The Supreme Court ruled the government can be held liable for a 1989 rule change that plunged savings-and-loans into financial trouble. The court also left intact a ruling that threatens all affirmative-action programs at state-run colleges in three southern states.
President Clinton defended Defense Secretary William Perry after Senate Intelligence Committee chairman Arlen Specter of Pennsylvania publicly questioned whether Perry was suitable for the post. He raised the question in the wake of the terrorist attack in Saudi Arabia that killed 19 Americans. Meanwhile, White House aide George Stephanopoulos accused Republicans of a "smear campaign" in connection with a new book of sensational allegations by Gary Aldrich. The former FBI agent wrote "Unlimited Access, an FBI Agent Inside the Clinton White House," after processing background checks at the White House for five years. He admitted some of his information came from second- and third-hand sources, some of whom have publicly disputed his account.
Medicare beneficiaries are paying more for outpatient services at hospitals, and the bills are expected to go up, The New York Times reported. In recent years, hospitals have been charging more than what Medicare considers reasonable. Beneficiaries make up the difference, sometimes paying 49 percent of outpatient costs, Health and Human Services Secretary Donna Shalala said. That cost could rise to 68 percent by the year 2000.
Economic reports were mixed as the Federal Reserve meets today and tomorrow to consider a change in interest rates. Consumer spending rose 0.8 percent in May, the steepest advance in three months. And manufacturing activity rose to 54.3 percent - the highest since February 1995. But construction spending declined 0.9 percent in May, the first drop in three months.
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