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Cutting taxes in the era of cutting government programs doesn't make sense, Democrats in the Senate Finance Committee were set to protest yesterday. The panel took up the GOP's planned $245 billion tax cut over seven years. The bill would give a $500-per-child credit, increase the income limit for tax-deductible IRAs, and lower the capital gains tax. Overall, the Senate plan would cut $110 billion less in taxes than the House version.

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In a deal to keep the US from defaulting on its debt, the White House quickly accepted Speaker Gingrich's offer yesterday to raise the federal debt limit until Congress and the White House agree on a budget.

Seeking to build "a bridge across the racial divide" six members of Congress and others, including the Rev. Jesse Jackson, are urging President Clinton to form a commission on race relations. It would develop plans for improving relations and bettering black communities. Clinton has called Monday's Million Man March "a beautiful and awesome thing," but by yesterday he had not responded to the request.

The US trade deficit dropped a dramatic 21 percent between uly and August to $8.82 billion, the Commerce Department said yesterday. Exports hit an all-time high, with aircraft, computers, and computer chips in big demand overseas. Despite the drop, the annual deficit is expected to be about $123 billion, far above last year's $106 billion.

Members of Congress exhorted Clinton to get their approval before sending 20,000 heavily armed US troops and 2,000 to 3,000 reservists to Bosnia if peace is established there. Under Clinton's plan they would come home after 12 months. Clinton hasn't said he won't seek congressional approval, but administration officials have repeatedly invoked former President Bush's determination to send troops to the Gulf in 1990 despite congressional opposition.

All federal agents will now be able to pull their triggers only when they have a "reasonable" belief of imminent danger. Facing criticism over the FBI's "shoot on sight" orders in the incident at Ruby Ridge, Idaho, Attorney General Reno yesterday replaced the shooting rules of all federal law-enforcement agencies with the new, stricter standard.

In a bid to create the nation's seventh-largest bank, San Francisco-based Wells Fargo & Co. launched a $10.2 billion hostile takeover of Los Angeles-based First Interstate Bancorp. Mergers allow banks to reap profits in part by shutting down their duplicate branches.

Cutting $270 billion in Medicare - the House's biggest chunk of the budget-balancing plan - was to be put to a vote today. Speaker Gingrich met yesterday with rank-and-file members, aiming to placate their concerns. Although the Medicare bill is expected to pass, Gingrich is trying to head off widespread defections in the final series of budget-cutting votes next week.

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All 4,040 midshipmen at the US Naval Academy were given urine tests Sunday and Monday after two students were caught with LSD. The two were confined to the grounds Sunday. They may be court-martialed or expelled.

Senate Republicans were trying a third time yesterday to pass a bill that would deter foreign investment in Cuba, after two narrow defeats. On the second vote they missed by one vote the 60 needed to end debate.

Advertising is the most important influence in teenage smoking, a new survey said. About 84 percent of 3500 nonsmoking adolescents felt ads promote the benefits of smoking; 76 percent felt ads depict the habit as enjoyable. The study appeared in The Journal of the National Cancer Institute.

A judge told Orange County to establish better legal grounds in the $2 billion law suit against Merrill Lynch & Co. Tuesday. A new suit is expected to be filed next week. The county contends that illegal transactions by Merrill Lynch resulted in its bankruptcy.


International negotiators met Serbian and Bosnian leaders yesterday as the pace of the peace process quickened. The negotiators were laying the groundwork for talks bringing together the Bosnian government, their Croat allies, and separatist Serbs in the US on Oct. 31. Earlier, despite the week-old cease-fire, Croatian officials said they were "prepared for any option" as they continued to try to retake land along their border with Serbia.

The Armed Islamic Group (GIA), an Algerian organization that has claimed responsibility for a wave of bombings in France, sent Paris a four-point ultimatum to sever its ties with Algeria's military rulers, an Arabic newspaper reported yesterday. The paper published the group's demands a day after a bomb blamed on Muslim extremists tore apart a rush-hour train in Paris, injuring 29 people. More bomb scares snarled commuter rails yesterday.

