Treasury secretary-designate Henry Paulson hewed firmly to Bush administration positions at his Senate confirmation hearing yesterday, saying he "very strongly" opposes tax increases, hopes to begin tackling the long-term obligations of Social Security and Medicare, and wants China to move more quickly toward changing its currency policy.

Appearing before the Senate Finance Committee, Paulson repeatedly praised President Bush's tax cuts and rebuffed suggestions by committee members that tax increases ought to be included in a package of measures to shrink the federal budget deficit.

"Would I like spending to be less? Yes. Would I like the deficit to be less? Yes," said Paulson, who has been chairman and chief executive of Goldman Sachs Group since 1999. "But it's manageable . . . and we can attack it best with a strong and growing economy." Raising taxes, he said, "would be counterproductive" by hurting growth.

Again echoing long-standing views expressed by Bush and other administration officials, Paulson said the nation should put a high priority on reducing the costs of Social Security and Medicare as the baby-boom generation retires. The sooner the retirement and health care issues are tackled, "the less costly will be the ultimate solution," he said.

But he tacitly acknowledged that, with the administration in its sixth year, political constraints will limit how much he can accomplish.

"It would be naive to think all these things can be solved in a 2½-year period," he said.

Those and other comments indicated that Paulson will continue the approach of the outgoing Treasury secretary, John Snow, in faithfully backing the president's policies. Snow suffered from being widely perceived as a cheerleader for the White House, and the appointment of a Wall Street titan was aimed at giving luster to a post that has declined in influence during Bush's presidency.

Paulson was asked deferential questions by senators who lauded his grasp of financial issues, but he skirted several controversial issues by pleading ignorance on technical and legal matters.

When a couple of Democratic senators raised privacy concerns about a recently disclosed program run by the Treasury Department that monitors a large international financial database to track down terrorists, Paulson said he has to "make sure I understand the law thoroughly"before stating an opinion.

At the end of the hearing, Finance Committee Chairman Sen. Charles Grassley, a Republican from Iowa, said he hoped that Paulson's nomination could sail through the Senate before the July 4 recess.

when Snow has said he plans to leave office. "Our goal is to report the nomination as quickly as possible," he said.

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By PAUL BLUSTEIN

The Washington Post