Secretary Shultz Takes Charge
After Secretary Haig resigned in late June 1982, citing a recent shift from the "careful course" of the Administration’s foreign policy, Reagan turned to George P. Shultz, who would serve as Secretary of State for 6-1/2 years—the longest tenure since Dean Rusk in the 1960s. An economist by training, Shultz had held three cabinet-level posts during the Nixon Administration and brought to the job of Secretary of State long experience in government and economic diplomacy. Despite his frequent clashes with Secretary of Defense Casper Weinberger over major issues of foreign policy, Shultz forged an effective partnership with President Reagan by the end of the President's first term. Shultz deferred to Reagan on major foreign policy decisions, while Reagan delegated to Shultz the details of diplomacy.
Shultz relied primarily on the Foreign Service to formulate and implement the Reagan’s foreign policy. However, he believed that the Deputy Secretary of State should be a political appointee, as familiar with senior officials in the White House as with those in the Department. He first selected Kenneth W. Dam, a law professor, to serve as his alter ego; in June 1985, Shultz recruited John C. Whitehead, an investment banker, to fill the post. Many of the principal officers appointed by Haig remained to serve under the new Secretary. Eagleburger, for example, stayed as Under Secretary for Political Affairs until May 1984, when another career appointee, Michael H. Armacost, replaced him. By the summer of 1985, Shultz had personally selected most of the senior officials in the Department, emphasizing professional over political credentials in the process.
In his farewell address to the Department, Shultz commented that the decision to surround himself with Foreign Service officers had been “one of the smartest things I’ve done.” The Foreign Service responded in kind by giving Shultz its “complete support,” making him one of the most popular Secretaries since Dean Acheson.
From 1982 to 1989, Shultz was the driving force behind the Administration’s effort to promote peace between Israel and its neighbors. In response to the escalating violence in the region, Reagan sent a Marine contingent to protect the Palestinian refugee camps and support the Lebanese Government. After a year of sustained diplomatic effort, the October 1983 bombing of the Marine barracks in Beirut killed 241 U.S. servicemen, the most serious foreign policy reversal of Reagan’s first term.
Reagan’s decision to give the National Security Council staff operational responsibility in the Middle East led to the most serious setback of his second term, the Iran-Contra affair, when Administration officials devised a complicated covert plan to raise money for the anti-government “contra” forces in Nicaragua through the sale of missiles to Iran. The resulting controversy allowed the Department of State to resume control of Middle East policy. By December 1987, Shultz had assembled a strong team of professionals when the Intifada, or Palestinian uprising, challenged Israeli authority in the West Bank and Gaza Strip. After six months of shuttle diplomacy, Shultz had established a diplomatic dialogue with the Palestine Liberation Organization in December 1988, laying the groundwork for further negotiations during the next administration.