Packwood Retracts Threat to Kill Tax Reform Plan

Senate Finance Committee Chairman Bob Packwood (R-Ore.) on Thursday retracted a promise to try to kill President Reagan’s tax reform bill unless it preserves special benefits for the timber industry, an essential part of his state’s economy.

Only 24 hours after repeating a pledge that he would work against the entire bill unless timber were protected, Packwood issued a statement saying: “I will continue to oppose the provisions to change the tax treatment for the timber industry but will not oppose the bill in its entirety on the basis of those provisions alone.”

Packwood, known as a reluctant supporter of tax reform at best, changed his stand after what was termed a “candid” conversation Thursday with Treasury Secretary James A. Baker III, who telephoned him Wednesday, an aide to the senator said. “He (Baker) was not pleased,” the aide said.

Admits ‘Overstatement’

Packwood, who faces reelection next year, said in his new statement that he was guilty of “overstatement” in his threats to kill the proposal, which must come through his panel before reaching the Senate floor.

“During early conversations with Jim Baker, I stated in very strong terms my concerns for the timber industry and my inability to support provisions of the tax reform proposal that would single out the timber industry for special, adverse treatment,” he said.

“During those conversations, however, I did not at any time tell Mr. Baker I would kill the entire tax reform bill if the timber provisions made it to the floor. That was an overstatement on my part,” he added.

Meanwhile, Deputy Treasury Secretary Richard G. Darman said Reagan’s tax plan, made public in May, “is moving along a bit better than one might reasonably have expected.”

It is reasonable to expect Congress to pass a tax-overhaul bill this year, Darman told a seminar sponsored by Women in Government Relations and the Administrative Assistants Assn. of the House of Representatives. But even if action is not completed this year, he said, movement toward a better tax system will not stop.