Regan, Donald Thomas
Regan, Donald Thomas
(b. 21 December 1918 in Cambridge, Massachusetts; d. 10 June 2003 in Williamsburg, Virginia), secretary of the treasury during President Ronald W. Reagan’s first term who engineered the passage of the Economic Recovery Tax Act of 1981; he was forced to resign as chief of staff during Reagan’s second term because of the Iran-Contra Affair and a falling out with First Lady Nancy Reagan.
Regan was the second of three children born to William Francis Regan, a police officer, and Kathleen (Ahearn) Regan, a homemaker. Regan’s younger sister had diabetes as a child, eventually losing her sight, and his older brother died unexpectedly in March 1929 at the age of twelve from peritonitis developed after an emergency appendectomy. The death devastated Regan’s father.
At the time of Regan’s birth, the family lived in an apartment in working-class South Boston. “In our neighborhood,” Regan wrote in his memoirs, “Everybody had food on the table, but nobody had any money to spare.” Regan’s father was a police officer in the Boston Metropolitan District Police Force but was fired by Governor Calvin Coolidge during the police strike of September 1919. Regan’s father eventually became a police officer with the New York, New Haven, and Hartford Railroad, rising to the rank of lieutenant.
In the early 1930s the family was living in Cambridge, where Regan graduated first in his class from Saint Mary’s Grammar School. He attended Cambridge Latin School, a public high school that prepared students for college. He was an outstanding student, passing the entrance exam to Harvard University and winning a scholarship. He entered Harvard in 1936 as a commuter student and graduated in 1940 with a BA in English. Regan and John F. Kennedy were classmates and were passing acquaintances. That same year Regan voted in his first presidential election. “I cast my first vote for Wendell Wilkie,” Regan wrote. He added that he had become a Republican because he agreed with the party’s stance on economic issues. “Roosevelt had too little faith in the natural energy and resiliency of the marketplace.... He trusted the people too little and bureaucrats... too much.”
After earning his bachelor’s degree, Regan, who dreamed of becoming a lawyer, enrolled in Harvard Law School as a scholarship student in September 1940. One month later, as America’s entry into World War II appeared imminent, he enlisted in the U.S. Marine Corps as a member of the Officer Candidates School. He spent thirty-three months in the Pacific Theater of Operations, achieving the rank of major. He retired from the marines as a reserve lieutenant colonel in 1946. He was at a crossroads in his life. He wanted to return to law school but was now a family man. He had married Ann Gordon Buchanan of Washington, D.C., on 11 July 1942, and the couple already had the first of their four children. Regan decided to use his GI Bill benefits to buy a house and accepted an entry-level broker’s position with what would become Merrill Lynch.
A fast learner, Regan was a natural stockbroker, and his advancement was meteoric. Carefully groomed by management, Regan moved from one job to another until he experienced virtually every aspect of the securities business. In 1954, at the age of thirty-five, he became the youngest partner in the history of the company. Ten years later he was elected executive vice president, and in 1968 he became president of the firm, the youngest person to hold that title. In January 1971, the same year that the company went public, he advanced to chairman and chief executive officer. For the next decade Regan guided the diversification of Merrill Lynch, making it not only the number one retail broker in the country but also first in mutual funds, commodity trading, municipal bonds, and investment banking. The company was also a leader in international finance, money market funds, economic consulting, mortgage insurance, and precious metals. All this experience made Regan a natural choice for the sixty-sixth secretary of the treasury; President-elect Ronald W. Reagan nominated him for the post on 11 December 1980.
As Regan saw it, his first and foremost task as the new secretary of the treasury was to implement the supply-side economics that the candidate Reagan had promised to enact if elected. Skeptical of the efficacy of supply-side policies to create the employment gains and economic growth the new president wanted, Regan initially deferred to David Stockman, director of the Office of Management and Budget, as the spokesperson for the package of tax cuts and budget reallocations that supply-siders said would revitalize a flagging economy. Eventually Regan got past the George Bush characterization of supply-side economics as “voodoo economics,” a pejorative reflecting Bush’s skepticism that a tax cut alone could propel robust economic expansion. Once he understood the supply-side philosophy, Regan embraced it with a passion. “The more I examine supply-side economics, the more I find I’ve always been on this side,” he commented. “I thought it was just old fashioned conservatism.” Regan became an outspoken advocate of supply-side economics, especially its legislative centerpiece, the Economic Recovery Tax Act. One of the largest-ever cuts in taxes on income and capital gains, the act became law in 1981; President Reagan offered particularly high praise for the lobbying efforts of “a very fine salesman named Don Regan.”