Facing strong opposition from the US, Libya said it no longer wants a seat on the United Nations Security Council next month. Libya was next in line to replace Oman in the rotating Arab seat pending a vote by the General Assembly Nov. 8. It would have taken its seat in January. The US lobbied against Libya's membership because Tripoli remains under international sanctions.

Hard-line supporters of British rule in Northern Ireland accused London yesterday of softening its demand that guerrillas disarm to win a seat at new all-party peace talks. Britain denied backing away from its insistence on a handover of IRA weapons but said an international advisory commission on the issue might help break the deadlock in the peace process.

In his first meeting with a senior US official since a row over Taiwan in June, China's president said yesterday that Washington should learn from the dispute and not allow Taiwan's leader to visit again. Just six days before he meets President Clinton in New York, Jiang Zemin set the combative tone in a meeting with visiting US Commerce Secretary Ron Brown. Brown said Sino-US ties were a top Clinton priority.

Leaders of the 21-month-old uprising in southern Mexico and government representatives gathered in two towns yesterday for what are expected to be the most substantive talks yet on ending the insurgency. The Zapatista Liberation Army is seeking improved economic conditions and an end to discrimination. Young girls covered their faces during a meeting of the Zapatista leadership on Monday.

A police officer was killed and three other people were wounded when a bomb exploded in their car outside a major Moscow airport yesterday. Meanwhile, the president of a Russian commercial bank was shot and critically wounded. The incidents are the latest in a series of attempted contract killings, investigators said.

Helicopters prowled the skies and dogs sniffed through fields near the North Korean border yesterday seeking hostile agents who may have slipped into South Korea. South Korean guards killed an armed North Korean Tuesday in a river separating the two countries. They launched a massive hunt for other North Koreans who may have successfully infiltrated the border.

Sri Lankan forces launched air and artillery strikes against Tamil rebels yesterday, the second day of a major push to crush the guerrillas in their northern stronghold. Rebels have unsuccessfully tried to stall the offensive by cutting sea supply routes.

At a summit that opened yesterday in Colombia, 113 member nations of the Non-Aligned Movement tackled the issues of poverty, terrorism, nuclear weapons, and reform of the UN. A declaration is to be presented at the end of the summit tomorrow.


We don't want Sarajevo to look like Berlin during the cold war, but that is exactly what [Serb leader Radovan] Karadzic wants ... a Berlin Wall in Sarajevo."

- US negotiator Richard Holbrooke, on Bosnia peace talks.

After recovering pieces of the 2,200-year-old Pharos lighthouse and enough ancient statues and relics to fill a small museum, archaeologists ended a diving expedition Tuesday in the waters off Alexandria, Egypt. Now starts a six-month desalination process before the Greco-Roman and Egyptian pieces can be studied.

A Swiss scientist, Hans Herren, is the winner of this year's World Food Prize. He is credited with stopping a crop-destroying pest in sub-Saharan Africa. The prize has been sponsored since 1990 by a foundation set up by Iowa businessman John Raun. Herren received the $200,000 award yesterday in Des Moines.

The Royal Dragon in Bangkok, the world's largest restaurant, is the size of eight football fields, and 541 waiters rollerskate to fetch customers food from a distant kitchen, in which 322 chefs prepare meals.

China plans to spend $30 million to restore 24 major relics, including the tombs of 13 Ming dynasty (1368-1644) emperors in Beijing's suburbs, the Xinhua news agency said yesterday.

A clown who feeds parking meters in Santa Cruz, Calif., may not have to pay a fine after all. City Manager Richard Wilson has asked the court to dismiss a $13 fine against Cory McDonald, who dresses as a clown. A city law forbids the feeding of other people's parking meters.

Top Grossing Films, Oct. 13-15

1. "Seven," $8.6 million

2. "Assassins," $5.9 million

3. "Dead Presidents," $4.5 million

4. "How to Make an American Quilt," $4.4 million

5. "Jade," $4.3 million

6. "The Scarlet Letter," $4.1 million

7. "To Die For," $4 million

8. "Strange Days," $3.7 million

9. "Big Green," $2.7 million

10. "Devil in a Blue Dress," $2 million

- Exhibitor Relations/AP

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