Regan Hangs In but Grip on Job Is Seen as Shaky

WASHINGTON — It was the sort of story a departing White House aide could tell on his last day at work, and Larry Speakes, quitting last month as President Reagan’s spokesman, took aim at Chief of Staff Donald T. Regan.

As Speakes recalled it, someone had suggested that Regan should run for President. But, Regan retorted: “Why step down?”

The story, rooted in the days before the Iran- contra scandal cast its pall over the White House, reflected the almost imperial aura the chief of staff used to project. But Speakes’ story now only underscores how drastically Regan’s fortunes have fallen.

Today, the issue is not whether Regan should reach for higher office but whether--by retaining the one he occupies--he is aggravating the paralysis of the Iran scandal and reducing the President’s chances of recovery.

Reagan, while saying Wednesday that “nobody’s getting fired,” gave his embattled chief of staff a less-than-stirring endorsement. “This is up to him. I have always said that, when the people that I have asked to come into government feel that they have to return to private life, that’s their business and I will never try to talk them out of it,” the President told reporters during a brief picture-taking session with visiting Israeli Prime Minister Yitzhak Shamir.

Regan, asked later about his future at the White House, pointed to Reagan standing nearby and said: “It’s up to him.” Moments later, asked again whether he was departing, Regan replied: “No.”

Sources have said that Regan holds a firm commitment from the President that he can stay as long as he likes, and White House officials asserted that Reagan’s remark was not intended as a slap at the chief of staff. But the consensus emerging among a number of current and former White House advisers is that Regan, having fended off efforts to force him out of his job two months ago, is still in a shaky position and may have to leave.

‘Too Late to Recover’

One Washington political figure, who has made known his strong opposition to Regan, said that the chief of staff’s hold on his job presents the White House with “calamity and disaster, and it’s too late to recover from it.”

“The President doesn’t get any benefit even if he fires him. There was a time up until the first of the year that he could remove him and get credit for it. The damage is done (and) he’s lost his ability to get a first-rate person in there,” this source said, speaking on condition that he not be identified.

Nevertheless, Regan’s critics outside and inside the Administration have been quietly hopeful in recent weeks that, if the tension and disruption created by the Iran arms scandal dies down, the chief of staff may find an opportunity to relinquish his office gracefully.

And, they say, regardless of Regan’s decision, the coming weeks, and perhaps months, are likely to be a period of confusion and little progress in the White House until a new chief of staff is named or until Regan can reassert himself.

‘Isn’t Doing the Job’

“As long as he’s there, what we’re going to see is a disorganized White House,” predicted a Republican who has served as an adviser to several administrations and Republican candidates. “The White House isn’t functioning. Regan is so distracted that he isn’t doing the job. I don’t think there is an Administration agenda. Don Regan couldn’t carry it through.”

Indeed, although two major Administration programs have been announced in the new year, they have produced little sign of forward motion and assertiveness within the White House:

The “competitiveness” program discussed in a presidential speech Tuesday contained no more details than it did nearly a month ago, when Reagan featured it in his State of the Union address as a major effort to improve the U.S. economic, scientific and educational position in the world.

Also, the plan for expanded catastrophic illness coverage that the Administration announced this month was markedly comprehensive, apparently in an effort to court Congress, rather than the more limited version the White House was said to be favoring earlier.

‘Strongest Hand’

A senior White House official who has clashed with Regan said that, although the chief of staff remains “the person with by far the strongest hand,” the Administration’s position and Regan’s own are clearly weakened.

He said that, in the President’s meetings with members of Congress and with the Cabinet, “the pattern is unmistakable.”

“They’ve been livelier, more candid,” than in the days when Regan exercised greater control, and Republican congressional leaders have been more willing to speak out, the official said.

Another source said that Regan, lacking credibility among the government departments as a result of his uncertain status, has been less able to direct policy decisions or mediate the disputes of conflicting power centers, such as those of Defense Secretary Caspar W. Weinberger and Secretary of State George P. Shultz.

Earlier this week, First Lady Nancy Reagan, who two months ago was among those pressing for Regan’s ouster, was reported by the Washington Post to no longer be speaking to the chief of staff. However, that allegation was denied by Administration officials, who said Regan and Mrs. Reagan spoke nearly every day.

Tainted by Iran Deal

Regan’s problems persist even though no evidence made public has tied the chief of staff to the most damaging aspect of the Iran scandal--the diversion to Nicaragua’s rebels of profits from the Administration’s secret arms sales to Iran. The taint is there because some members of the White House staff--a staff overseen by a man with a reputation as the most powerful chief of staff in 30 years--were deeply involved in the arms shipments and the funds diversion.

The degree to which Regan’s independent control has slipped is illustrated by his willingness recently to offer a senior White House position to longtime Reagan political adviser Stuart Spencer, one of those who was reported to have aggressively sought Regan’s removal. The offer was rejected.

Regan has been seeking to fill the proliferating vacancies on the White House staff. A senior official said the White House is about to announce that Frank J. Donatelli, who ran Reagan’s Midwestern campaign in 1980, would become the President’s assistant for political affairs, and that John Koehler, a consultant to the U.S. Information Agency and a former Associated Press executive, would become the director of communications.

President Adamant

In his support for Regan, the President has been as adamant about keeping his chief of staff as Regan has been about holding on to the job.

Marlin Fitzwater, the White House spokesman, said Reagan’s comment Wednesday “doesn’t change things one iota. The President says it’s up to Regan, and Regan says, ‘I’m not leaving.’ ”

And there is a recognition that the chief of staff, a former chairman of Merrill Lynch & Co. and a veteran of World War II combat, is remarkably resilient. “When your first career was being shot at as a Marine, you take the longer view,” one senior White House aide said. But others expect that Regan’s embattled condition will eventually lead to his departure.

“With Don Regan over there, nobody can do anything,” a former White House official said.