For four years Regan did a masterful job running the Treasury Department. With its more than 100,000 full-time employees and multibillion-dollar budget, the department was very much like the corporation he had headed for a decade. His direct, no-nonsense demeanor—some would say gruff and demanding—was a real asset in managing an organization with such diverse agencies as the Internal Revenue Service; the Bureau of Engraving and Printing, which makes paper currency; the U.S. Mint, which produces coins; Financial Management Services (government accounting); the Bureau of Public Debt; the Bureau of Alcohol, Tobacco, and Firearms; the Office of Comptroller of the Currency (bank regulation); and at the time the Secret Service. A star as the head of the Treasury, where he was simply called “the Chief,” Regan unexpectedly switched jobs with White House chief of staff James Baker on 8 January 1985.
The shake-up in the government caught the Washington establishment so off guard that it was the lead story in the 21 June 1985 issue of Time magazine, which featured a picture of Regan on the cover. Many factors precipitated the double shift that sent Baker to the Treasury and Regan to the White House; the most important of these was the growing rapport between President Reagan and his new chief of staff. Already a trusted adviser, Regan quickly became one of the most influential White House chiefs of staff, determining much of what the president heard and saw day to day. Regan became a buffer between Reagan and the rest of the world. Regan, who was quite good as the corporate leader of a huge public agency, seemed to lack the experience, skills, and disposition to manage a staff office in a democratic government. As James M. Kouzes wrote in the New York Times, Regan and his staff failed “to remember that the President of the U.S. is responsible to numerous and often competing constituencies.... Elected officials and their staffs are not masters of the people; they are servants.”
Of all those alienated by Regan’s gatekeeper approach to the president, no one was more put off than First Lady Nancy Reagan. She considered herself the president’s number one adviser and was not about to step aside for Regan. The festering conflict between Regan and Nancy Reagan came to a head during the Iran-Contra Affair.
The Iran-Contra Affair unfolded in 1986, when the nation learned that some administrative officials had illegally sold arms to Iran to try to win the freedom of American hostages and then had used some of the proceeds to finance the Contras, a rebel force in Nicaragua that was trying to oust the Marxist government of Daniel Ortega. While a presidential board headed by John Tower, former Republican senator from Texas, found that President Reagan had no direct involvement in the scandal, the same board was critical of Regan for the chaos that descended on the White House. “He, as much as anyone,” the board concluded, “should have insisted that an orderly process be served.” Regan’s inability to contain the continuing political damage being done to the president was ultimately his undoing. He was essentially fired as chief of staff in February 1987 in as much as his successor—Howard H. Baker, Jr., former Republican senator from Tennessee—was named before Regan officially submitted his resignation.
Regan left Washington a bitter man. Convinced that Nancy Reagan and not Iran-Contra had done him in, he got even in his memoirs, For the Record (1988). In the book’s foreword, Regan promises to reveal “what was probably the most closely guarded secret of the Reagan White House.” He delivers on the very first page of the book, noting that “every major move... the Reagans made... was cleared in advance with a woman in San Francisco who drew up horoscopes to make certain that the planets were in a favorable alignment for the enterprise.” For Regan, the former marine and bona fide war hero who had fought in five major Pacific battles, including Guadalcanal and Okinawa, Nancy Reagan’s practice of consulting with the astrologer Joan Quigley was downright bizarre if not absolutely scary. For The Record became a best-seller, propelled by a revelation that overshadowed the rest of the book, which is a vivid and candid chronicle of the inner workings of the Reagan presidency.
Nancy Reagan responded in kind, writing in her 1989 book My Turn: The Memoirs of Nancy Reagan that Regan “often acted as if he were the president,” once threatening to dismiss the president’s personal secretary, and that no one wanted to work with him because he was “explosive and difficult to deal with.” Even Quigley got in on the act, obliquely taking credit for the end of the cold war in her 1990 book What Does Joan Say?
When the war of words subsided, Regan retired quietly to Virginia. He often spent ten hours a day in his art studio painting landscapes, some of which sold for thousands of dollars and are in the permanent collections of several museums, including the Butler Institute of American Art in Youngstown, Ohio. Regan died of cancer at the age of eighty-four. He is buried in Restland Memorial Park in Dallas.
Regan authored numerous articles and two books: A View from the Street (1972) and For the Record: From Wall Street to Washington (1988). For a detailed biography of his life through 1981, see “Regan, Donald T.” in Current Biography (Nov. 1981). Regan’s departure from government is discussed in James Kouzes, “Behind Donald Regan’s Downfall,” New York Times (8 Mar. 1987). Obituaries are in the New York Times and Washington Post (both 11 June 2003).