Treasury Undersecretary Beryl Sprinkel appears to be the lone candidate for the post of chairman of the Council of Economic Advisers and may be named to that job before the end of the week, administration sources said yesterday.
The selection of Sprinkel, a doctrinaire monetarist who at times has fallen out of favor with Treasury Secretary Donald T. Regan, would solve two problems for the Reagan administration as it revamps its economic policy-making structure.
A vacancy at Sprinkel's post -- undersecretary for international monetary affairs -- would make it easier for White House Chief of Staff James A. Baker III, who has been nominated to take over Regan's job, to fill that position with someone of his choice. It also would fill the CEA chairmanship with an administration loyalist. The CEA post has been vacant since its outspoken chairman, Martin S. Feldstein, left this summer to return to Harvard University.
A White House spokesman yesterday said no decision had been made on the Sprinkel candidacy. Other administration officials said that Sprinkel appeared to be the only candidate and that a decision could be made by Thursday.
Sprinkel could not be reached for comment yesterday.
The CEA recently has come under attack by the Reagan administration, and suggestions were made -- and later rejected -- that the administration planned to abolish it.
Although many presidents have had disagreements with their CEA chairmen, the problem became acute with the public dissension of Feldstein, who broke ranks with administration policy makers by saying that the federal budget deficit was important, that it should be reduced by increasing taxes, and that the budget deficit contributed to high interest rates.
Regan and other administration economists contended that taxes are not necessary to reduce the deficit, that the economy can grow its way out of the deficit, and that there is no empirical link between the deficit and interest rates.
At one point last year, Regan was so angry at Feldstein and the CEA's annual report to the president, which stated that the administration could not grow its way out of the deficit, that he told a congressional panel they could throw away the CEA's report.
Sprinkel, who was executive vice president and chief economist for the Harris Trust & Savings Bank in Chicago before coming to Treasury, is regarded by some economists as somewhat inflexible in the way he applies monetary theory to the real world. He is an ardent opponent of intervention in international exchange markets to affect currency fluctuations, and has tangled with Regan on that issue.
For example, at the end of the Versailles economic summit in 1982, Sprinkel almost prevented Regan from convincing his European colleagues that he could keep an open mind on the value of intervention to stabilize currency relationships.
At another time, Sprinkel and Regan tangled when Sprinkel started to give Federal Reserve Chairman Paul A. Volcker public advice on how to run the Fed and was reined in by Regan.
This fall, Sprinkel was called into service by the administration to serve as a senior economic spokesman, in part because the CEA post was vacant. Sprinkel, along with other administration officials, has been a vocal critic of the Fed's anti-inflationary, tight monetary policies. During a debate in November, Sprinkel made it clear that a second Reagan administration would keep the heat on the Fed to achieve "moderate, stable growth in the money supply."
Sprinkel also has stayed in line with the administration stand against tax increases, which he said would be "an antigrowth, anti-opportunity policy."