Advisers, and much of Wall Street and the economics profession when he thought that would serve the president's interests.
"He's very, very loyal. That brought him some criticism, but it certainly is an attribute the president admires," said John E. Chapoton, former assistant treasury secretary for tax policy.
Regan's exchange of assignments with White House chief of staff James A. Baker III will put him in a new role, different in nature from either the Treasury Department post or his former job as chairman of Merrill Lynch & Co. Inc., and surprised treasury assistants and congressional aides wondered yesterday how well he will do.
"It's one thing to be a team player in public. He was also a team player in private. He didn't want to tell the president what the president didn't want to hear," said one administration insider.
Other questions about Regan's future effectiveness center on his sometimes abrasive style, which still bears traces of his days as a no-nonsense, do-it-my-way corporate chief executive officer.
"When I was CEO and I said 'Jump,' people said, 'How high,' " Regan told reporters yesterday. "As secretary of the treasury, when I said 'Jump,' people would say. . . 'What do you mean by jump? How do you describe high?' "
"I've learned to live with it . . . ," Regan said, and some in Congress, such as Senate Banking Committe Chairman Jake Garn (R-Utah), predicted he will succeed politically in the staff position.
Aides said the same. "Regan will be effective on the inside. He's a superlative chief executive," Deputy Treasury Secretary R.T. McNamar said.
His strengths, Chapoton said, are his organizational ability and drive, and a frame of mind close to the president's.
"As an economic prognosticator, I guess in retrospect, he wouldn't get the highest marks, but I don't think that singles him out," Chapoton added.
"He has clearly been on the optimistic side," said Chapoton, referring to Regan's consistently upbeat outlook on the economy and federal budget deficits of record size. "I think that's his nature . . . . That's one of the reasons the president likes him."
The change in assignments was another measure of Regan's loyalty. Senate Majority Leader Robert J. Dole (R-Kan.) noted that the switch was Regan's idea, one that solved a large problem for the president by accommodating Baker's wish to move from the White House to the Treasury Department. An outsider when he arrived in Washington four years ago, Regan now "has the complete confidence of the president," Dole said.
Regan earned that confidence with interest last year, when he sparred repeatedly with Volcker, Feldstein and the financial and economic communities over the risks posed by the administration's record budget deficit.
When Volcker and Feldstein were warning a year ago that the deficits threatened the stability of the economy, Regan disputed them.
Asked about Feldstein's 1984 economic report to the president, Regan said, "as far as I'm concerned, you can throw it away." Regan refused to accept complaints by industrialists that an overvalued dollar was helping fuel an invasion of imports. The price of the dollar was a tribute to the "remarkable performance of the American economy," Regan said.
More recently, he called Volcker's administration of monetary policy "a little penurious" and "remarkably tight."
Regan's unbudging optimism about the deficit and the recovery helped buttress the president's opposition to a tax cut, a key issue in the 1984 presidential campaign.
But Regan's loyalty burned some bridges to Wall Street, where he had cut a large swath as a nonconforming chairman of Merrill Lynch before coming to Washington.
Sam Nakagama, a Wall Street analyst with Nakagama & Wallace, said he was heartened by the exchange of Baker for Regan.
"Financial markets certainly do believe that deficits matter . . . . All I would say is that Wall Street would welcome a treasury secretary who cares about financing the deficit and takes a strong stand in maintaining public revenues," Nakagama said. Baker's move to the Treasury Department "ought to be a confidence-boosting move," he added.
Many in the financial community were angered by the tax simplication plan Regan drafted at treasury. "It's a disservice to the nation," said Robert E. Linton, chairman of the Wall Street firm, Drexel Burnham Lambert.
Wall Street executives also were frustrated by what they felt was inconsistency on Regan's part on tax and budget issues, a criticism voiced yesterday by Rep. Fernand J. St Germain (D-R.I.), chairman of the House Banking Committee.
"Donald Regan faithfully implemented whatever Reagan administration policy was in vogue at whatever moment . . . . If there were any major differences between the White House, where Baker held sway, and at the treasury, where Regan held sway, they were well masked," St Germain said.
Regan's performance as treasury secretary was both positive and negative, Roger Altman, managing director of Shearson Lehman/American Express, said. But, by the traditional standard that Washington cherishes -- the ability to gain and wield power -- Regan was extremely successful, Altman said. Despite the welter of views from within the administration on economic policy, Regan will leave office as the undisputed chief economic spokesman.
When asked last month whether the Council of Economic Advisers should be abolished, Regan responded, "I think the president should seek his economic advice where he's most comfortable and where he believes he's best served.
"I think he's getting it from me."