Known for his pragmatism rather than ideology as chief of staff during Reagan's first term, Baker commended the President for getting things done by compromise. But he also praised Reagan's fierce conservative ideology which made it difficult for Baker to logroll policy through Congress in the President's first administration.

Reagan is able "go on to bigger issues and not swing with each and every political wind," Baker said.

In addition, Reagan's determination to "shrink the size of the federal government" has led him to cut programs and attempt to eliminate "fraud, waste, and abuse," Baker said.

"I don't believe we've eliminated socially necessary programs," Baker said.

Baker said that the "White House is going to go full board" for passage of the current Senate tax reform bill, which Baker helped guide through Congress.

Baker called the recent gathering of powers in Tokyo "the best summit we ever had." But when asked how far he was willing to let the dollar drop, Baker refused comment on the grounds that his words would affect the market.

"The minute I do comment, I see things happening in the foreign exchange," he said.