Senate Panel Backs Baker Unanimously

The Senate Finance Committee Wednesday unanimously approved the nomination of White House Chief of Staff James A. Baker III to be secretary of the Treasury, clearing the way for Baker’s confirmation by the full Senate next week.

In a 2 1/2-hour confirmation hearing, Baker told the panel that President Reagan wants his tax simplification proposal to be acted on this year. But he said that the Treasury Department report on the plan, prepared last year under Secretary Donald T. Regan, who is swapping jobs with Baker, is “simply a starting point” for an Administration tax plan that will not be completed for several months.

Cautions on Changes

Baker did not back away from any specific feature of the Treasury’s tax proposal, which calls for lower tax rates along with the elimination of dozens of personal and business tax deductions--but he cautioned that he would not hesitate to make changes in the plan to avoid any “detrimental effect on savings, investment and capital formation.”

Baker, the only witness, encountered overwhelmingly friendly questioning from the 17 senators who attended the hearing. But nearly all of them criticized different aspects of the Treasury tax proposal that they claimed would harm certain industries, states and charitable organizations.

Sen. Bob Packwood (R-Ore.), chairman of the Finance Committee, told reporters after the hearing that the White House is having “some second thoughts about some provisions” of the Treasury proposal.

Packwood, whose committee has jurisdiction over all tax legislation in the Senate, reiterated his objections to the Treasury’s suggestion that fringe benefits, such as employee-paid health insurance, should be taxed if they exceed certain amounts.

In response to questions, Baker said that Reagan would give “equal priority” on “separate tracks” to the tax revision proposal and to spending cuts aimed at reducing next year’s deficit by about $50 billion.

“It will not be unlike 1981, when we had a major budget initiative and a major tax initiative,” he said.

He added that Reagan would insist that tax revision not be used to mask a tax increase and would object to any effort to include tax proposals as part of the deficit reduction package.

Senate Majority Leader Robert J. Dole (R-Kan.) said that he would not rush Baker’s confirmation through the Senate this week because some senators want time to read the transcript of Wednesday’s hearing before voting on the move.

The other half of the Administration job switch, Regan’s appointment as White House chief of staff, does not require approval by the Senate but is being delayed pending action on Baker’s nomination.

Baker, 54, joined the White House in 1981, at the beginning of Reagan’s first term, after running the political campaigns of two of Reagan’s Republican rivals--Gerald R. Ford in 1976 and George Bush in 1980. He was instrumental in maneuvering Reagan’s program through Congress, but aroused the ire of some right-wing conservatives for his pragmatic influence on White House policies.

A wealthy lawyer from Houston, Baker became a Republican in 1970 to help Bush, currently vice president, in his unsuccessful bid to win a Senate seat in Texas.