Iran furor strengthens Shultz's hand. But he will stay only if credibility as US foreign policy spokesman is assured

For George Shultz, the next move will be up ... or out. State Department and private analysts say that if Mr. Shultz chooses to stay on as secretary of state following disclosures of a controversial arms-for-hostages deal with Iran, it will be with the understanding that the State Department will not be dealt out of major foreign-policy decisions in the future.

The alternative could be resignation for Shultz, who has served as secretary of state since 1982.

As Shultz contemplates his future in the midst of the worst foreign-policy crisis of the Reagan administration, analysts provide this assessment of his position:

In terms of his standing within the administration, they say, he has emerged a stronger figure. His misgivings about the Iran project have been vindicated. Serious doubts have been cast on the judgment of his rivals - and in particular, national-security adviser John Poindexter - in the policymaking realms of the Reagan administration.

``In terms of judgment, I think Shultz came out of this looking pretty good,'' says one official at the State Department.

Thus, if Shultz chooses to stay he could begin the final two years of the Reagan presidency with expanded authority over the policymaking apparatus.

Balanced against these domestic gains are diplomatic considerations that could yet persuade Shultz to resign.

The administration's policies on terrorism and US neutrality in the Iran-Iraq war, both closely identified with the State Department, have been left in shambles as a result of the arms transfers. Moreover, Shultz's authority as a spokesman for US policy has now been called into question in the eyes of many foreign leaders and diplomats.

``The role of the secretary of state is to be able to state with authority what US policy is,'' says Charles William Maynes, editor of Foreign Policy magazine. ``Shultz is no longer in that position.''

If Shultz should choose to resign, State Department sources say, he would probably wait until after the first of the year to minimize embarrassment to the President.

But by underscoring divisions within the Reagan administration, a Shultz resignation now would be politically damaging to Ronald Reagan as he begins the final leg of his presidency.

Partly in an effort to forestall the Shultz resignation, the President said Monday that no future arms sales to Iran are planned.

Questions about Shultz's future have been raised in the wake of news that the Reagan administration agreed to provide arms to Iran partly in return for Iran's help in securing the release of American hostages held by a Lebanese group with close ties to Iran.

The Iran operation was managed by the White House and the National Security Council, apparently over the objections of Shultz. The secretary was privy only to - in his words - ``sporadic'' information about its day-to-day application.

Last weekend Shultz took the highly unusual step of publicly distancing himself from the policy.

In what was widely taken as a blunt message to the White House, Shultz said on the CBS ``Face the Nation'' program Sunday that future arms shipments to Iran would ``certainly [be] against our policy'' of not negotiating with terrorists and of maintaining strict neutrality in the six-year war between Iran and Iraq.

Shultz also seemed to take exception to the President's assertion in a televised address last week that since the start of secret US-Iran talks 18 months ago, terrorist acts against the US have stopped. The secretary said that Iran may have been involved in the recent kidnapping of three more Americans in Lebanon.

Shultz's public statements were apparently behind President Reagan's decision Monday to forswear future arms shipments to Iran.

The President's statement may also have reflected a sober recognition by the President's White House advisers that a Shultz resignation could have damaging political repercussions.

``The President is under siege right now,'' Mr. Maynes says. ``If Shultz were to resign, it would be taken as confirmation of criticism about the disarray and amateurishness of foreign policy run out of the White House.''

This is not the first time Shultz has been on the losing side of an internal Reagan administration policy debate. Disagreements in the past have surfaced over arms control policy, Central America, and, most recently, a secret White House disinformation plan directed at Libyan leader Muammar Qaddafi.

Moreover, Shultz has presided over a foreign policy that has few accomplishments to its credit.

Congress has repudiated the administration's quiet diplomacy toward South Africa in favor of economic sanctions. The administration's support of the Nicaraguan contras has gained little public favor, despite grudging congressional support. And even after two superpower summits, a chill remains in US-Soviet relations, with no arms accord in sight.

``[The US's] nonexistent credibility has been damaged to the point that even the memory of your credibility has vanished,'' says one Jordanian official of the administration's standing in the Middle East in the aftermath of the Iran disclosures.

But thanks to his quiet persistence, combined with bureaucratic skills acquired through years of government service, Shultz's personal standing has remained largely intact. Despite his disagreement with the recent Iran initiative - now, perhaps, because of it - Shultz is said to enjoy the full confidence of President Reagan.

The loss of Shultz - widely regarded as the most moderate and experienced member of Reagan's foreign-policy team - would be a major setback to the administration as it seeks to regain credibility.

One knowledgeable congressional source adds that someone with Shultz's credentials will be needed more than ever next year as the administration seeks to establish smooth working arrangements with the Democratic-controlled Senate and House.

``The only cohesive force in Reagan foreign policy has been George Shultz,'' a Republican Senate aide says.

He adds: ``The administration has succeeded when Shultz has taken an active role; it has failed when he has been frozen out. It would be disastrous if he resigned.''

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